The cost hospitals put into fighting liability claims, as well as possibly unnecessary testing to preemptively protect doctors from being sued, undercuts the funding that they can use on patient care. The cost of medical liability to the healthcare system is hard to pin down exactly, but it is estimated to be anywhere from $50 billion to over $150 billion annually.

Those may sound like big numbers (because they are), but concerning healthcare spending as a whole, they represent a fairly small percentage of the budget. Liability costs make up the smallest of the four main expenditures of the healthcare system, which are:

• Labor costs
• Tests and technology
• Supplies and capital expenses
• Liability costs

Many studies of the cost of medical malpractice insurance are performed by groups with strong biases. The figures they present are often shaded by their desire to make the numbers fit with the picture that they are trying to paint. This is part of what accounts for the wide discrepancy in the estimated costs.

The Two Sides

The two main sides with a vested interest in the cost of medical liability in the healthcare system are doctors and hospitals vs lawyers and patients. Clearly, no matter which side you are on in the dispute, any system that has patients and doctors pitted against each other is a system that needs fixing.

Doctors and Hospitals

Doctors and hospitals argue that the high cost of liability protection both limits the money they have available for patient care and puts their patients through unnecessary medical testing. The risk that doctors face of being sued at some point in their careers is very high. Nearly half of physicians over the age of 55 have faced a lawsuit at some point in their careers.

The cost hospitals put into fighting liability claims, as well as possibly unnecessary testing to preemptively protect doctors from being sued, undercuts the funding that they can use on patient care.

Doctors argue that to protect themselves from being sued by a patient, they are forced to run extra tests that they don't deem necessary to diagnose a condition just so that they can say they did them should a patient claim negligence. They argue that patients bear the brunt of the cost, as they are left to face a higher bill for tests they don't need.

Hospitals argue that the cost of fighting malpractice lawsuits has a significant impact on their budgets and leaves them with less money for equipment and staff. This hinders their ability to provide their patients with the best medical care possible.

Lawyers and Patients

On the other side, you have lawyers and patients who sue doctors and hospitals when they feel that they have not received the best possible care due to the negligence or incompetence of a physician.

Lawyers and patients argue that the tests that many doctors claim to be unnecessary are, in fact, quite often responsible for preventing misdiagnosis. They believe that hospitals and doctors should be held accountable for any mistakes they might make in the care of their patients. Some of the common causes of medical malpractice cases include:

• Anesthesia mistakes
• Lack of informed consent
• Hospital-acquired infections
• Medication errors
• Surgical errors
• Missed diagnosis
• Birth injuries

Patients who were harmed and families affected by birth injury may speak to a lawyer about claiming compensation. Lawyers say they should. Doctors do not agree.

[ymal]

What’s the Solution?

There is no simple solution to the problem of medical malpractice costs in the healthcare industry. The fact is some doctors are negligent, and some lawyers pursue frivolous lawsuits. As long as the two things occur, there is going to be a problem with unnecessary costs.

Doctors and hospitals tend to argue that the solution is to put a cap on damages from a malpractice lawsuit. Studies have shown that even with a cap, doctors still tend to run extra tests to protect themselves.

A possible partial solution to the problem would be to remove doctors from the legal part of the equation altogether. Patients who feel they are the victim of doctor error can sue the hospital directly and not the doctor. Doctors are at risk only through some form of disciplinary system by the hospital or medical board in which they face suspension of their license and termination of employment should they be determined to be at fault, but not by direct financial loss.

This would potentially reduce doctors performing truly unnecessary testing, as they would not feel the direct impact of a lawsuit and far fewer doctors would be affected by lawsuits overall. However, this is still far from a perfect solution.

Takeda Pharmaceutical Company, Japan’s largest pharmaceuticals firm, announced on Monday that it would sell its Japan-side consumer healthcare business to US private equity company Blackstone Group Limited.

Takeda has been selling its over-the-counter assets in several nations in a bid to refocus its business towards the development of new drugs and reducing the debt it acquired from its $59 billion purchase of Shire Plc in 2019.

