How to stay ahead in today’s highly competitive business market while staying within a tight budget? It’s a million-dollar question, but the answer is actually not that complex and it might surprise you (well, probably not because you’ve read the title, but still): CAD optimization.

That’s right, computer-aided design systems can help your business streamline a variety of operations, save money long-term, and, most importantly, produce innovative products, thereby staying ahead of your competition. And no, they’re not just for big corporations with deep pockets – today, there are plenty of budget-friendly CAD software solutions that even small businesses can easily afford.

What are CAD Systems?

Let’s start with the basics by defining CAD systems, and then we’ll move on to how to use them to optimize your operations, innovate, cut costs, and more.

In simplest terms, computer-aided design (CAD) systems are digital tools designed to help engineers and designers create, modify, and optimize their designs. These designs can be anything from commercial lifestyle products to buildings. In essence, using this process, your business can create 3D design simulations of real-world products, complete with scale and physics properties, to optimize and perfect them before manufacturing.

As you can probably tell, this means fewer costly mistakes and less wasted time and resources. Now, you might be thinking, “Sure, this sounds great, but isn’t it expensive?” It’s a common misconception, but the truth is that there are now affordable CAD software solutions that, yes, require some initial investment but, in the long run, save you money.

Investing in Your Business's Future

Before we jump into the benefits of using CAD systems, let’s talk about how to choose the right one for your business.

If you have a small business and are unsure if investing in CAD optimization is a smart move, let us assure you that it is: the long-term benefits (which we’ll go into in the next section) far outweigh the costs. Which, as we mentioned, don’t even have to be steep.

Let’s take SOLIDWORKS vs Fusion 360 as examples as they’re currently some of the most popular CAD software options on the market for both small and medium-sized businesses. Fusion 360 is a cloud-based program that can be assessed from anywhere, making it great for remote teams. It combines parametric, direct, and mesh modelling tools, but it's a user-friendly, affordable option that can practically be used by anyone, even folks with no prior experience with CAD software.

SOLIDWORKS, on the other hand, is more expensive but also better at advanced modelling, making it a better option for businesses that design products with multiple components. It’s probably one of the best CAD software for industries like engineering and manufacturing.

So, let’s say you’re considering one of these two programs: which one should you choose? While some people may think they should invest in a pricier option if they want maximum benefits – after all, it offers all the bells and whistles – this might not be true at all. The choice between these two – and any other CAD systems – should first and foremost depend on your industry, specific design needs, and, of course, your budget.

The moral of the story is, when considering investing in CAD optimization, always, always take time to consider your business’ specific needs and requirements.

Benefits of CAD Software

• Streamlining Workflows and Increasing Efficiency: CAD software allows you to automate repetitive tasks, collaborate with remote teams in real-time, and easily share designs with clients. This saves time and helps prevent miscommunication and delays, increasing your efficiency.
• Reducing Prototyping Costs: Using CAD optimization, you can create virtual prototypes that accurately simulate real-world conditions, minimizing the need for physical prototypes. This, in turn, reduces costs and accelerates the development process.
• Enhancing Efficiency and Accuracy: By allowing designers to make changes to their prototypes easily (and cost-free), CAD systems also ensure that their designs are always up-to-date and error-free. This, too, can lead to significant cost savings for small businesses.
• Maximizing Return on Investment: By reducing design times, minimizing errors, and bringing products to market faster, you can maximize your ROI and make your business grow faster. This, in turn, can further improve your competitiveness and profitability.
• Adapting to Market and Staying Competitive: To remain competitive, your business needs to be agile and adaptable, which is where CAD programs can be of immense help. By leveraging CAD optimization, you can quickly iterate on your designs in response to changing market demands, trends, and customer feedback, bringing innovative products to market faster.

All in all, any business that wants to become more innovative, competitive, and operate more efficiently with fewer costs, should consider investing in an industry-appropriate CAD program.

Last year, it began applying a similar approach to tech investments, launching an “Innovation Fund” that enables individuals to access venture capital-type investments in tech companies before they go public. Now just over a year old, the fund is focusing on investments in the data infrastructure, artificial intelligence, and property technology sectors. 

“We created something new, which is a venture fund that the public can invest in,” said Fundrise CEO Ben Miller on the “Financial Samurai” podcast with Sam Dogen. 

Investors can buy into the fund for as little as $10, a far cry from the usual six-figure minimum requirements to buy into traditional VC funds. It currently has a total of 19 assets ranging from early--, mid-, and late-stage private companies to a few public companies.

“We launched the Innovation Fund to democratize investing in these companies because they're not public. OpenAI is not a public company. Databricks was not a public company. Canva is not a public company. I think that everybody needs to be able to invest in these companies,” said Miller on his company’s “Onward” podcast. 

“And then, just to get a little bit into the weeds, we are not taking a 20% carried interest. We're not charging this very massive toll, 20% toll to enable it. I think that’s one of the reasons why we started our tech fund. That’s a practical thing I’m trying to do.”

Fundrise on AI: ‘Our Job Is To Get in the Middle of It’

Miller told Dogen that he’s extremely optimistic about the future of AI and that Fundrise’s Innovation Fund will invest accordingly. He compared the current boom in generative AI to the advent of the internet in terms of creating value, noting that a recent Goldman Sachs study projected that AI could double gross domestic product growth and account for 500 times the productivity gains that resulted from the invention of the personal computer. 

“So the amount of value created and captured here is going to be astronomical,” Miller said. “And that has nothing to do with us. We just happened on the scene when that’s happening. And our job is just to get in the middle of it as much as possible because that’s what’s happening today and that’s the opportunity. It’s unbelievable.”

While there are still relatively few private companies developing large language models — the foundation of generative AI applications — Miller sees an opportunity to invest in companies that provide the necessary data infrastructure for this new technology to thrive. 

