January 2022 - CFI.co Blog

Businesses deal with huge volumes of data daily, and maintaining the quality of this data is critical for making the best business decisions and propelling the company forward.

Quality data must be translated into a digital medium with the help of a data entry system to manage and preserve it effectively. It aids in the reshaping and refinement of datasets that can be utilized for analytics to extract useful information. Data science applications and delivering value to clients both benefit from accurate data.

What Is Data-Science Decision Making?

How Managers Can Use Data Science to Make Informed Decisions — *Image via Flickr by Zaid Alasad*

Data-science-driven decision-making (DDDM) is a method of gathering information based on quantifiable objectives, analyzing patterns and facts from these findings, and implementing methods and approaches that benefit the company in various ways.

Primarily, data-driven decision-making (DDDM) includes achieving key business goals depending on verified, analyzed facts rather than your intuition. Having said that, the data must be accurate and relevant to your objectives to derive true value. Collecting, retrieving, structuring, and evaluating insights for improved data-driven decision-making in business used to be a massive task prior to the advent of DDDM. Though now, because of the advancement of business intelligence tools, users without significant technical skills may be able to analyze and extract insights from their data that aid in data decision-making.

How Data Science Can Help Leaders and Managers

Confident Decisions

Once you start gathering and evaluating data, you discover that it is easier to make confident decisions about practically any business situation, whether you are planning to launch or discontinue a product, modify your marketing strategy, or expand into a new market.

Become Proactive

It is natural for a data-driven decision-making process to be reflexive when first implemented. The data offers a narrative to which you and your company must respond. It is possible to exploit data more proactively with enough practice and the correct types and volumes of data.

Cost-cutting

There are various reasons why a company can decide to invest in a significant data effort and make its processes more data-driven. It is already being utilized to decrease expenses and boost productivity in the workplace.

Thankfully, leaders and managers can learn through various short courses online that teach data science essentials to better understand its overall impact on the business.

How Can Managers Become More Data-Driven?

There are several measures managers may take to be more data-driven in their approach to business.

Identify Patterns

In the most fundamental sense, data analysis is an attempt to find a structure throughout or a connection between numerous data pieces. These patterns and correlations can provide observations and conclusions.

Every Decision Should Be Data Based

When faced with any decision, whether commercial or personal, try to avoid depending on gut feeling or previous experience. Make an effort to adopt an analytical attitude instead.

Visualize Data Significance

Data visualization is an integral part of the data analysis methodology. A table of numbers is meaningless. However, you will be able to easily read trends and come out with conclusions about the data if you create compelling visualizations through graphs.

Therefore, it is clear that you can drive your company to new and thrilling heights by adequately utilizing data and measuring your progress to make informed decisions.

Finance

Collateral Loans: Everything You Need to Know

ByCFI.co

Do you need cash for an urgent expense but you don’t want to max out your credit card? Collateral loans may offer you the money you urgently need but under some conditions.

Loans with collateral enable you to secure the borrowed amount at a low-interest rate. It’s, therefore, a lot easier to get a loan when you put up collateral like your car or home. However, you risk losing the valuable asset if you default on the loan.

You’d want the best possible rate when shopping for a collateral loan. Understanding how this type of funding works can help you negotiate an ideal repayment period. Read on to learn how loans with collateral work and how to find one.

What is a Collateral Loan?

It’s also referred to as a secured loan. This is a loan with collateral and is usually guaranteed by a valuable asset you own. The lender has every right to withhold the collateral if you default multiple repayments. In this case, the collateral can be your car, real estate, or piece of jewellery.

Collateral loans offer larger loan amounts and lower interest rates, unlike unsecured loans. They can be your best option if you have an unsteady or short credit history. If your income level doesn’t qualify you for an unsecured loan, you may also take one.

Common Types of Collateral Loans

The common types of loans with collateral include residential mortgages, home equity loans, and auto loans. Others include car title loans and personal loans.

The lender will use your house as collateral when taking a residential mortgage. You risk losing the property in foreclosure if you fail to repay the loan. Like a mortgage, a home equity loan is taken against a house and features a fixed interest rate.

