Podcast Episode 26

Unleashing Innovation: Navigating the Fintech Frontier – A Deep Dive into Entrepreneurship

Embark on a riveting journey into the world of fintech entrepreneurship with host Ryan Davies and special guest Andres Klaric, the visionary CEO and founder of Fuse Finance. In this dynamic discussion, Andres recounts his inspiring background growing up in Bolivia and the pivotal moments that led him to reshape the financial landscape. Discover the core values driving Fuse Finance’s mission, ranging from enhancing digital capabilities for lenders to streamlining collaboration between technical and non-technical teams. Gain insights into the future of fintech, including the pivotal role of automation and emerging trends in banking, payments, and risk management. Don’t miss out on this deep dive into the intersection of innovation and finance, and learn from the experiences that have shaped Andres Klaric’s entrepreneurial journey.

Andres Klaric

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Ryan: I’m your host, Ryan Davies, and I’m hosting today’s discussion, Unleashing Innovation: Navigating the Fintech Frontier – A Deep Dive into Entrepreneurship with Andres Klaric. How’d I do?

Andres: You did Great.

Ryan: There we go. Here’s a little bit about Andres for our listeners. After growing up in Bolivia, he saw some pretty clear divides in wealth and opportunity. That inspired him to bring about a change, starting with addressing Bolivia’s health care system issues in high school. After studying at the University of Pennsylvania, it opened his eyes further. He dove into the world of finance, working with some absolute behemoth giants like Goldman Sachs and Credit Suisse. He learned about global finance and is always picturing, you know, keeping the bigger picture in mind. After his Harvard Business School, he defined his direction even a little bit more. And the need for a purpose in business really became his personal philosophy. After transitioning to a couple of different capital groups to work with, he built Fuse Finance, and as the CEO and founder of Fuse, he is building the future of loan originations and how to reshape finance. Andres, anything I missed there to add to that that I see also that you’ve got a big, you know, a formula one love affair. So are you? Are you following it in Vegas this weekend?

Andres:Yeah, I have family in Vegas. My sister is actually there for the race. So she was sending me a couple of pictures of her at a golf course, and she actually got to see some of the drivers and some actual pros, golf pros playing with Longside with them. So she’s actually having a hell of a week. I will just watch it from the comfort of my home this time.

Andres Klaric’s Journey: From Bolivia to Finance Giants 

Ryan: Say you get the pageantry of Vegas with the stage of Vegas and the pageantry of F one, you put those together, you know, it’s going to be incredible, but we’ll try and live up to that here today with, some pageantry and some fun here on this, on this episode as well. I kind of want to dive in with you a little bit here about your background and, you know, again, growing up in Bolivia, how you kind of saw and see how the financial system and what’s led you to this path.

Andres: From an early age, Bolivia, like in the eighties, underwent what it was called, like at that time, shock therapy, right? Like, we had hyperinflation. So, the government had to do plenty of things. Banks were going bankrupt. So I grew up with parents that had lived that, and I grew up with that experience of seeing bankrupts, that kind of stuff. So I saw a pretty unstable banking system came to America and saw the same thing kind of at a much more global effect, like seeing the 08 crisis unfold and like how that scars you as a teenager, early twenties guy, kind of seeing that sort of crisis unfold and like pretty much like questioning what’s going to happen with the system. Financial institutions are also a huge catalyst for growth. They’re the engines of our economy because they, by virtue of facilitating credit or money movement, just get things done, right?

And being the son of immigrants, I remember from an early age going to the bank to pick up the money that one of your relatives had sent you and things like that; you always see banks and finance institutions as agents for change, and actually, not necessarily the way that sometimes they get depicted in the media as complete negatives. I always saw them as this wonderful place where you could get a loan, you could get money, and you could put the money that you earned through the day. So when the opportunity came up to be part of the system and also now I used to change it and make it even more efficient. The mission really aligned with that kind of DNA, that relationship that I had established. What are financial institutions as a whole? 

Fuse Finance and Reshaping Loan Originations

Ryan: That’s a great inspirational story, right? Of what got you here to start your own company, not like to expand off of what you were doing and do this with, with views, particularly what, what kind of unique value do you believe that, you know, you bring to the market from, from that perspective and how have you been able to to do so?