“We can play AI at different places in the stack. The data infrastructure is sort of the platform level underneath AI,” he explained.

“You could also think of it as if there’s a gold rush, you can try to find gold or you can sell picks and shovels. The data infrastructures are the picks and shovels. Everybody needs these technologies to be able to do the stuff that is the application. And we’ve been investing like crazy into the picks and shovels because that’s clear and yes, and pricing the [large language models].” 

The fund is also backing companies that stand to benefit from improvements in AI technology. For example, in September, it invested $6.2 million in Canva, an online design and visual communication platform that enables users to create social media-friendly images and text using LLMs. 

Data Infrastructure Investments

The Innovation Fund’s largest position is its investment in Databricks, a data infrastructure provider with a valuation of $43 billion. Fundrise has invested $25 million, a quarter of the Innovation Fund’s holdings, into the company. 

Databricks’ software is used by over 10,000 organizations worldwide. It has raised roughly $500 million from investors such as Andreessen Horowitz, Baillie Gifford, ClearBridge Investments, and NVIDIA. It recently crossed a $1.5 billion revenue run rate at over 50% revenue year-over-year growth and acquired MosiacML, a leading generative AI platform. 

“They are one of the great companies in the world right now. Everybody who's in the tech space knows Snowflake's been absolutely on a tear. Databricks is comparable to Snowflake in terms of opportunity and excellence, in my opinion, many ways better,” Miller told Dogen. 

“To be able to get Databricks now and own a chunk of that company is just so exciting and they are integral. It's a different risk profile. You're not taking a ‘Is this company going to be successful?’ risk. You're taking a ‘how much are they going to grow?’ risk. And I think they're going to grow a lot.” 

The Innovation Fund has also made smaller investments in other data infrastructure companies, including Immuta and Vanta. 

Proptech Expertise

As a company that started in the real estate space, Fundrise has an inside perspective on the proptech sector, and its Innovation Fund has targeted several companies in the space that it uses to help manage its properties. 

Its first proptech investment was in the property inspection software platform Inspectify. The fund invested $4 million in the early-stage company, which is currently valued at $47 million. 

The fund followed this up with a $2 million investment in Jetty, a mid-stage company that provides a unified financial services platform for renters and property owners with four features: security deposit replacement, renter's insurance, flexible rent payments, and rent reporting. 

Miller noted that these investments in technologies that are adjacent to its platform mean that the fund can add value to these companies. 

“When we sent out our email to our investors saying, ‘Hey, we invested in Inspectify,’ Inspectify’s web traffic doubled," he told Dogen. “They got a hundred sales leads, which in B2B business is a lot. If we can get more investors, we’re more valuable to the companies we invest in. And so our long-term play is that we bring something to the table that's different. Sequoia brings all sorts of things to the table. They don’t bring 2 million investors. So there's a potential network effect.” 

‘You Have To Get Access’

The Innovation Fund is still in its early stages, and it’s too early to assess how this unique approach to venture investing will play out. It’s clear, however, that the fund is doing something different than the standard VC and providing unprecedented access to retail investors who don’t necessarily have thousands of dollars to invest.

“If you have money you say, ‘I want to buy Nvidia, Google,’ you can do that, but if you want to buy the best tech companies in the private markets, you can’t,” said Miller. “You have to get access.”

By Bruce Martin, CEO at Tax Systems

Yet, within this important movement, a key aspect of finance – tax – can often be neglected, with many organisations missing significant opportunities to boost effectiveness as a result.

In reality, this is not surprising. As a constituent part of the overall finance function, tax may not be viewed as a priority area when organisations come to implement digital transformation projects. Moreover, tax is ultimately driven by compliance, so the effects of any changes implemented here are felt much less widely than those in other key areas of finance – which are more likely to have a significant impact across the business. As a result, the percentage of the overall finance budget dedicated to digital tax projects typically pales in comparison to other finance functions.

Think of it this way: in getting Environmental, Social, and Governance (ESG) planning and implementation initiatives off the ground, for instance, businesses tend to do the bare minimum until regulations or other pressures force more urgent change. The same idea can be applied to allocating time and resources to tax transformation. What’s more, the unique needs of each business, its position in the finance and tax lifecycle and the proficiency of the finance team play important roles in the budget allocation relating to digital transformation projects.

In this context, and with many CFOs coming from an accountancy rather than a tax background, it’s simply more likely that they will focus on areas more aligned with their roles and experiences.

Untapped potential

And herein lies a growing problem and an important opportunity for positive change. By overlooking tax transformation, many businesses are missing out on valuable insights and efficiencies. Often seen as a compliance box-ticking exercise, businesses do what's needed to remain tax efficient and compliant. Yet, beyond these core objectives, tax transformation holds immense potential.

In practical terms, what does this mean? Implementing tax transformation is all about enabling tax professionals to focus on their areas of expertise: evaluating tax positions and maximising efficiency, while automation assumes the role of handling repetitive tasks. While this could be unsettling for some, the objective is to use advanced tech tools to boost efficiency and productivity. It’s certainly not – as some people fear – about using AI to replace jobs, and for those people at the sharp end, tax transformation frees them to do the jobs that fit their expertise, not the jobs that automation can replace.

In this situation, tax professionals are empowered to focus on more value-add tasks that can make a material impact on business performance.

These are crucial considerations given that the general direction of travel is clearly in favour of greater digitalisation of the tax function at all levels. This includes HMRC, which is gradually integrating technology more deeply into its capabilities and processes. As they work towards building a “trusted, modern tax administration system,” changes they bring forward will inevitably be reflected in the way organisations interact with them.

Ultimately, using technology to deliver tax transformation can undoubtedly contribute positively to a company's cash flow and overall financial strategy. Organisations can only reap these benefits, however, if they adopt a mindset which sees the tax function as being driven by more than just regulatory compliance.