Auto loans have the best interest rates and use the vehicle you intend to buy as collateral. On the other hand, car title loans have a repayment period of 30 days and are borrowed against a car title. If you’d like to use your personal savings account as collateral when you need a loan, taking a fixed personal loan may help.

How Do Collateral Loans Work?

Expect to find more attractive loan terms and conditions when taking a collateral loan. You’ll enjoy a lower interest rate, a longer repayment term, and a large borrowing amount.

The lender will take some time to determine your collateral’s worth. They’ll look at the asset’s fair market value or appraise it in the process.

The rates for this kind of loan depend on the kind of collateral you want to use. Residential mortgages have a typical rate of 3 per cent, while home equity loans vary from 3 to 10 per cent. Car title loans come with rates between 4 to 15 per cent depending on the lender.

Expect to pay an interest rate of up to 25 per cent per month on a car title loan. The rates for a personal loan are between 9 to 22 per cent.

Their Pros and Cons

Taking a loan with collateral is one of the effective ways to borrow money. However, this type of funding carries certain benefits and risks that you should consider.

On the positive side, the likelihood to qualify for the loan is high even with a short credit history. You may also be eligible for a large amount or even borrow more. Loans with collateral offer short-term liquidity on assets you can’t easily convert into cash.

One downside of a collateral loan is that you could lose your valuable asset for failing to repay the loan. The lender will also require you to have a valuable item to use as collateral.

Always review the prepayment penalties before taking any loan with collateral. Since the funding won’t offer a permanent solution to your cash flow problems, develop an exit strategy. Use the amount for a specified goal and pay it off when you can.

Where to Find a Collateral Loan

Though most financial institutions offer loans with collateral, their rates and terms may vary. Consider banks, credit unions, online lenders, and auto dealers in your search for one. You may also visit storefronts like pawn shops for the same, but with very high-interest rates.

A bank can give you this type of loan if you have an existing account with them. If you’d like a car loan, some banks may restrict you on the car’s model, make, year, and mileage.

Credit unions, which boast low rates, can offer you one only if you’re a member. Some online lenders offer collateral loans if you provide proof of ownership to the collateral. You may also get one from an auto dealership to buy a car of your choice, provided you have strong credit.

How to Apply For One

As you apply for a collateral loan, check your credit, choose the collateral and gather relevant documents. Shop around for favourable rates, choose a lender and apply

for the loan.

You may qualify for the loan with a short credit history, so always ensure your credit reflects the lender’s terms. With good credit, it’s easier to get low rates and favourable repayment terms. Choose an asset to use as collateral and avail your personal information to the lender.

When shopping around for the best rates, get multiple quotes and choose one that fits your needs. After applying, you may receive the money within a day or several weeks if it’s a mortgage.

Consequences for Defaulting on a Collateral Loan

Most lenders may consider the loan default after 30 days of missing a payment. They may allow a short grace period and an opportunity for you to adjust the payment plan.

If you fail to pay the loan with all the incentives, you’ll lose the asset. Carefully lead the contract to understand the payment obligations and review your local laws on the same.

Need More Insights on Collateral Loans?

Though they bear some risk, collateral loans can help you solve an urgent financial issue. They boast low-interest rates and are easy to obtain. Understand their terms before applying for them to avoid losing your most valuable assets.

Find more insightful content on finance, economics, and business from the CFI.co blog. We help readers understand the forces that influence and reshape the global economy. To receive a yearly subscription of 4 quarterly issues at your doorstep, subscribe to CFI print magazine.

Budgeting

How to Manage Your Money While Studying

ByCFI.co Blogger

When you’re a student, money can feel like it doesn’t go a long way and is incredibly hard to come by. Managing your money well while studying isn’t always easy, and many students struggle to keep on top of their finances. Whether you’re thinking about studying or you’re partway through your degree, there are several things that can help you to manage your money effectively.