Andres: Yeah, at a macro level, there’s the mission division. The utility that you bring to the lenders and the value proposition is quite simple. It’s you who becomes much more digitally native. You allow them to access tech tools that today, like they need to stand in line to get from their current providers or vendors. Second, we are facilitating the interaction between technical teams and nontechnical teams. Meaning engineers do not need to do any more things that are less hot changes, like things that annoy them and distract them from bigger strategy types of goals. The business teams can do stuff that today was left kind of, in the zeros and one’s type of world, right? Like the coding world, they do not need to code changes; they can do rate changes, change, and use underwriting tools in a way that visualizes. It looks more like an Excel or decision tree that they understand versus kind of that world far removed from them. That was the coding world, right? Via low code. No tools.

Last but not least, the third thing we give them is the dashboard, meaning whatever they see on a day-to-day basis reflects their nature, seniority, and like kind of responsibilities of the role and not just a kitchen sink that it’s very difficult to understand with the multiple tabs. It’s more like, hey, if your job is to do XYZ, then your screen should just be XYZ. It shouldn’t be like all day, seeing all the alphabet of things they needed to do. So that’s like what the value prop is for the lenders. What inspires me as a founder, like my motive, is helping lenders reduce their cost of operations if you reduce the cost of operations and turn them into much more efficient machines. Ultimately, that means that lenders are going to have the possibility of issuing more loans. If they issue more loans like that, that business owner that is being denied today is going to say, yes, that student is going to get that student loan to go to college. So, like that, a more efficient lender translates into more loans for folks. More folks mean more, and that flies well into the economy.

Fintech Challenges and Solutions: Navigating Regulations

Ryan: And you know, you touched on this there already about how this is rapidly changing in every evolving landscape, right? As it goes from, as you said, where you had to be in line, you still do a lot of face-to-face stuff, and quickly, it’s evolving into automation into some things that you can create efficiencies for. Can you share some insights on the importance of being able to adapt to these technological advancements and staying ahead of that curve in fintech and how you’ve been able to do so?

Andres: Absolutely, like the fintech, especially like the newcomer start-ups, like do not have the kind of their weaknesses, they have their strengths, they can move faster, right? They do not have a branch network that they are going to cannibalize, right? Or at least that’s not the top of my mind. They don’t need to think about it. Hey, if I bring everyone, what am I going to do with my physical footprint? And banks have that physical footprint that, hey, you actually have an advantage of being top of mind for that particular borrower or banking customer. They go a couple of times a year and stop with you. But like you’re asking them to fill out the very cumbersome forms. Like why don’t you make that human interaction that you’re having much more meaningful? Reduce keystrokes and things like that and help them turn what today is perceived as a cause or like a perceived weakness. It’s an actual strength. Humans still like to strive; we love interacting with humans. So, make that branch interaction much better. If you’re a more established player, if you’re a fintech, it’s how you actually like to make your current competitive advantage even stronger.

Like how do you approve people faster? How do you actually delight customers? How do you connect to better capital sources?  So, if you’re just lending to Prime borrowers, why does that expand into soft prime borrowers? But we’re just starting a parallel partnership with another lender that you connect, through f like all those two like value props apply across the spectrum. But the overall narrative here is that automation is the name of the game. Like if you do not decide, you’re making a conscious choice not to automate, you’re decidedly going to have a kind of a come to Jesus moment in which you realize you need to do this and adopt it because just the demand for it is your customers are going to push in that direction.

Ryan: Yeah, that’s the level of expectation and adoption that’s coming with that in mind. I mean, I want to ask you because this has got to be one of the toughest questions, and the biggest obstacle in fintech is that it is a heavily regulated industry. So, for fintech founders and in your experience, how have you been able, like what strategies have you deployed to be able to navigate these regulatory environments while still providing that level of innovation that people crave and want to see?

Andres: Yeah, I mean, thankfully, we’re not health care, but like, it’s still heavily regulated. So, you need to be compliant with a bunch of specific standards of excellence. So, we were lucky that we were able to raise significant amounts of venture capital funds. That enabled us to get a lot of those regulatory frameworks to be able to get compliance and all of that. That being said, to this, to the audience of founders of potential founders, to listen to your show, that should not necessarily be a discouragement in terms of, like, hey, there are multiple pieces in the tech stack that lenders utilize.

It doesn’t necessarily require that same level of compliance with our needs because of the type of information that we touch and the type of interactions that we have with the end customer.