By viewing it as an integral part of a wider digital transformation strategy, it becomes possible to leverage the capabilities of both tax professionals and emerging technologies for maximum impact. In the future, those organisations that give tax transformation the investment and strategic insight it requires will be ideally placed to deliver on the capabilities and efficiencies that have become synonymous with the digital age.

With digitalisation rapidly progressing and affecting every aspect of our lives – from the way we play to the way we pay – eCash levels the playing field for cash payers.

Much of society is becoming increasingly cashless, with the volume of cashless payments globally expected to rise by 80% between now and 2025. But it’s vital to remember that underbanked and unbanked communities don’t have the luxury of bidding farewell to physical currency. Many people around the world simply don’t have access to a bank account or a debit or credit card.

By digitalising cash, we can offer marginalised, cash-reliant communities access to online payments and enable them to participate in the world of eCommerce and digital financial transactions. It also allows security seekers to pay in cash and avoid having to provide personal financial data online.

In fact, according to our latest Lost in Transaction research study, which examines changing payment habits and preferences, 52% of consumers globally reported that they don’t feel comfortable sharing their financial details online. And 68% said they prefer using payment methods that don’t require them to share their financial details when paying.

Digitalising cash for online transactions

eCash, which enables cash to be used for online transactions, provides access to the digital world to cash payers and security seekers. Popular examples include the prepaid solution paysafecard as well as the post-paid barcode solution Paysafecash.

Paysafecard comes as a voucher with a 16-digit code that can be purchased in various denominations at petrol stations, supermarkets and convenience stores. The balance can then be redeemed by entering the code at the online checkout. This solution is particularly popular in the world of online entertainment and includes a spending control aspect that appeals to consumers as they can only spend the amount they have previously purchased with cash.

Paysafecash payments are made by generating a barcode during the online checkout, which can then be scanned and paid for in person at a nearby payment point. This solution has become increasingly popular for online transactions such as rent and bill payments, loan repayments, cash deposits into wallet-based financial services as well as a cash-in/cash-out solution for banking.

Paying for essential services in cash

When it comes to rent, utilities, loans and countless other essential services, cash is still the most available and most immediate payment method for unbanked and underbanked communities.

While many are revelling in how online payment platforms have simplified the process, this same proposition presents a huge hurdle for typically low-income groups who must find a way to pay for these services using cash funds without the luxury of a simple bank transfer or credit card.

eCash can facilitate this process, boosting financial inclusion and reducing missed payments. It allows cash-reliant communities to enjoy all the benefits of paying for services online without having to become banked. They can simply select “cash” as a payment option on the checkout page, generate a barcode and settle the amount in cash at a nearby payment point.

Bridging the gap between cash and banking

There are a number or reasons why people remain unbanked or underbanked and the high cost of traditional banking has certainly played a major role. While digital banks pose an attractive solution in terms of being less cost-intensive, they are still out of reach for anyone who relies heavily on cash.

Implementing eCash helps bridge that gap. It makes digital banking more accessible for cash-reliant consumers, providing them with an easy solution to cash-fund their accounts. Similar to choosing cash as a payment method during checkout, in this case, a barcode for a cash deposit can be generated in the digital bank’s mobile app. The barcode is then scanned at a payment point, the consumer pays the balance in cash and the amount gets credited to their digital bank account.

This also works for other financial service providers that utilise eCash for cash-funding their accounts, providing users access to any number of app-based budgeting and money management tools, setting up savings pots, or transferring money easily to friends right from their phone.

Beyond digital banking, eCash can also enable greater access to cash services in partnership with traditional banks. With bank branches closing and the availability of cashpoints decreasing, eCash payment points at participating retail locations can also be used to withdraw money. To do so, users would follow the steps above, generating a barcode in the banking app for the desired amount.

Paying with cash online

Taking it a step further, eCash doesn’t need to be limited to merchants and service providers who have integrated it as a payment solution. In combination with digital wallets like Skrill and NETELLER, eCash can open the door to online shopping in general.

Users can simply choose paysafecard or Paysafecash to deposit money into either of these digital wallets. This, in turn, allows consumers to use their cash funds with merchants that have integrated Skrill or NETELLER. They can also use prepaid credit cards available through these digital wallets to make payments literally anywhere.

Making progress inclusive

While there is no stopping digitalisation, it doesn’t have to go hand in hand with financial exclusion or remove cash from the payment mix. eCash is a powerful tool to mitigate the challenges of an increasingly cashless world, providing those who continue to rely on cash the ability to pay online for anything from online shopping to essential services.

A major lender to tech firms, the bank faced "inadequate liquidity and insolvency" as it scrambled to raise money to plug a loss from the sale of assets affected by higher interest rates, according to banking regulators in California. Its struggle set off a series of customer withdrawals and sparked fears for the wider banking sector.

The bank's UK branch was put into insolvency from the evening of Sunday 12 March but swiftly rescued by HSBC for only £1 in a move praised by Krista Griggs, Head of Financial Services & Insurance at Fujitsu. “The UK technology industry is thriving and it requires a commitment to long-term success if the country is going to achieve its ambition of becoming a scientific and technology superpower," she said in a statement.

“HSBC’s fast response is a welcome move that will ensure continuity for businesses at risk from the collapse of Silicon Valley Bank. It shows commitment to innovation and I expect to see more involvement from traditional banks as they look to provide stability during disruption - as well as further union between them and FinTech companies as this sector continues to rapidly evolve."

For example, over the COVID lockdowns, business lending in the EU increased by an average of 5.3 per cent, with banks struggling to keep pace with the steep increase in demand. With a recession looming we can expect another increase in business loan applications and financial institutions need to be prepared.