Decide Whether a Student Loan is Right for You

Deciding whether a student loan is right for you can help you to prioritise what you spend your money on. Many students in the UK are eligible for a student loan, which can help to pay for tuition fees as well as accommodation and other student necessities. Some students may also be eligible for certain bursaries, which do not need to be repaid. Taking out student loans if you are eligible can take away some of the stress of studying and help you to cover some of the major costs associated with going to university. Furthermore, you can also ask your university whether it offers bursaries for low-income students, you can apply for government loans or you can look for the best private loans based on your income level.

Look Out For Student Discounts

Many activities, from transport to dining out and shopping, often come with student discounts. This can help you to save a substantial amount of money over the course of your studies, particularly if you regularly travel home or eat out with friends and other students.

You will often need to show a student ID card in order to be eligible for a student discount. Make sure you are able to collect a card from your university to enable you to prove your student status and make the most of offers and deals. If you’re studying online, contact the university to ask how you can obtain your student ID card.

Study From Home

Studying from home can save you a lot of money in a variety of ways. For example, you could save money on commuting to and from university every day, or reduce the amount of money you might spend on food and drinks outside of the home. You can consider studying online for a degree, which can reduce tuition fees while giving you the flexibility to study from home. Studying an online MBA programme at Aston University, for example, can enable you to attain the degree you want while enjoying the perks of studying from home. It is an increasingly popular choice with first-time students, as well as postgraduate students and mature students returning to education after several years.

Avoid Getting Into Debt

Debt will mean that you have to make monthly payments to pay it off, creating additional costs that can start to interfere with your studies and put you under financial stress. If you already have debt before you begin studying, try to pay off some of the debt beforehand. If this isn’t possible, consider contacting a debt helpline to find out how you might be able to put your debt on hold while studying. You may be able to reduce payments or commit to paying off the debt after you graduate.

Avoid getting into debt while studying, and if you need money for an emergency, ask trusted friends and family or look for credit cards that are offered specifically for students. Student credit cards will often have a lower credit limit, which means you can’t get into huge amounts of debt. Many banks also offer a lower interest rate for student credit cards, helping you to keep monthly costs lower.

Find a Housemate

Living on your own while studying can be financially impossible and cause stress and anxiety when trying to manage your finances. If you’re moving away to study or your income is being reduced while you’re studying, find a housemate who can split the rent and household bills with you. Many students choose this option as it enables them to save a huge amount of money each month. Finding another student can also reduce other household bills such as council tax.

Track Your Spending

Keeping track of your spending can help you to understand more about your spending habits and see where you can make savings. It can help you to monitor your spending if you’re making large purchases, or help you to see where smaller purchases really start to add up over a few weeks. You can keep track of your spending either by using an online platform or app, or by keeping a note of it using a pen and paper.

Sign Up For Student Deals

Some websites and companies offer deals especially for students. You can sign up to receive notifications and alerts when new deals become available, which can help you to stay up-to-date with all the latest savings on the market. You may be able to save money on subscription services and streaming services, shopping for books and clothes, and buying new electrical devices. Look online and ask friends for their top tips on how to save money and make the most of student deals.

Don’t Buy More Than You Need

When it comes to clothing, kitchenware, food and more, many people have a tendency to buy more than they need. This can create a surplus in your home, and it can also mean that you’re spending money on things you don’t necessarily need. Rather than buying a large quantity of food each week, assess how much you really need to buy. Don’t buy enough food to cook every day of the week if you plan to dine out for two or three days. By being honest and accurate about what you do need, you can help to manage your funds better while studying and save money in the process.

Being a student can take a lot of money away from you and make it feel impossible to ever save any money. But certain habits can help you to manage your money and keep on top of your finances in a better way.

Lifestyle

Skills you need to become a successful voice actor

ByCFI.co Blogger

Voice acting is a great career choice for people who have a good voice and the ability to control it. Being a voice actor means you get to audition for and work on various projects like voicing over an infographic, being a character in an animated film, narrating for a movie, or commercial.

Skills you need to become a successful voice actor

Besides providing voiceover, an artist might also function as an actor taking on audiobooks, podcasts, radio spots, or public announcements.

However, becoming a voice actor is not an easy task since it requires a lot of patience, hard work, and training. From afar, people might think voice over is an easy job because it appears that all you need to do is talk, but that is not the case.