During an online briefing, Takeda chief executive Christophe Weber said that the company had decided to sell its Japanese consumer business unit due to the difficulty of continuing to invest in OTC businesses while keeping this new focus.

“My responsibility is to make sure that we don’t destroy value (for OTC businesses) but create value, and to create value we need to grow businesses and it’s not good to keep business and not invest sufficiently into that,” the CEO said.

Takeda stated that the proceeds from the sale of Takeda Consumer Healthcare Company would add 108 billion yen to its net profit, and that it expected the transaction to close by 31 March.

[ymal]

Blackstone outbid competition from Japanese pharmaceutical group Taisho and other private equity companies to acquire TCHC. In a statement, the company said that the purchase would be its second acquisition in Japan after acquiring Ayumi Pharmaceutical Corp in a $1 billion deal in March 2019.

This new purchase will give Blackstone control over TCHC’s Alinamin line of energy drinks and vitamin supplements, and its Benza Block cold medicine.

US retail sales saw a smaller increase than expected during July, and may slow further in the months ahead due to spiralling COVID-19 cases and a reduction in unemployment benefits, the US Commerce Department announced on Friday.

Overall retail sales increased by 1.2% in July, falling behind the 8.2% increase seen in June – which was itself a sharp decrease from an 18.2% increase in May. However, May’s surge, the largest on record, followed two months of equally historical declines owing to the outbreak of the COVID-19 pandemic throughout the US.

July’s sales increase did not meet the 19.9% target that economists polled by Reuters had forecasted for the month.

While retail growth slowed significantly, the overall increase in sales demonstrated that prior months’ figures were not a fluke, and that retail had begun to bounce back.

Michelle Meyer, chief US economist at Bank of America, said that the figures showed “a willingness and a desire to spend” from the American public. “There is no doubt the recovery in consumer spending has been robust,” she said.

However, the recovery in retail sales was aided by a $600 weekly jobless benefits supplement, which around 30 million US citizens have been receiving, and which expired at the end of June. This benefit accounted for 20% of the personal income of those affected, and assisted recipients in buying food and paying bills.

While the supplement has been extended via an executive order by President Trump, the weekly payout has been reduced to $400. The effect that this will have on retail sales in August and beyond remains to be seen.

Completing these notarisation-related tasks can be even more challenging if a corporate finance team has to search for mobile notary services using their own time and resources.

The good news is there’s a solution for the time-consuming nature of properly notarising a document. A mobile notary can ease the process, travel on-site, and verify high-profile documents. That’s super convenient under normal circumstances, but even more critical during times like this when people are working remotely during a pandemic or quarantine.

For those corporate finance teams debating the importance of a mobile notary, here’s an outline of how a mobile notary can serve you and save the day in the face of unexpected time crunches. When you’re ready to find a notary near you, keep these tips in mind to ensure that you partner with a reputable, reliable company that guarantees client satisfaction.

What is a mobile notary?

A mobile notary is a notary public who travels from one location to another to notarise signatures. Not only do mobile notaries adhere to typical business hours, but most of them can also work on weekends and after hours. Because a mobile notary can accommodate any working schedule, their on-site services can save a corporate finance team a significant amount of time and money. No longer are the days of lagging notary services.

While most people view recruiting a mobile notary as a difficult task, the truth is the process is quite simple. Multiple agencies can connect corporate executives to notaries.

How do mobile notary services work?

Typically, mobile notaries work with clients' schedules. Because a mobile notary travels anywhere, you won’t be limited to notaries in your local area. No matter where your locations are based, a mobile notary will come right to your doorstep.

Notary service fees are usually standardised. However, the costs can vary based on your location. A mobile notary can charge additional costs depending on your state of residence.

Because a mobile notary travels anywhere, you won’t be limited to notaries in your local area.

Benefits of using a mobile notary

Using a mobile notary can benefit your financial business in several ways, including the following.

Efficient transactions

When you're working in the finance industry, you know that efficiency is the key to success. Traveling from one location to another can be tedious and time-consuming, especially if you need to travel long distances. Instead of spending your precious time traveling or waiting in traffic, you can hire a mobile notary. Because notarisation is their full-time job, they can quickly travel to your preferred location to notarise your financial documents with ease.