Over the coming months, lenders will need to move fast to process these increasing loan applications. But not all will have learned the lessons of the pandemic and invested in the digital infrastructure that allows them to scale and pivot at pace.  The laggards need to move now, employing up-to-date technology and automation solutions so they can work faster and more efficiently. Otherwise, customers will vote with their wallets and look elsewhere for their banking needs.

The cloud’s silver lining

The first step for banks looking to boost digital innovation is a shift to the cloud.  Today’s customers expect banking processes to be as easy and efficient as online shopping. This can only be achieved through the scale and agility provided by cloud technology. 

Cloud computing provides lenders with secure and agile infrastructure on which they can more easily streamline business processes, deploy new solutions and enable innovation to meet the speed at which customer expectations evolve. For banks looking to ready themselves for an increase in loan applications, cloud infrastructure will let them automate many parts of the customer journey, from application and KYC, through to approval and account management. For example, Cynergy Bank’s use of identity verification automation through its cloud-based platform cut onboarding time from three days to 54 seconds.

Another benefit of using cloud-based systems is the ability to scale more easily. Traditional banks’ legacy architectures make continuous evolution more difficult, as upgrading hardware is often both time-consuming and expensive. In contrast, cloud technology, often used by neobanks, is far nimbler, with the concept of growth an inbuilt characteristic. 

Keeping pace with the customer

Customer-centricity should be the ultimate priority for any bank, whatever the economic climate. It is no longer enough to be able to access banking amenities from your sofa, they need to be available 24/7 and easier to navigate than ever before.  

People say that television killed our attention span, but the pandemic finished off our patience.  

The good news is that, in the UK, banks have already invested in the cloud infrastructure to stay ahead of customer expectations. For example, Yorkshire Building Society knew that to maintain strong customer relationships it needed to move away from manual processes and allow employees to be more efficient. A shift to the cloud has enabled the organisation to become 90% paperless with staff spending less time searching for information on spreadsheets and more time accelerating customer service. This change has seen the Commercial Lending Department reduce the amount of time it takes to produce offer letters and facility agreements for customers by 75%.

Similarly, Santander UK has been able to use cloud computing and digital tools to stay ahead of customer expectations. Technology investment has enabled faster loan origination and decisioning, ultimately improving the overall customer experience.

This speed of service will be critical as banks scale up to better support customers over the coming downturn. However, it is not too late for those who have not yet embarked on the digital journey. Cloud solutions can be seamlessly implemented within a short period of time; start now and you and your customers will soon reap the rewards.

About the author: Thomas Chaplin is Head of Mortgage Product at nCino, EMEA.

But as with any emerging technology standard, progress is littered with both milestones and speed bumps. Below I will outline some of my key observations from working with leading players in this space.

Open Banking will reshape the global financial services system

It is no longer a question of if Open Banking will continue to evolve, but a question of how quickly it will accelerate. As Open Banking’s remit continues to expand, it will fundamentally change how we use financial products.

Open Banking can be used to assess a consumer’s creditworthiness, for example, by opening the doors to novel products aimed at supporting financial health and inclusion. 

The complex world of credit scores will be simplified through the transparency Open Banking provides. Authorised Open Banking fintechs can securely access a customer’s bank account to see incoming and outgoing transactions, providing a foundation from which to accurately assess users’ credit scores and personalise services accordingly. 

Personal Financial Management platforms (PFMs) like Money Dashboard are leveraging Open Banking technology to provide their clients with insights into transaction behaviour. Its retailer clients, such as supermarket chains, benefit from a better understanding of what their customers spend their money on when they are shopping at other stores. Its investor clients, meanwhile, use the data to predict how companies are operating in order to decide whether to invest in a stock. 

Another example of a company paving the way forward is Bud – which is demonstrating what is possible through Open Banking-powered personalisation and AI automation. Banks use Bud’s products to automate lending decisions and perform more accurate affordability checks – improving risk assessment while delivering more tailored services to their customers. 

From Open Banking to Open Finance

In the future, Open Banking will evolve into Open Finance, meaning that data-sharing will not be limited to transactional bank account data only. Other types of (financial) information will become accessible to authorised third parties, creating a more interconnected financial ecosystem.

Crypto wallets, pensions, insurances, mortgages, stock trading and other wealth management accounts – will all become accessible to facilitate easier exchanges of data, helping providers to establish a comprehensive digital overview of a customer’s financial position and encourage continued innovation. 

These benefits will not be limited to retail customers. Another important area of expansion will be to use Open Banking solutions in the B2B space. Highlighting the potential use-cases, McKinsey estimates that merchants collectively spend $100 billion annually on transaction fees. Through account-to-account (A2A) payments, Open Banking players are already enabling the direct transfer of money between accounts without relying on third-party intermediaries or payment cards – offering a real-time and cost-effective solution to the problem. 

Overcoming the biggest challenges

There are three main obstacles on the road to Open Finance:

1. Access to data

How do we make it easy for providers to access data from a broad range of financial institutions? Technological integrations (APIs) must be built to support the efficient flow of data, but building integrations that work with each financial institution is a tedious and fragmented process. To facilitate this, data and API standardisation needs to be implemented in order to make the task of providing access to data across the whole ecosystem simpler.

On the other hand, the reluctance of institutions to share highly valuable customer data will restrict access. This means regulators will need to step in – as they did for Open Banking – to create a legal environment that opens financial data for third parties to access through standardised APIs. 

2. Analysing the data

Making sense of huge volumes of data is already a gargantuan task, even when it “only” covers Open Banking data. This becomes even harder if data from a wider set of financial products is considered. Fintechs will need advanced categorisation engines and other analytical tools to structure and analyse the information they receive.