To become a professional voice actor, one needs to possess specific skills and train their voice to deliver versatile performances.

So, how do you become a voice actor?

Firstly, you need to possess vocal talent and develop it further. Investing in private coaching, signing up for workshops or going to conferences will help you nurture your talent.

After honing your skills, the kinds of projects you are hired for depend on your skills and personal branding. Moreover, the voice acting industry is commonly based on the freelance business model where voice talent work from home and do all their auditioning from a home-based recording studio.

Once you have established your name in the industry and have some clients, you can enjoy the benefits of flexible working hours, great monetary benefits, and the opportunity to be your own boss.

Here are some of the skills you must develop to become a successful voice actor.

Enunciation

Enunciation is different from pronunciation as it is more about pronouncing the words. Voice actors must have good enunciation to make their vocal delivery clean and distinct. If you are not good at enunciating, your vocal delivery may lack the proper impact. Mastering this skill could be challenging, but it is essential to learn.

If you wish to improve your enunciation, certain exercises and tricks can help.

One must enunciate well as it can increase the chances of landing a commercial voice acting gig. Companies trying to sell something over the radio often require those who enunciate well.

Must have a wide emotional range

The voice actor must possess a remarkable emotional range; you need to have mastery over your voice so that you can properly connect with the audience. Emotions are easily heard in the voice, and when an actor expresses the right emotion, it can make the whole delivery much more impactful. Besides, one needs to have an emotional range to work in different roles and projects.

For instance, a commercial might require you to sell a product, while another might require you to narrate an entire audiobook. Both projects need different emotions and delivery styles, so being able to switch between emotional states will be helpful to booking a variety of work.

Natural timing and delivery

Listeners can easily tell if a voice actor’s delivery is off.

Voice acting is acting. Since you’re not on camera, use your voice to the best of your ability to paint the picture for your audience.

Speaking in a natural tone and pacing your voice may be hard to achieve in the beginning. However, as your career progresses and with practice, you will deliver with greater conviction and control.

Moreover, rehearsing a specific script may help improve the delivery for a better impact.

Voice coaches often recommend actors use their body language as it helps make the delivery seem more natural.

Consistency is the key

Your tenth project would be better than your first, and the twentieth project would be better than the tenth. The more you practice, the more voiceovers you do, the better you will become.

Voice coaches also recommend some exercises to improve your voice, and you must do these exercises regularly to maintain your voice. It might require more than one take to deliver a perfect performance, but you must be persistent about providing the best as an artist.

Training and development of skills are essential to enjoy the benefits of this profession. So, to answer the question, “How do you become a voice actor” one must develop their skills, learn from an experienced voice acting coach, and market themselves to become relevant in the industry. Once you develop the basics, you can learn and polish your skills as you progress in your career.

Banking

The Future of Banking: Trends for 2022

ByCFI.co

As of 2022, the commercial banking market in the US is valued at $862.4 billion. As the world changes and technology advances, so does banking. There are several new trends that will affect the future of banking in the coming years. Keeping up with these changes is crucial to understanding how banks will continue to evolve.

For a rundown of the top banking trends in 2022, keep reading.

Embedded Banking

Embedded banking is a new type of banking that doesn’t use a bank, website, or mobile app. The most common example of this is buy now, pay later options presented by retailers.

Non-financial institutions can utilize financial services through APIs, giving consumers more options when it comes to transactions.

Another popular example is Shopify’s e-commerce software that merchants use. It contains payment services that would have previously been merchant-acquiring business for banks.

Embedded banking can be used by any company, and takes out the banks that act as a middle man between the business and the customer. This is also applicable for B2B activity.

Payments aren’t the only applications of embedded banking. Lending, insurance, and investment can all be processed this way.

As technology advances, so does the capabilities of embedded banking. Automation is more accessible and faster which is very appealing to customers.

Improved Personal Insights

One thing that customers regard very highly is personalization, which is likely to be one of the biggest baking trends in 2022. Banks are focussing on this in a number of ways to increase customer satisfaction.