But, to any founder out there doing the research, just don’t let that be discouraged. And the founders that are looking at this space, hey, like there’s plenty to build in fintech. There are multiple capital providers. If you have a good idea and a good set of pro points like that should not, you should be able to, hopefully, allow yourself to raise a seed of pre-seed money, right? If you go the route that we took in raising venture capital funds, we’ve been able to overcome some of those hurdles from a regulatory and compliance standpoint. You still need to keep up. That’s like step one of that. Then you actually have to have a good product. You need to have a real pain point, and that pain point is far more important than being the like the compliance is stable stakes. Then, solving the pain point is by far the most difficult one. And that’s where we’re very happy that we are part of a relationship that resonates with our customers in terms of helping them automate, helping reduce issues with integrations, and really reducing training time for their employees.

Ryan: You touched on that answer a little bit. I want to dive down again because of our audience, what they’re most interested in, and things like that. But what advice do you have for other entrepreneurs in the fintech space when it comes to things like securing funding and building those strategic partnerships that you’ve been so successful at doing?

Andres: First and foremost, its ideas are a diamond, but once you find one, have a framework to get as much clarity and proof points for it without necessarily spending many calories on it. But like you always need to create your ABC or D ideas. And at first, you’re going to explore yourself. You need to be the first person you need to convince that your idea is great or good enough is yourself, right? The one that is going to put the time, and that’s the biggest resource you have, is you. You could get through a level of conviction, and once you get to that level of conviction, you can really put together an equivalent of a CRM in which you say, hey, my idea is to make an XYZ thing. I’m going to check which investors invest in the XYZ of healthcare or fintech or parallel industries for companies that look a lot to what we’re doing but are not necessarily competitors, right? Once you have identified the 50 to 100 funds for which you think your company will be interesting, you need to have good reasons, not because you read on the news that they have money. It needs to be along the lines of. This fund has invested in this idea that looks very similar but in a different industry; I want to get an introduction to this person and the ones you actually have shortlisted; which funds are there that you need to shortlist to which of these funds? I actually have an end, right? Ryan can introduce me to Capital Fund. I’m making up names. I’m going to ask to reconnect with him for a couple of months and be like, hey Ryan, can you introduce me to John and Jenny at this fund? Like, I’m trying to fundraise for this, and they introduce you, and then they like you, you create that cadence, you, of course, there’s an entire playbook to this.

Andres: But you try to. You should spend 4 to 6 weeks studying that entire set of customers because you need to see the venture capitalist as your customers do in the very beginning.

Like they’re in the market for good ideas. So you’re going to need to sell your idea, and kind of expect that, like when you’re trying to fundraise, it’s going to take a couple of weeks, if not months, depending on how complex and how much capital you need to raise. but creates a  time window. I’m going to raise XYZ capital in this amount of weeks or months and communicate that to the market. Have a clear deck. Y Combinator does a much better job than I do here in terms of explaining that step-by-step motion and the clarity of thought that you need to put into those presentations. But what I’m sharing here is what we did, right? We used a lot of Y Combinator guidance in terms of how we initiate as a baseline. And, of course, then you add based on your personality, like who your co-founder is, just the storytelling component, and also where you’re based, right? If you’re in the coastal US, there are way more venture capital funds there, so you can make them in person and have coffee. So I hope that answers your question.

Ryan: Oh, It was incredible. It makes you want to dive into more others for another episode where we talk about just that because we could do it. But also, you shared a little bit about, I guess, breadcrumbs of some of the successes or milestones that your company probably achieved without getting into the specifics. But do you have any examples you’d like to share about any, like again, successes or milestones that you’ve achieved and sort of the lessons that came out of that that you can share with our listeners?

Andres: The biggest success is facilitating, making it easier for our customers to really adopt the technology. So big numbers, right? Like 95% of our reduction in integration time, 80% of tasks being automated like, versus the baseline was 0 with no training needed. For the most part, the doctor dashboards are like the things that we feel proud of. Of course, raising capital is a very happy moment, and we raised over $10 million of capital, but the capital is just the facilitator, right? It’s like money doesn’t buy happiness, but it helps a lot, and it’s the same thing. Raising money doesn’t buy you success, but it gives you a very good shot at really kind of trying to like really executing your vision. So first, what we’re doing in terms of customers. Second, I’ll put pretty much everything second. Still, in terms of the level of happiness, I would say it is at the same level, like just being able to put together a team with an amazing culture that strives for excellence to satisfy our customers. Like those three elements, if you have them. The mojo in the organization is excellent. They feed off each other and make you really look forward to Monday if you didn’t work on the weekend or just never have weekends like Sunday, which is scary. I can answer for most of our employees, and everyone loves what we do. We really bring a game all the time, and we’re here to win it. I’d be very proud of what we do if we don’t.