Fintechs and companies can have access to all the Open Banking data in the world, but if they cannot create a way to analyse it, they will struggle to draw out any valuable insights. Leading providers like Money Dashboard have already done the legwork when it comes to data analysis – its Open Banking categorisation engine has been trained on over 10 years of data, which allows it to accurately classify consumer transactions. Other providers must follow suit if they haven’t already. 

3. Compliance 

Whenever personal information is shared, it is crucial to have a stringent compliance framework in place, to prevent any breaches or misuses of data. This, however, is not the challenge – the real challenge is ensuring that regulation protects the consumer, without stifling innovation. 

In order to achieve this delicate balance, regulators will need to have open and constructive dialogues with Open Finance providers, and together create an environment that nurtures innovation without threatening data privacy. 

An M&A outlook

Open Banking is still a relatively early-stage technology, so we will continue to see a lot of investor activity in this space, with the market expected to grow to $43 billion by 2026.

Companies with an innovative product and state-of-the-art tech will have no problems raising funds. For instance, UK-based Bud raised $80m in June to continue to scale its AI-based Open Banking platform and expand internationally. 

In the M&A space, we expect to see an increase in activity as small, unprofitable companies (who have developed good technology) might decide to look for a buyer as Venture Capital funding becomes harder to access. Some of the industry’s largest players could also merge in order to consolidate the market, create synergies and expand their reach. 

Notably, Apple’s recent acquisition of Credit Kudos, which develops software that uses consumers’ banking data to make more informed credit checks on loan applications and is a challenger to the big credit reporting agencies (Equifax, Experian and TransUnion)., signals interest from further afield. With more and more businesses making inroads into financial services, M&A activity in this space is heating up.  

Having advised on a number of M&A and fundraising transactions in the Open Banking space, Royal Park Partners have seen first-hand the impressive leaps companies are making to transform Open Banking and increasingly Open Finance into a positive and productive tool for customers and businesses. In the future, Open Finance will provide the infrastructure to connect all financial products that consumers and businesses use, while also providing access to innovative new solutions.

The digital imperative for financial services firms cannot be understated. In order to ensure their (and their products’) relevance in the future, they will have to embrace Open Banking and Open Finance technology.

About the author: Ricardo Falter is Fintech M&A Associate at Royal Park Partners.

Growth cannot be achieved by compromising the quality of the loan portfolio by any lender. A risk-based approach is adopted after due diligence of the credit assessment report of a borrower’s risk profile.  

The advent of AI with the new-age loan origination software is disrupting the cumbersome manual process of a loan cycle. Time is taken for borrower’s data collection, reviewing an application for missing or fraudulent information, financial spreadsheets, and risk modelling, the disbursal, and monitoring of the loan is fast, efficient, and free-of-human errors. 

The number of fintech companies that have entered the space to build a customised high performing loan origination system is increasing at a fast pace. The decision to choose the right loan origination software becomes difficult for a bank looking to revamp the whole lending experience for all the stakeholders.

Installing a change in the loan solutions system is capital intensive. A bank has to close a good deal after checking a few critical features in a promising LOS. Let us examine a few of these features that are highly essential:- 

Easy To Use

A good LOS will be easy to use by any person who has basic computer skills. A borrower cannot be expected to understand the beta versions of any software. The system should be backtested for the features it claims to perform. It should not have any break-points and the automation should be flawless. 

The LOS system has to integrate all the functions and service stages of a loan. Right from the origination of loan application, credit approval, disbursal, and monitoring to the closure of the loan have to be serviced through a single platform. A system that was engaged to solve manual loan generation problems should not be a source of more problems. A single interface that allows the borrower to experience a seamless experience in: - filling in personal information, uploading required documents, and interacting with chatbots of support teams from the origination to the closure of the loan is the solution for any lender. 

The backend of the LOS that can be accessed by various loan servicing departments of the lender should be able to:- communicate, read the analytics, disburse loans as per the recommendation generated by the software, and track and monitor the loans for changes in the ability of the borrower and close the loans when the final payment is completed. All this has to be serviced by a single LOS. 

Compliant With The Regulations

Credit growth is synchronous with a booming economy. But for sustainable growth, risk mitigation is imperative. The financial meltdown of 2008 cannot be forgotten in haste. A consortium of banks globally designed a regulatory accord that is popularly known as Basel III. All the major banks and lending institutions that are under the watchful eye of the federal regulator follow these reforms and update their systems to meet the requirements. 

A loan origination system that runs the applications through a quality control set to meet all the requisites of the regulator, can be recommended for its compliant features. 

Single Unified System

Banks have different loan products servicing different needs of the borrower. The features and qualifications differ from one product to the other. Any bank would like to use a single system for all the different types of loans that they offer:- student loans, consumer credit, home mortgages, commercial credit, car loans, etc.

The economies of scope and scale can be utilised by using a single unified system for LOS. Consider the case of a student who has been paying his loan in time and maintained a healthy relationship. Whenever he/she graduates and starts working they may need a car and house. These loans can be offered by the system automatically in all the digital communication systems the borrower uses. By the click of a button, the borrower will express his intention to either go ahead with the new loan offer or reject the idea for now. A holistic view of customer management can enhance their experience and engage them in longer relationships. 

Support And Maintenance

Banks understand the needs of their customers and customise their products to meet their end-end requirements in a life cycle. Likewise, banks that will be sourcing the Loan Originations Software from a technology provider, need someone who understands their workflow. The coders of the software have to step into the shoes of bankers and design the system from a lender's perspective. Minimum to no-human intervention in the stages of decision-making of a loan application has to be enabled by deep neural networks. 

The system should not stop working at any stage of the day. The idea of digitised lending software is to make it accessible 24/7 for prospective customers. When the interface works 24/7, there can be issues with tech glitches. There should be a dedicated team that looks into tech glitches round the clock. 