Improved artificial intelligence and machine learning will make this easier moving forward. Banks will be able to use customers’ personal information to tailor experiences to peoples’ specific needs.

A typical example could be using data from previous transactions to give customers alerts if there is potential for shortfalls in their accounts.

This has already been implemented by some banks in the form of tips to help customers understand and improve their personal credit scores. Wells Fargo also has plans to add a virtual assistant to their app giving tailored insights to customers in real-time.

Facial Recognition

Security has always been one of the most important aspects of banking, and people are always happy if it can be combined with convenience. A lot of mobile devices and computers have facial recognition capabilities to unlock them, and this is starting to move over to banking.

A number of financial institutions in the US are already making use of facial recognition, along with document verification, for mobile and online banking services. Fingerprint scanning technology has also increased in use in recent years for similar applications.

One noted risk with this is the use of “deep fake” technology to make fraud attempts. This could allow fraudsters to create a false image of someone’s face to fool facial recognition systems or even other people.

This is one of the main reasons facial recognition still faces a lot of opposition, as well as the potential for certain biases such as race or sex to affect people.

Such opposition may slow the movement, but it is still currently happening, so it’s not something to ignore.

In-Person Digital Interactions

Virtual branches are a perfect example of how banking is changing. Communication tools are used to simulate a typical conversation that would take place in a physical bank. Some of these tools include:

Webchat
Mobile chat
Video chat
Co-browsing
Document sharing

Some banks across the US have already begun implementing this, helping people still bank efficiently as in-person branch visits have declined.

An example of an app that is already being used for this is Arvest Banker Connect. Customers can read banker profiles to find one that appeals to them and then message that banker directly. A running history of the communication is logged for reference.

Cryptocurrencies

Cryptocurrencies have exploded in recent years and they are unlikely to disappear anytime soon. Many banks have started to move towards cryptocurrencies, and more will do so in the near future.

Some banks already have functionality in their apps to allow their customers to buy and sell cryptocurrencies. A lot of people are still cautious as they are not very well understood, but as they grow in use so will people’s trust.

It is safe to say there will be a lot of growth in the use of cryptocurrencies in banking in 2022.

Matchmakers

The purpose of matchmakers is to form a connection between banks and fintechs. This is done by core-software providers, venture capital funds, and other entities, helping banks to improve their technological capabilities and enabling fintechs to adopt services used by banks.

This is of more interest to regional and community banks as well as credit unions as they often don’t have the resources to source these technologies themselves.

Banks that have formed relationships with fintechs have begun growing faster, which is encouraging other banks to quickly follow suit.

Hybrid-Work Technologies

Over the last couple of years, hybrid work has become significantly more common. As some employers work from home while others are in the office they must be able to communicate and collaborate effectively.

The consensus is that those working from home are at a bit of a disadvantage to those in the office, so banks (and other institutions) are constantly working on solutions to this.

Ally Financial finished a new building earlier this year that has “Zoom Rooms” specifically designed to improve video conferencing. These rooms have a touch panel for employees to sign in and a dedicated screen where participants will appear and can share content.

Keeping up With the Future of Banking

More trends are always appearing, so to best understand the future of banking you need to stay up to date.

CFI is always on top of the latest finance and banking trends, so if you have any questions feel free to contact us by clicking here.

If you want to stay up to date you can also subscribe to our newsletter at the bottom of this page.

Bonds

How to Invest in Bonds: A Beginner’s Guide

ByCFI.co

Investing in bonds provides low-risk cash flow for your portfolio. You can invest in various types of bonds.

Corporate bonds give you access to companies. These bonds come with higher risk but also higher interest rates.

Cities, states, and local governments issue municipal bonds. These bonds come with fewer risks and, therefore, lower rates.

The Federal Government also issues bonds. Their Treasury bonds come with the least risk.

This structure translates into the lowest interest rates.

Each of these bonds can bolster your portfolio. However, knowing the types of bonds only presents a starting point. Gaining additional insights will help you make smarter investing decisions.

Want to learn how to invest in bonds? This article will cover everything you need to know.