A major incentive of a mobile notary is their flexible schedule. They can notarise your documents at any time of the day, including during regular business hours, after normal business hours, and during weekends.

Flexibility

Many notaries offer flexible scheduling and provide comprehensive notary services with no order restrictions—meaning you have the freedom to choose the kind of services you need and the time you need it. It also ensures that a corporate finance team can access additional assistance during their busy days, and avoid paying for unnecessary services during slower days. Such flexibility makes mobile notary services the best option, as they save you money and keep your business running efficiently. Most importantly, it keeps clients satisfied.

No location limitations

Many mobile notaries travel throughout the country. They will come to any given location: whether you are at home, your place of business, vacation home, office, or any other place you find comfortable. Time restrictions don’t limit these mobile notaries, so these trained professionals can make on-site visits anytime, anywhere, depending on your schedule.

[ymal]

Reasonable costs

The cost of mobile notary services varies greatly depending on state laws. Each state has standardised fees that indicate what professionals can charge for their notary services. Mileage and travel expenses determine the overall cost. Regardless of the additional expenses a mobile notary service charges, the bottom line is that mobile notaries are cost-effective considering the energy and time you save.

Accuracy and efficiency

Mobile notaries are trained professionals who provide accurate and efficient financial services. Besides notarising high-profile documents, these professionals also provide client support and conduct follow-ups. By shaving off time spent worrying about the safety of your documents, you direct this energy towards your day-to-day operations. Without distractions, you’re free to tend to crucial responsibilities and ensure your customers’ needs are addressed.

Final thoughts

Thriving in the corporate finance world requires a commitment to the most minute details— which is why your corporate finance team must choose the right mobile notary for your business.

There are several reputable and reliable mobile notary agencies to choose between. Devote the time necessary to locate the most accredited agencies nearest your location. In your search, consider factors such as qualifications, reliability, credibility, costs, and flexibility to get the most out of your mobile notary services.

Monday was a day of contrasts for the US economy, as stocks continued to bounce back even as the National Bureau of Economic research confirmed that economic growth hit a peak in February and has since been contracting.

As it emerged that the economic downturn began before lockdown measures were put in place in the US, but after China and other countries were severely struck by COVID-19, the Nasdaq was reaching an all-time high at 9,924.75 points, a bounce of 44% up from its March 23 low.

The S&P 500 also saw a gain of 1.2%, finally recouping all of its COVID-induced losses from earlier in the year. At the same time, the Dow Jones Industrial rose by 1.7%.

The markets’ optimism can be traced back to the Burea of Labor Statistics’ surprising announcement on Friday that unemployment in the US fell by 1.3% in May, hinting at a faster economic recovery than expected. Though the accuracy of these figures has since come under dispute, the positive sentiment has remained.

European stocks were not buoyed by America’s enthusiasm, with Tuesday morning seeing Germany’s DAX slide by 1%, accompanied by a dip of 0.6% from Britain’s FTSE 100 and 0.7% by France’s CAC 40.

Lee Wild, head of Equity Strategy, cautioned investors that “the full economic consequences of the pandemic are still to be felt.”

The companies that issue and service the bigger part of mortgages in the US have seen their shares rally a staggering 38% in the past eight weeks, even though people are out of work and are missing payments at a historic pace. With US unemployment spiking to a record of 14.7%, Black Knight reported that about 4.7 million mortgages are in forbearance, representing 8.8% of all home loans. That figure amounts to roughly $1 trillion in unpaid principal.

With all statistics in place, we have to admit that the current state of the market in this sector is definitely not pretty, and these companies still pose a huge risk. But why have they still shot up in value?

The answer to this is not necessarily based around the current situation but comes from the state of the market from two months ago. Put simply, a lot of companies crashed out of proportion, when compared with the market, and are now returning to the mean.

A very important factor that we must consider when valuing mortgage REITs is that almost all of their assets are carried at fair value, while a small portion of loans is carried at cost with a loss provision. Typically in a liquidity crisis, like the one we saw in March, the market value of a loan tends to be far below its carrying value.