Easy To Customise

A lot of LOS providers have sold the same product to many lenders. The product that a lender buys should be a white plate interface that can be customised with lenders' workflow specifications. It should also be flexible to be upgraded without overhauling the entire system. 

All lenders don’t have the same pre-qualifications for loan applications. Some may have more checks than others. Subsequently, the workflow in the stages of the loan cycle may differ from one lender to another. A LOS can never be a one-size shoe that fits all. It has to be customised as per the lender’s workflow requirements, stand out in the competition, accommodate future requirements that can be easily embedded into the existing system and be easy to operate delivering accurate results. 

Conclusion

A bank after considering the features has to choose a software that is objectively highlighting the essential features. Nonetheless, such software also has to be scalable and advantageous cost-wise for the banking and lending institutions.

Among other social issues, climate change awareness has increased significantly in circles of investors, and institutions are taking notice. Indeed, the extent to which a company is recognised for its environmental, social and corporate governance (ESG) has emerged in recent years as a key criterion for investment, and this is clearly more than a fleeting trend. Today, sustainable investing, also known as ESG investing, is a significant market force. 

As a result, institutions have begun implementing ESG goals in their portfolios. While these goals have rendered previously profitable investment sectors no-go zones (tobacco, fossil fuels), new sectors are emerging as potentially lucrative hotspots.

One of these sectors is the supply chain. Massive investment in supply chain visibility has increased efficiency. A side-effect of this investment has been greater control over emissions. Coupled with reduced waste and the potential for greater emission controls, investors stand to gain significantly.

Here's how supply chain visibility can help you achieve your ESG and broader portfolio goals.

A better understanding of Scope 2 and 3 emissions

The supply chain world is a complex one, with multiple entities interacting to produce results. This web of interdependencies makes tracking emissions a tough task. For instance, a manufacturer might use sustainable raw materials and environmentally-friendly production techniques. Yet, if its logistics partners rely on unsustainable sources of energy, the manufacturer's ESG efforts are moot.

Traditional reporting has targeted Scope 1 or direct emissions. These days, ESG guidelines prescribe measuring Scope 2 and 3 emissions created by indirect consumption. For instance, emissions generated through the purchase of utilities such as electricity and water fall under Scope 2. Emissions generated in a company's value chain (such as last-mile emissions) are considered part of Scope 3.

Data visibility in the supply chain is a function of interconnected systems. A logistics company's technical infrastructure integrates with a manufacturer's, allowing everyone access to shipment information relating to locations and conditions. As a result, manufacturers can measure delivery time and track emissions generated per delivery.

Insight into these datasets gives stakeholders a chance to plug ESG leaks. For instance, how well are vendors performing? Are they adhering to ESG guidelines or greenwashing performance? Data allows stakeholders to educate their partners and prioritise ESG goals while maintaining margins, thereby increasing their firm’s attractiveness to investors.

Revisiting product recyclability concepts

Sustainable consumption is becoming an important value among shoppers. As fast fashion companies are increasingly discovering, consumers are not afraid of voting with their wallets. The food and healthcare sectors have felt this impact as well, as moves towards local produce and vegan lifestyles attest.

Manufacturers can leverage supply chain data to understand consumer needs and design reusable products. Data relating to product returns, purchase frequencies, and product damages provide stakeholders with key information regarding product life cycles.

In the past, manufacturers maximised profits by creating fragile products that would inevitably need replacing within a few years. However, as consumer behaviour changes, this manufacturing trend will likely be replaced by a move towards longer-lasting goods. 

Multiple supply chain datasets generated via condition monitoring, inventory, manufacturing line IoT instruments, and customer returns help manufacturers understand their products' life cycles so they can curb waste. Greater visibility also gives manufacturers insight into the impact green materials have on their sales.

By developing interconnected systems, manufacturers can correlate the use of sustainable materials with retail sales and returns. Powerful analytics platforms can detect changes in consumer preferences as they occur, helping manufacturers redesign their processes as needed.

Supply chain visibility data can also be passed on to consumers, offering them ESG validation. For instance, medical packaging in the EU comes with a QR code that gives customer information on product sources and ingredients. Similar moves in retail and food are underway, giving companies the ability to use ESG as an edge in the markets.

Better routes for freight and last miles

Delivery route design is an intricate process, with logistics companies balancing several variables. For instance, vehicle capacity, technology, weather, geopolitical conditions, and infrastructure en route are a few variables that need balancing. They’re also under tremendous market pressure to deliver products on time and in optimal condition.

It's easy to believe that ESG will take a backseat, given these variables. However, supply chain visibility data naturally boosts ESG by reducing waste in the delivery chain. For instance, optimal route design automatically reduces waste caused by improper storage and good handling. 

Automated alerts generated by IoT devices attached to shipments prevent goods from falling out of ideal conditions while in transit. These datasets also reveal the state of infrastructure along delivery routes, allowing companies easy route evaluation.

Given the sophisticated nature of these models, adding a layer of ESG-related goals is relatively straightforward. For instance, designing routes with fewer emissions while balancing other variables is simple thanks to advanced technology such as smart contracts and AI.

Sophisticated route modelling techniques also allow stakeholders to model deliveries before executing them. Thus, emissions and related ESG data can be projected in the scenario planning phase. Any deviations from these expected levels can be examined and addressed to create even more efficient systems.

Better visibility, more sustainability

Visibility data is giving supply chain stakeholders the chance to create efficient processes. A direct result of these efforts is better net margins thanks to reduced costs and waste. Investors stand to gain significantly from these advances while meeting their portfolios' ESG goals.

Numerous finance apps on the market provide a wide range of facilities. Here is a comprehensive guide on the different types of financial apps and how to choose the right one for you.