How to Invest in Bonds

You can either invest in bonds via a broker or ETF. Brokers let you buy individual bonds in increments of $1,000.

Brokers give you access to corporate, municipal, and treasury bonds. You can also purchase treasury bonds directly from the government’s website.

You cannot spend $100 or $1,400 on individual bonds. You must invest $1,000 at the minimum.

Not everyone likes the high entry point for bonds. Bond ETFs offer a reliable solution. Instead of buying bonds, you buy a basket of bonds.

You can purchase fractional shares of an ETF instead of entire shares. You can get started with an ETF of bonds for as little as $1.

Can the Issuer Pay off the Bond?

When you buy bonds, you must consider an issuer’s ability to make interest payments. Higher risk translates into higher interest rates. This phenomenon explains why treasury yields are so low.

You can make more money with non-defaulting corporate bonds. Review a company’s balance sheet to see if it can cover interest payments. A company’s obligations and growth potential impact its ability to cover the debt.

Establish Your Risk Tolerance

Not every bondholder invests in corporate bonds. Some investors believe these bonds carry significant risks not worth the risks. These investors will focus on Treasury and municipal bonds.

Other investors believe T-bills and municipal bonds carry insufficient potential. They don’t want to park their money for years in exchange for a low return. These investors will take on riskier assets such as corporate bonds.

Before investing in bonds, assess your risk tolerance. Your risk tolerance determines how much risk your portfolio can bear.

Risk tolerance is personal for each investor. Your personal budget plays a critical role in determining which assets you select.

Younger investors often invest in riskier assets. They have more income potential and time to weather downturns.

Older investors tend to pick low-risk assets that produce minor gains. Growth is better than no growth for these investors. Some of them have their eyes on retirement and don’t want to rock the boat.

Bond Maturities

Bond maturities indicate how long a company has to pay off the principal fully. Bonds with higher maturities take longer to pay in full.

Issuers reward long-term bondholders with higher interest rates. A 5-year bond will have a higher interest rate than a 2-year bond.

Higher rates will increase your cash flow. However, it takes longer to receive your principal.

Bond investors should also review inflation rates. A bond yielding 2% will lose money because inflation outpaces the yield.

This issue always concerns bondholders. However, today’s inflation growth makes it more glaring.

You can get higher returns with corporate bonds and stretched-out maturities. Some investors buy into a combination of short-term and long-term bonds.

This strategy gives them access to some of their initial principal each year.

Bondholders often reinvest their principal proceeds into other bonds. They will do the same with interest payments.

If interest payments do not provide enough cash flow to buy a bond, you can buy Bond ETFs.

Selling Bonds to Realize Your Gain or Loss

You do not have to wait for the maturity date to cash out on your bond. Some investors prefer to sell their bonds before the maturity date.

They realize the gains or losses upon selling. Profits will increase your taxes, while losses count as tax deductions.

Bonds are highly liquid assets. You can quickly sell a bond, realize the proceeds, and shift to another asset. Some bondholders switch up their holdings to capitalize on better opportunities.

Why Some Investors Pick up Bond ETFs

Some bondholders prefer to own individual bonds. They want to pick the best bonds and outperform the market.

Other investors opt for bond ETFs. They don’t want to try and beat the bond market.

These investors prefer to mirror the market and reap average cash flow. Nothing is wrong with achieving average returns.

Exchange-traded funds require less work than researching individual bonds. You review an ETF’s holdings and invest if you like their assets.

You don’t have to monitor your bonds. The ETF will do that for you.

Funds buy and sell bonds based on risk tolerance and the fund’s stated objectives.

ETFs provide a passive approach to bond investing. You can contribute any amount you desire and automatically reinvest the proceeds.

Stay up to Date With Finances

Learning how to invest in bonds only represents the beginning of your journey. Strong financial habits will give you more proceeds to invest in vital assets.

Mastering your finances early in life helps with retirement in the future. Your savings will compound as you earn and save more money.

Staying on top of the best news and tricks will help with your goals. Our magazine provides expert commentary and articles to help you master your money. Read through our issues today.