That’s why on 24^th March, at the height of the market panic, the mean price to tangible book value ratio for the 12 biggest mortgage REITs was 0.48, representing a record 52% discount from the book value!

Undoubtedly, the selloff was a result of a liquidity concern, and since then we’ve seen a rebound in the price. On 22^nd May, the mean price to tangible book value ratio was standing at 0.88 - a more respectable figure, but still a bargain, especially when considering the fact that historically these companies trade at a premium.

Looking at the past six months, we can see just how big the drop was in the mREIT space. On a positive note, that means that there’s still plenty of room for the upside.

Now let’s look at some of the risks involved in the current valuation of companies.

To start with the elephant in the room: What are the chances of a default in the sector? It varies depending on the company, but because most of the players in this space only issue agency loans, which are backed by the Federal Government, there’s no credit risk.

It’s not a secret that new business is struggling. The Federal Bank of Saint Louis recently reported that new home sales have dropped by 42%. The first problem that stems from this is the complete shock to the whole MBS market and securitisation system. That’s where the Federal Reserve comes in to help, with at least a $200 billion MBS purchase program. This has been a huge liquidity driver in the space and has helped to prevent a deeper crisis. Even still, the number of people applying for mortgages has dropped dramatically and this will, in turn, put pressure on the bottom line for servicers.

We can’t discuss MBS without mentioning prepayment risk. With mortgage rates falling below 3%, a lot more people are expected to be refinancing their mortgages and thus reducing the yield to maturity, right?

And here, I have some good news for you – it turns out that the PSA speed is not increasing as much as expected. As a result of the current economic situation, people are not really looking to refinance their mortgage, according to a press release published by Agency Investment Corp. If this trend of lower PSA speed continues, the fair value of loans will increase by a wide margin.

If everything seems alright, then why are these companies still trading at a discount?

One thing that’s keeping investors up at night is the risk of technical default, or more specifically, failing to uphold some of the negative covenants, particularly those for leverage ratios. The standard for the industry is a Debt to Equity of 9 to 11. Such high leverage may result in a credit downgrade even with the slightest reduction of cash flows. Here, investors ought to be most careful. There are significant differences in the leverage of separate companies and even more significant differences in the net cash position. Some companies entered the crisis well prepared and others — not as much. This is why we don’t recommend buying the whole sector through an ETF, but instead, carefully selecting companies that have a stable cash position and enough credit lines to weather the storm.

With all that being said, we think that the potential return in this sector far outweighs the risks.

Dividend yields for the top 13 companies by Market capitalisation

Currently, the mean dividend yield in the biggest mREITs is 16.07%. That combined with the discount to tangible book value, and relatively low volatility is a recipe for superior risk-adjusted returns in the long term.

Factory data released by Beijing has shown signs that the Chinese government’s push to restart the economy has seen some early results. The National Bureau of Statistics found that China’s industrial production increased by 3.9% in April, its first rise since the beginning of the year. The increase beat even analysts’ projected rise of 1.5%.

Following the figures’ release, early Friday trading saw European stocks buoyed. France’s CAC 40 rose by 1%, Germany’s DAX by 1.3%, and London’s FTSE 100 by 1.3%. The pan-European STOXX 600 index saw an increase of 1.2%.

US futures also showed signs of improving, with the S&P 500 and Dow Jones Industrial Average futures rising by more than 0.3% each, and Nasdaq by 0.5%.

These positive signs were later reversed, however, as it emerged that the US government intends to block microchip shipments to Chinese telecommunications giant Huawei, a move likely to escalate tensions between the two countries. As a consequence, the S&P 500 and the DOW slipped by 1.1%, with Nasdaq ending 1.4% in the red.

China’s own stock indexes saw little change, with the Shanghai composite finishing 0.07% down. Elsewhere in Asia, South Korea’s Kospi rose by 0.12% and Japan’s Nikkei by 0.62%, apparently undisturbed by China’s industrial growth or trade tensions.

This is the message from Nigel Green, the chief executive and founder of deVere Group, as G-7 finance ministers and central bank officials are due to hold a teleconference to discuss the issue on Tuesday.

US Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell will lead a conference call taking place before Wall Street opens. Bank of Japan Governor Haruhiko Kuroda and European Central Bank President Christine Lagarde are also on the call, amongst others.

Mr Green notes: “For many, the joint statement will not go far enough, and there will be doubts about the effectiveness. This disappointment will dampen the market reaction somewhat.

“However, in general, the markets are looking for a reason to return to being bullish – which has been their default position for an unusually long time.
 
“This teleconference between G-7 finance ministers and central bankers will likely provide some of the reassurance they seek.”

He continues: “Many investors will be seeking to buy ahead of any potential measures aimed at cushioning the coronavirus blow kicking in, in order to take advantage of the current lower entry points and, therefore, the opportunities, while reducing risk at the same time.”

Last week, the deVere CEO said: “Until such time as governments pump liquidity into the markets, markets will be jittery triggering sell-offs.”

[ymal]

Mr Green affirms: “It was billed as ‘the worst global market sell-off since the 2008 crash’ but it then became an important buying-opportunity for many investors.

“Now, with a more coordinated international response in the pipeline, many investors can be expected to jump off the sidelines again.”
 
Previously, he noted: “In the current volatile environment, investors - including myself - will be revising their portfolios and drip-feeding new money into the market.”

The deVere CEO concludes: “Central banks and finance ministers of the G7 discussing an action plan to take on the far-reaching impact of coronavirus will buoy investors.  

“Many will be seeking to increase their exposure to the markets ahead of the implementation of any measures that are rolled out as a result of this conversation.”

Still, there are countless success stories of humble immigrants coming to the US with not much more than their dreams (and a hard work ethic), beating the odds, and becoming millionaires (and in many cases, billionaires). Elon Musk of Tesla is one of the more recent examples, but there are thousands of other immigrants who came to the US, put in the work, and achieved their dreams. 

So then, how does one start the process of becoming a millionaire? What are some of the nuances of the US economy that immigrants need to be aware of? Should you invest in real estate? What about the stock market, or its less-than-stable cousin cryptocurrency?

Whether you’re looking for tips on forming an investment strategy, want to learn more about how the US economy works, or simply need some advice on saving money, we have you covered. Below we cover everything you’ll need to be prepared for the process of becoming a millionaire in the US. 

Million Dollar Saving Strategies

Believe it or not, most people have the ability to save up to a million dollars in their lifetime. Even if you’re not making a six-figure salary, you can easily employ some basic saving strategies to stretch your dollars into a million (over several years, of course). 

With that being said, there are a few major variables that can affect how long it will take you to save (up to) a million dollars. These variables are listed below:

• What your annual revenue is (i.e. how much money you earn per year)
• What your annual expenses are 
• How much money you’re able to save on a monthly/yearly basis 
• What the growth rate of your investment(s) is
• What your savings rate is (i.e. the percentage you’re saving relative to your income)

The majority of financial planners in the US recommend saving at least 10 to 15% of your annual income. If at all possible, and you want to increase your savings rate, you should try to up that percentage (at least a little bit). Saving as much as possible, cutting costs when it makes sense, and living frugally (note: not cheaply) can all help to maximize your savings strategy. 

Making Your First Million Will Be Difficult: Prepare Yourself 

Lots of people have the quintessential romantic notion that they’ll work hard for a few years, meet the right people, the stars will align, etc., and that making their first million will somehow “just happen.” However, the reality of the situation is that making your first million dollars is almost always an uphill battle.

Lots of people have the quintessential romantic notion that they’ll work hard for a few years, meet the right people, the stars will align, etc., and that making their first million will somehow “just happen.” However, the reality of the situation is that making your first million dollars is almost always an uphill battle.

Luckily, though, that battle really only applies for the first million. As you should know by now, it takes money to make money (and having a million dollars to invest in your business ideas/investments makes it a lot easier to increase your revenue). There are tens of millions of millionaires in the US, and many of those are immigrants. 

Indian-born immigrants account for many of these millionaires. But millionaires can come from anywhere and achieve their wealth through different methods, which means that it’s possible for anyone to become a millionaire - you just need to understand that it will take a certain work ethic and a lot of financial savvy. 