Main Types Of Financial Apps

Based on the services provided, financial apps can be categorised into different types. Payment gateways are generally used by e-commerce websites to facilitate easy payment for goods using debit or credit cards via payment gateways. For instance, Venmo and PayPal are a few apps that use corresponding gateways on e-commerce websites. 

Budgeting apps are designed to help with savings and expense tracking. They are usually associated with a person’s bank account, and the bank shares the user’s transactions with the app, which then creates a statistical report of all spending. Financial forecasting apps use high-end technologies and artificial intelligence to predict and analyse the risks or profits of making an investment. Banks and financial companies usually use these apps. 

Then there are online banking apps that are most commonly used by the general public. Banks have individual apps for their brand that facilitate customers to track their spending, create an account, and make payments. Bookkeeping apps are widely used by large-scale organisations to keep records of their finances. Peer-to-peer payment apps have become very popular in the past few years. These apps are used to send, receive, and borrow money from your peers. Lastly, there are tax management apps that help you with calculating taxes and filling out tax forms.

Focus On Your Monetary Goals

Using the right finance apps will help you achieve your monetary goals faster. The right apps will assist you with tracking your progress and figuring out areas for improvement. Different types of apps are better suited for achieving different goals. For instance, if you plan to get out of debt after a hefty purchase, then apps like Acorns allow you to set up saving and budgeting goals. If you want to monitor your spending and expenses, apps like YNAB are your best option since they have tracking and budgeting features. So, keeping your goals in mind while choosing an app is essential.

Review The Features And Pricing

The wide range of applications offered by finance apps is obviously not free; they come at a price. You need to weigh out the advantages of the features against their price to pick the best app for you. If you’re on a tight budget, then free apps are a better option. If you’re looking for premium services that help develop goal-oriented monetary plans, then the services provided by apps like Greenlight are perfect for you. 

Sending and receiving money is also another crucial aspect of money management. Check whether the app you choose facilitates the transfer of money between two different apps. Apps such as CashApp and Netsend have these features. Sending money from Netspend to Cash App is a simple and straightforward process. So, you should consider all possible features when picking an app for long-term use. Compare the services and prices of different apps and choose the one that is worth the investment.

Check Reviews

You can’t get a thorough idea of the pros and cons of an app just based on its description. So, the best way to understand if an app works for you is by reading its reviews. Looking through scores and reviews on app stores will give you a general idea of an app’s benefits and drawbacks. Feedback will let you know whether an app is worth using or not. It’ll give you insight into other users’ experiences with the app. You’ll save a lot of time and money by carefully going through reviews. After all, you don’t want to begin using an app only to find out later that it doesn’t meet your requirements.

Security

The foremost aspect you should be looking into before using an app is to check its privacy policies and data protection systems. Your banking information is very sensitive and can pose a lot of trouble if it gets into the wrong hands.  You want to choose an app that has been consistent with keeping users’ personal information safe and secure.

Understanding your financial goals and needs will help you make a better decision when it comes to choosing a financial app. There are a number of options to choose from. So, peruse through them all and you will certainly find one that works for you.

There’s been a lot of money being invested in Latin American startups. Why do you think that is?

There’s a giant sense of community among entrepreneurs in Latin America. Personally, I have been an adviser to multiple startups in the region that have raised substantial capital during the last year and was fortunate to be chosen by Picus Capital as their first partner in a new global network of venture capital partners. It’s really been a two-way street in Latin America for us with entrepreneurs such as Sebastian Mejia from Rappi investing in Clara, among other relevant entrepreneurs and unicorn founders.

Startups are born with a “tech DNA” and are solving needs of customers and companies in a very easy and affordable way by leveraging and/or creating new technology. Latin American entrepreneurs are really focused on this and combine that with that sense of community in the region, these ideas and solutions seem to be expanding off one another.

What problem is Clara solving?

Spend-management for companies. Clara is giving Latin American companies more control over their financial future by reducing the bureaucratic processes of obtaining corporate credit cards and also leveraging innovative technology to give companies affordable, agile, and digital spend management solutions. 

What makes Clara attractive to investors and tech talent?

As an organisation, Clara has a ton of experience in traditional banking, which is essential to understanding our product and services. Clara’s solid business model and tech infrastructure has been attracting sought-after minds in the industry. Our Chief Marketing Officer and Chief People Officer come from Citibanamex. One of our regional directors comes from HSBC and Scotiabank. But at Clara, we also understand that the success of an organisation depends on a mix of seniority and young talent. That’s why we make sure to have a balance of experienced employees and those who are still developing their careers.

It’s not just our people that make Clara attractive, but what we offer them for joining our organisation. There’s no other Latin American startup that offers exactly what Clara does, which we call the “7 Dimensions”. We focus on our employees’ physical health, emotional health, self-development, work environment, financial health, family, and community. Aside from our customers, we want our employees to be happy and healthy in all aspects of their lives. We cannot deliver the best product without a productive team.

Clara’s solid business model and tech infrastructure has been attracting sought-after minds in the industry.

How is Clara committing to financial inclusion in Latin America?

Clara contributes to financial inclusion across Latin America through its offering of digital solutions that align enterprise growth with versatile and dependable resource management. Clara is developing tech products that are easy to use and affordable, with no annual fees or no costs upfront. Clara does more than just that for our customers, though. Clara also has a digital onboarding process where we guide our customers through the platform and how to make the most out of it. We like to ensure our customers understand our products and can use them efficiently. If a customer does have any issues, we have a solution for that, too. When Clara enters a new market, we build local customer service teams to ensure customers speak with Clara representatives who are immersed in the region and able to understand local, regional, and national business needs. Our customers don’t call another country to reach our call centre representatives. They can speak directly to Clara representatives in their region. And finally, Clara leverages our network to offer exclusive benefits to our clients through partnerships with other companies in the region that they would otherwise be unable to secure. 

