We interviewed Dancerace. Below are their answers.
Dancerace covers the UK and Europe and the Asia Pacific regions. I read on your website that Dancerace has 30 years of experience. Can you tell me how Dancerace started and who were the founders? What was the original idea behind Dancerace?
Dancerace was founded by technologist Anthony Avison in 1992. Anthony was commissioned to develop a new core lending platform by a consortium of UK lenders, to make their day-to-day invoice finance operations more effective and efficient via a simpler factoring system. Anthony’s founding vision was to create a lightweight, scalable and easy-to-use system, as an alternative to the complicated and inaccessible systems available at the time.
This spirit of advancement via technological innovation has defined Dancerace since the earliest days, and it’s what we’ve built our reputation on.
We were one of the first online banking systems in the world; the first in our space to switch from greenscreen to a graphical user interface (GUI), first to offer an online client access portal, and first to the cloud.
Today, we offer a complete, connected commercial finance OS for lenders and banks worldwide. Our vision for transforming how lenders work and our focus on innovation is as strong as ever. In recent months, for example, we’ve added open accounting functionality to our systems, to allow lenders to connect directly to clients’ online and offline accounting systems, and implemented a unique new hybrid cloud infrastructure model that allows lenders to take advantage of public and private clouds. We’re currently building a fully integrated risk management system, to expand the data analytics features we already offer.
Can you give a brief summary in layman terms of what your software does?
We provide a complete, connected commercial finance software operating system (OS) for banks and lenders worldwide.
Our OS includes tools for lenders to offer and manage a full range of invoice finance products from one system, including invoice discounting, factoring, selective invoice finance, loans, construction finance, recruitment finance and more. There are no paywalls between product types; lending teams can configure and offer the right type of lending product for each client, at the right time. That’s better for the client and the lender!
Unlike other providers, our platform includes front- and back-office systems, to give lenders and their clients the systems they need at every stage of the funding lifecycle.
In our OS, lenders manage their portfolio, products, payments and collections in our c3 backoffice control system. Clients apply for credit, and lenders underwrite their application in our f3 digital onboarding system. Clients manage their funding account in e3 client access.
Our OS is also designed for connectivity. We offer an open API and other connectivity technologies for lenders to integrate chosen third-party systems into their platform, for insurance, banking, payment, collection, reporting and other use cases. This gives lenders fine control and the ability to differentiate their operating model, using their choice of best-in-class software tools. Open accounting functionality is deeply embedded within our OS, enabling lenders to connect directly to their clients’ accounting systems, to view their latest MI and ledger data to invoice level, and to better monitor and manage risk.
Your website mentions that ‘In general, Dancerace’s systems mean we need to hire less’. Can you expand on this point and tell our readers what roles in a company can be supplemented or even replaced by Dancerace’s OS?
While we do focus on helping our lenders to work more efficiently, we don’t advocate replacing invoice finance teams. That’s because we don’t believe that technology can replace human expertise.
Instead, we provide lenders with rich data insights to spot opportunities and risks and to make better decisions. And we provide lenders tools to automate repetitive and low-skill parts of their work, so they can spend their time on high-value, high-skill tasks that offer maximum value to their clients.
Some examples of how we enable lenders to work more efficiently include:
- By enabling lenders’ onboarding teams to collect new clients’ financial data and MI in minutes, by connecting directly to their clients’ online/offline accounting system and to records providers like Companies House (for UK lenders). This also removes the need to work with paper and email and saves lenders weeks of work, while offering a streamlined experience for clients and their introducers. With this technology, we’ve enabled a UK bank to take on and fund a new client less than 48 hours after their initial enquiry.
- By removing the need for clients to continually upload their sales ledger information at month-end. Instead, lenders can draw this data quickly and frequently, direct from their clients’ accounting systems. This improves the client experience and enables the lender to better manage risk, with less work.
Does Dancerace send technicians into companies to help with migration onto the Dancerace OS? Or is this all done remotely? Is this the same for the training you offer in the use of the Dancerace OS?
As part of our lender onboarding process, we help our lenders’ to define their business requirements for their new system as part of a structured Digital Transformation programme. This ensures that we understand and deliver on their business case.
As such, we can offer both on-site and off-site migration and training support, according to each lenders’ requirements.
System migration is critical to project success and is understandably seen by lenders to be a high-risk, high complexity process. For that reason, we’ve made system migrations our area of special expertise. Dancerace has a 100% success rate for migrations and unique tooling to simplify migrations (including historical balances) from leading software providers.
We also provide an online Learning Management System to train new lending teams how to use our system. This includes interactive course elements, videos and written documents to help individuals to learn in the way that suits them, so they can drive maximum value from their new Dancerace system.
Does Dancerace have an ESG policy?
We’re in the process of building our ESG policy. ESG is already embedded into our business decision making and touches all aspects of our business:
- Our private hosting infrastructure is carbon neutral. Our public hosting provider is working towards the same standard.
- Senior staff are provided with electric vehicles.
- Wherever possible, we travel to conferences and industry events using the most sustainable public transport, including overnight trains.
- We work remotely, limiting our commute emissions.
- As part of our Digital Transformation approach, we actively support our lenders to work more efficiently and with a lighter environmental footprint. For example: we recently helped a major UK building society to retire their mailroom by switching to email.
A number of factors have destabilised the current business climate: global supply chain issues, fragility in the banking sector, high interest rates and the uncertainty caused by the war in Ukraine. How, in your opinion, have these factors impacted invoice finance?
It’s been an interesting few years!
On the surface, the invoice finance sector is growing and performing strongly, though we see challenges ahead. The end of the Government funding schemes will be felt sharply and could be painful for lenders – particularly those that have subsidised emergency funding; those that have subsidised their clients to repay emergency loans; and those whose clients are now totally dependent on emergency funding.
At the same time, the market conditions of recent years have prompted significant positive developments for our industry. We’ve seen the launch of several new lenders focused on responsible lending, and others providing fast, easy-to-manage products. Both have been very successful at attracting new clients and have levelled up businesses’ expectations around service. This has encouraged existing lenders to think more deeply about how they support clients. As a result, many have simplified their models and reconsidered their pricing.
Understandably, lenders’ appetite for risk has dropped significantly in recent years. Most are now more discerning about the types of business they support, focused on serving a smaller number of higher quality clients. Funders have also tightened their controls and now demand more from their lenders in terms of reporting, with many switching their requirements from monthly to weekly or even daily reporting.
Special thanks to Dancerace for finding the time to give us an interview. We really appreciate the detailed answers and the insights they provide into commercial finance software.