Note: If you’re an immigrant looking to start saving money, you should think about finding a side hustle (or two, or three). Most independently wealthy individuals amassed their wealth through hard work (i.e. not just working a basic 9 to 5). Jobs for Indians in the US can be found via countless online resources.

[ymal]

Quick Tips for Your First Million

Use some of the basic tips posted below to increase your chances of becoming a millionaire. Remember, becoming a millionaire in the US should be thought of as a journey, and emphasizing the actual process (rather than the result) is what will elevate your finances to the next level.

• Focus on finding investment opportunities to increase your annual revenue
• Increasing your number of revenue streams is vastly undervalued (and very important)
• Avoid taking on debt (even if it’s for business reasons)
• Live as frugally as possible (but don’t neglect your health or mental well-being)
• Constantly be learning and developing new skillsets
• Look for new employment opportunities and/or side hustles that can increase your revenue stream
• Save as much money as possible and then invest that money into emerging markets

This morning's news comes as no surprise given the state of play, but as the Dow Jones hits its third-worst point in history, investors are waking up to the prospect that this may be just the beginning of what’s to come.

Some economists are warning that the pandemic could push the Bank of Canada and the US Federal Reserve to consider cutting interest rates sooner rather than later; a clear sign of more to come. Benjamin Tal, deputy chief economist at CIBC Capital Markets, told The Financial Post: “It is reasonable to assume that coronavirus is going to last longer given the infection rate is higher than SARS and is still climbing. That itself, might convince the Bank of Canada and even the US Fed to cut interest rates. I wouldn’t be surprised.”

“This is just the beginning of coronavirus, and there is a consensus starting to be generated that maybe, it will last longer than expected.”

In terms of numbers, the Dow Jones Industrial Average dropped 1,031 points, or 3.56% on Monday, while the S&P 500 plunged 3.3%, the biggest drop since last August. Global demand for oil has stalled, leaving the price to fall as much as 4% over the weekend. The price of gold on the other hand, went up, as investors attempt to put their money where it’s safe.

According to Frances Donald, chief economist at Manulife Investment Management: “The virus spread comes at a time when companies are already facing significant inventory restocking and a stalling in global manufacturing following the application of tariffs and overall trade tension…Coronavirus is adding salt to the wound.”

The good news is that based on past research from the Bespoke Investment Group, over the past 11 years, declines of more than 2% for the S&P 500 have resulted in healthy rebounds, particularly when the largest drop happens on a Monday. However, both analysts and investors are highly sceptical moving forward, and the next few weeks should give some indication of how stocks will play out in the wake of coronavirus’ furore.

As we celebrate the last decade of fintech, one thing that has stood out is the impact digital lending has had on consumer lending habits - and their options. With more financing options available than ever before, the market is fraught with lending options to suit each need, credit score and repayment condition. Online instalment loans have exploded onto the scene, giving credit card usage a run for its money, while peer to peer lending platforms are now the norm.

In the industry, experts are already looking ahead to 2020 and beyond, predicting the prioritisation of financial health and the vertical integration of fintech across other key industries such as healthcare.

Here are some of the decisions consumers need to keep in mind when considering the multiple fintech credit options available today.

Explore Their Choices

By the end of the first quarter in 2019, 19.3 million Americans had at least one personal unsecured loan outstanding, mainly thanks to the rise of fintech. Wider access to finance options has meant that more of them are turning to personal loans as they continue to live paycheck to paycheck. However, as with most personal unsecured loans, they come with a higher price tag. For unsecured personal loans, the interest rates can range from 5 percent to as high as 36 percent, much higher than the average 19 percent credit card interest rate charged for new credit card accounts. This makes it even more important that consumers do their due diligence when searching for the best loans online.

In 2019, Bankrate put the average interest rate for personal loans at 11 %, and with the influx of online instalment loan lenders, there are even more options with lower rate options. For years, consumers looking for additional finance have thought that high-interest credit cards were their only choice. Now, with the aid of online comparison platforms, consumers can easily find an interest rate they are comfortable with, and more importantly, there is more transparency when it comes to the cost of choosing that particular route.