Building a High-Performing Fintech Team

Ryan:  I was going to say you’re a founder in fintech, and you’re in a growing business, you don’t get weekends off, and you don’t get to pretend you’re the guy who works all weekend, too. But you know, when you’re talking about building that team, how do you approach building and leading a team in the fintech industry? What qualities do you look for when you’re hiring for your company?

Andres: You want diversity of thought, right? But, you in terms of like people that are willing to descend with you because they’ve been thoughtful, not just for the sake of being a contrarian, right? They actually have that perspective.

You want those people that match with the energy in terms of hard work and commitment. The people who deliver are what you want, like people who are willing to put in the hours but also work smart. Like it’s not necessarily, you need to be. For me, it’s the output and the quality of output. If it takes you two hours or it takes you 20, at the end of the day, the output is what you’re likely to measure on effort matters. But unfortunately, our customers also don’t care if we work two months or two days, and then all they care about is. So you need to translate that in a compassionate way to your employees but also have that high standard for everyone else.

Ryan: Absolutely. That’s a great way of putting it there; let’s talk here as we’re coming to a close about how you see the future of fintech evolving. You talked about the kind of automation and efficiencies still being the focus. But as you mentioned, it’s almost like table stakes that these days, if you’re not doing that, you’re going to be a legacy dinosaur. But from the other side of that, are there other emerging trends in fintech that business leaders should be aware of? Or are there areas that it’s pivoting tour? It’s still really all in on that. How can we create more efficiency and digitize more of the industry?

Andres: Yeah, I mean, banking course, they’re definitely going to, I mean, there’s so much stuff that’s still on frame banks that is definitely going to have its own process of disruption there. How do we even think about payments? Payment rails the whole notion of cash. how has that moved dramatically over the last 20 years? And each one of them is in a show in itself, right? On the lending side is how we actually increase the efficiencies. But we also find ways to create incentives for the people that, like regularly will, default so that they actually continue to remain on track. So flexibility around landing all those things that I’m pretty excited about what others actually innovated around in terms of risk management, that kind of stuff. In the meantime, we’re going to help our partners adopt any of that technology so that they don’t miss out on whatever happens in payments or risk management. From that perspective, we want to be that orchestration layer where all these applications are developed, and we effectively become the operating system of the financial sector.

Ryan: Amazing. That’s a good place. We’ve talked about the past, the present, and the future a little bit here, and, you know, really help navigate waters for people who are trying or in getting into, breaking into deep into, the fintech area. And I want to leave them with a chance to get to know you more about where they can find you and where they can learn more about fuse finance. And then, if there’s an opportunity, you’ll learn more about how they can get in contact.

Andres:   I think LinkedIn is the best source. I do not usually get back to people within a week or so if it’s been a busy one or within a day; if time allows, I put as much content as I can there to help my customers first as my audience. But like if, if you’re a fintech junkie like I am, you probably will find some use in the stuff that we share there and on the page of the company if there’s more to discuss, and I’ll be more than happy to set up a call, with folks that reach out, paying it forward is very important.

I have people who mentored me through the years and helped them back, helping others back. It’s the name of the game.


Ryan: Incredible. We always appreciate when people extend that invitation, and you know, we are so open and caring to do that. Fuse finance.com is the website. So go check that out as well and learn more from what they do as well. Andres, I want to thank you so much for your time today. I know you’re a very busy man, and I really appreciate you being able to share some of your thoughts, insights, and wisdom around the fintech waters here. Thank you so much for being here.

Andres: Thanks Ryan. I appreciate it.

Ryan: So, with that, we wrap up another amazing podcast, unleashing innovation and navigating the fintech frontier in a deep dive into entrepreneurship. And I want to thank our listeners. We cannot do what we do without you. So, until we meet again with another amazing TBR episode. I’m your host, Ryan Davies. Thanks so much for listening today. Until next time. Take care. Thank you.

About Our Host and Guest

Director of Marketing – Ekwa.Tech & Ekwa Marketing
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Cofounder at Fuse
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” Financial institutions are huge catalysts for growth, and they’re the engines of our economy because they facilitate credit or money movement. Things just get done. And I remember from an early age too, like going to the bank to pick up the money that one of your relatives had sent to you and things like that, you always see banks and finance institutions as like agents for change.”

– Andres Klaric –