Who’s using your products and why did they select them?

Fast-growing startups and an increasingly important number of companies in the enterprise segment, including companies in the automotive, logistics, real estate, travel, and tech industries have chosen Clara. Clara is solving a very common pain point (spend management) for Latin American companies through digital tools that can be adapted to any ERP (enterprise segment).

What makes applying for a corporate credit card a hassle for most businesses? 

Applying for a corporate credit card is tough, especially with the bureaucratic processes of traditional banks. Startups don’t have a financial or credit history and that’s why they are often denied corporate credits. Clara gets rid of that red tape and gives startups and big corporations a chance to thrive here in Latin America.

How does Clara help Latin American businesses compete in the global marketplace?

By leveraging Clara’s technological solutions and solid infrastructure, companies are able to grow, rise, and thrive. It’s imperative to match growth with good financial management to reach long-term success. With the bureaucratic processes and often year-long waits to be approved for corporate credit cards, Latin American companies need to remain competitive through agile and integrated digital products that get companies credit and spend management solutions quickly without the red tape.

Where do you see the financial services technology industry going in the future?

In a more technological way, more agile and integrated. Digital payments services and products will rise throughout the region and world.

Where’s Clara expanding next?

Clara has plans to expand into Peru, Argentina, Chile, Uruguay and the rest of Latin America.

These important developments in IT infrastructure will significantly shape the fortunes of financial institutions over the next decade.

Investment in cloud infrastructure must increase because banks will need to create new products, services and experiences to meet expectations from consumers and commercial customers. Intense fintech activity, either by partners or competitors, is also pushing banks into the cloud as the necessity increases for infrastructure that generates greater organisational flexibility. Market research company IDC estimates that to meet new demands and provide new services, banks’ global cloud spending will rise by more than 16% each year up to 2024, hitting $77 billion annually.

Soon, however., banks’ attention will be on the edge, moving processing power closer to the end-user or customer. We have entered the new age of open banking, app-based financial management and the steady expansion of 5G mobile connectivity. The banking world, like almost every other field of business, will become data-driven. Financial organisations will use the edge to create new models of service and hyper-personalised experiences using big data and artificial intelligence (AI) in combination with 5G and highly advanced application design.

The edge will enable banks to easily expand into products based on crypto-currency, non-fungible tokens (NFTs) or stable coins. Custody and trading solutions, prime brokerage services and blockchain-based compliance solutions will be part of this evolution. 

Organisations will transform all their processes, enabling near-instantaneous completion of transactions, settlements and decisions on loans, credit, or insurance. And to compete with global app-based lenders and service providers, banks will have to provide the slick interfaces and ease of use that increasing numbers of consumers take for granted. Competitiveness in consumer and business banking will be about providing a great experience. The dynamism and fast reactions that are essential for these key developments are only available from cloud and edge computing, delivering the necessary speed, low latency, flexibility, and scalability.

Hybrid infrastructure with edge

Yet just as UK financial institutions move into the cloud, the Bank of England’s Prudential Regulation Authority warns against the dangers of vendor lock-in and reliance on individual providers. Data sovereignty laws also continue to make relationships with US hyperscalers potentially dangerous.

Given these constraints, it is obvious we will see banks adopt hybrid infrastructure, combining public cloud and on-premise data centres. This will strike the balance between flexibility and security, so banks locate data workloads where they work best or are best protected. Edge computing will grow in tandem as financial organisations deploy artificial intelligence-based solutions and sophisticated mobile applications.

Using 5G mobile connectivity rolled out by the telecoms companies, edge computing removes the disadvantages of location, shifting data and workloads to regional data centres to deliver faster, low latency responses for end-users. This has clear benefits for financial institutions seeking to offer highly personalised and responsive payment platforms, for example. Any solution depending on location as part of its decision-making needs to process data in an edge computing environment.

Aside from consumer and commercial applications, the edge also has significant potential for investments and markets, delivering high-speed trading capacity anywhere in the country.

Accelerating adoption

The adoption of hybrid cloud infrastructure that includes edge computing will accelerate over the decade, thanks to the creation of nationwide edge computing platforms and the development of effective implementation methodologies. Banks can prioritise data and applications for deployment, whether on-premise, in private clouds, colocation data centres, public cloud or with the providers of national edge platforms.

Colocation can be highly attractive because a bank locates its own IT in a secure and efficient data centre run by specialists. The more advanced colocation and cloud providers are compliant with PCI (Payment Card Industry) data standards, enabling secure use of the full range of card payment technologies. Some providers may also comply with the US’s SOC 2 requirements governing customer data.

New applications and revenues with greater freedom

This is all about flexibility and making advanced, revenue-generating AI applications available almost anywhere. At the same time, business-critical applications that are not cloud-compatible remain on-premise. Banks gain the remarkable computing and data management capabilities of individual public cloud vendors without fear of lock-in or being constrained by providers’ operational practices.

New-generation management tools designed for hybrid infrastructure enable financial organisations to monitor all their data and applications and to optimise all their deployments in the cloud and at the edge. Banks can generate workloads to meet peaks in demand, avoiding excessive expenditure without the risk of missing new business opportunities.

Hybrid cloud and edge computing are inexorably part of the future of banking, given the arrival of these new cloud management platforms. The next ten years should see the most forward-looking financial institutions gain the flexibility and innovation of the cloud and the devolved power of edge computing. Maintaining sensitive data and workloads in secure locations, these organisations will develop highly advanced, hyper-personalised applications and new business models throughout the decade, confident they can flex, re-evolve or scale whenever need be. They will become fully data-driven and dynamic, realising the vast potential of hybrid infrastructure and edge computing

About the author: Simon Michie is CTO at Pulsant.

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