In 2019, Bankrate put the average interest rate for personal loans at 11 %, and with the influx of online instalment loan lenders, there are even more options with lower rate options.

Check Repayment Terms And Conditions - Including Early Settlement Charges

Yet, this does not mean that borrowers are any more knowledgeable when it comes to the terms and conditions of the loans they are borrowing. In fact, in the United Kingdom, 60 percent of them do not know the rate of their loans, according to research from Mintel, while in the United States of America, Americans are similarly ill-informed. The same can be said for their financial health. In 2019, 43 percent of them didn’t know their FICO scores, a key determinant of their creditworthiness for a personal loan.

However, checking credit scores is now simpler than ever, thanks to credit bureaus and lenders like American Express offering online or mobile login and checking features. Most major credit card issuers offer a view at consumer credit scores from at least one of the three main credit bureaus. Similarly, checking the fine print of personal loans such as passed on charges or early settlement charges that may drive up the total cost of the loan are important. For example, three out of four student loan borrowers (including private loans) do not know what effect their death would have on their loans.

[ymal]

Assess the Impact on Their Credit Score

Fintech lending options are not only lowering the costs of borrowing, but they are also minimising the reliance on credit scoring as a main determinant of loans. This means borrowers with no past credit scores or a low score can easily get a personal loan, whether it is backed by traditional lenders like the bank or more modern peer to peer lending platforms. This does not necessarily signify that the standards of credit scores have completely been erased. Today’s fintech borrower has a FICO score of 650, compared to the 649 FICO held by traditional bank borrowers. However, a lender with a good credit score may also want to consider the additional credit options open to them, such as approval for credit card offers with 0 percent purchases and balance transfers, lowering the overall cost of borrowing.

Finally, it is interesting to note that the age market that currently holds the largest share of the fintech personal loan market is Gen X (ages 38-52) and Gen Y (ages 24-37). This captures the most tech-savvy and outspoken demographics of the market, matching up perfectly against the transparency and personalisation that fintech loans now offer.

However, even with these added benefits of fintech borrowing, there still remains a basic question that consumers must answer before they enter the world of borrowing: what is the best personal loan option for me?

This is the warning from Nigel Green, deVere Group CEO and founder, as the world’s largest cryptocurrency jumped more than 4% on comments made by Jerome Powell that the Fed is investing a significant amount into digital currency development.

Mr Green states: “This is further evidence that not only all major banks, government agencies, plus most sectors including tech, entertainment and real estate, are piling into cryptocurrencies – but that central banks are too.

“The previously sceptical Fed has not, until now, admitted how rapidly digital currencies could become a systemic risk to the US dollar’s status as global reserve currency.

“This is a major step in underscoring – especially to those backward-looking traditionalists – that, whether they like it or not, digital global currencies are not only the future of money, they are increasingly the present too.”

He continues: “The development from the Fed comes following news that China – a communist state and the US’s main economic rival – is currently developing what has been described as an all-powerful cryptocurrency. It could be ready this year and be the world’s sovereign digital currency.”

Mr Green goes on to say: “Whilst there will be minor peaks and troughs – as in all markets - I predict the overall trajectory of Bitcoin to remain upward for the next few months.

[ymal]

“Besides increasing institutional awareness and development, other major factors driving its price advance will be coronavirus.  

“Bitcoin’s price is likely to continue to jump until the coronavirus peaks because of the growing consensus that the digital currency is a safe-haven asset.
“Its status comes from the fact that it is a store of value, scarce, perceived as being resistant to inflation, and a hedge against turmoil in traditional markets.”

He adds: “Another major price driver will be the next halving event.  

“The code for mining Bitcoin halves around every four years and the next one is set for May this year. When the code halves, miners receive 50% fewer coins every few minutes.  History shows that there is typically a considerable Bitcoin surge resulting from halving events.”

The deVere CEO concludes: “The Fed’s public acknowledgement of cryptocurrencies was important, but most investors have already known that major central banks around the world are developing crypto.  

“As such, the main drivers for Bitcoin price for the next few months will remain coronavirus and May’s having event.”

(Source: deVere Group)