The launch of FTT Embedded Finance North America on September 1st 2021, was an insightful day of content, discussions and disruptive virtual event. Our growing community of retailers, financial institutions, fintechs and tech companies from across North America (and beyond) came together to discuss best practice and strategies and to look ahead to future innovation in embedding financial services outside financial institutions.
The day kicked off on the Strategy Stage, with a fireside chat with Jason Gardner, CEO at Marqeta and Simon Torrance, CEO at Embedded Finance & Super App Strategies and Executive Working Group Member at World Economic Forum. They discussed what the emergence of embedded finance looks like for financial service providers and non-financial businesses. Jason highlighted his “pay it forward” journey to exploring how MCIs are driving embedded finance.
In the first solo presentation of the day, Simon Torrance did a great job of complementing the opening session by sharing the commercial point of view of the industry, reviewing the scale of the opportunity for embedded finance in the North American market. Covering payments, lending, banking, insurance, wealth management and loyalty, as well as defining the practical benefits for what he likes to call “the embedders” – Retailers, manufacturers, telcos, techcos, banks, insurers and governments.
One of the main reasons embedded finance has such great potential (predicted to reach a market cap of $7.2 trillion globally by 2030) is through delivering a more user-friendly experience, reducing friction, lowering costs and, overall, enhancing customer experience.
The first panel discussion, moderated by Bradley Leimer, Co-Founder of Unconventional Ventures discussed some of the big questions in embedded finance. Panellists Marcelo Dubiel, Senior Product Manager at SkipTheDishes and Zilvinas Bareisis, Head of Retail Banking at Celent shared their points of view on the meaning of embedding finance outside of financial institutions, different ways in which embedded banking boosts product innovation. This included an overview on the competitive landscape and who is best positioned to win the consumer.
Clearly, technology plays a key role as an enabler to embed financial services in non-financial enterprises products and services. The main enablers for embedded finance are APIs and BaaS, but it is crucial to understand how these technologies can improve the way businesses integrate frictionless financial services into their products.
Daniel David, Director of Product Management at Wells Fargo, Sohaib Zahid, CEO and Co-Founder at Railz.ai, Jayson Callies, Chief Information and Innovation Officer at Seattle Bank, Ami Iceman-Haueter, AVP of Research and Digital Experience at MSU Federal Credit Union and Matthew Kelly, SVP Digital & Automation at Northern Trust Asset Management gave an overview of the latest technologies behind the veil of banking: Cloud, open architecture, APIs and automation for BaaS. The panellists also explored how API banking can enable a collaborative approach between FinTech and FIs and how big data can enhance personalization of product offering.
Given that data is one of the greatest assets for companies when it comes to offering personalized products, , Michael Haney, Head of Digital Core at Technisys explored how financial institutions are also combining third-party capabilities with analytics capabilities and models to distribute differentiated financial products at scale with greater efficiency, and all of the associated benefits.
Providing seamless experiences is one of the primary objectives and priorities of non-financial institutions when embedding financial services to their products. Melanie Hardin, Innovation Principal at Verizon and Mary Wisniewski, Banking Editor and FinTech Features Reporter at Bankrate.com explored some of the best practice and lessons learned in that area, whilst considering new revenue opportunities from embedded fintech.
Since there is a huge surge of opportunity in the industry, achieving a sustainable future for embedded finance, joining forces with regulators to protect business and consumers should be one of the top priorities. Jeanette Quick, Head of Compliance & Public Policy at Gusto, Jason Wang, Chief Risk Officer at Synergy Credit Union, Julian Alcazar, Senior Payment Specialist at Federal Reserve Board and Steven Boms, Founder and President at Allon Advocacy LLC reviewed the current regulatory framework and its potential impact.
Another important crucial factor to consider is how embedded finance is improving users wellbeing and making sure that continues to do so in the long-term. Theodora Lau, Founder at Unconventional Ventures explored different industry practices that have helped to improve financial inclusion.
The Opportunity Stage reviewed the different challenges and opportunities of the verticals within embedded finance, such as payments, lending, insurance, wealth management or social media.
As discussed across the day, approaches to integrate payments into a seamless commerce stream is one of the key priorities. Kothai Senthil, Vice President Head of Payments at Albertsons, David Tax, Senior Manager, Payments Strategy & Innovation at TD Bank, Matteo Gamba, Product Lead Payments at Wayfair, Manash Bhattacharjee, Head of Product, eCommerce at PepsiCo and Glen Sarvady, Managing Principal at 154 Advisors discussed their experience on how to strategically embed payments into different products and utilising CRM to enhance CX in embedded payments.
In the wake of COVID-19, it’s clear that consumers have become a lot more active with online shopping. Because of this, one of the trends boosted during the pandemic has been Buy now, pay later (BNPL), increasing the presence of products that have end-to-end credit integrated within e-commerce platforms.
Julapa Jagtiani, Senior Economic Advisor and Economist at Federal Reserve Bank of Philadelphia, Shishir Singhania, Chief Lending Officer at Varo Bank and Dion Lisle, Managing Partner at Forty Grand explored embedded lending as a customer-centric, inclusive lending practice. They also discussed BNPL lending models that are disrupting the industry and examined how data analytics can be employed to assess credit risk and accelerate loan approval processes.
Similarly, the pandemic has also facilitated the rise of embedded insurance: Offering merchants the possibility to integrate solutions within their products that enhance customer stickiness and improve the overall customer experience.
Bruce Buttles, Director Digital Channels at Humana, Matthieu Soule, Head of BNP Paribas C. Lab Americas, Andrew Rear, Chairman at Buckle, Andrew Jernigan, CEO at Insured Nomads and Elisabeth Laett, Managing Partner at The Holt Xchange discussed what means leveraging data can enhance personalized CX and boost customer retention along with how insurers can transform by adopting SaaS business models to Insurance as a Service.
Another embedded finance growing trend is based around wealth management. Embedded wealth management offers users the possibility of investing their money more freely that traditional banks, also using data for product offering personalization that, again, offers a better CX.
Adam Green, CEO and Co-Founder at YieldX, Julie Coin, President at DriveWealth and Peter Fishman, Fintech Consultant and Board Member at Quatromoney debated strategies to improve customer retention and engagement through embedded investment, as well as the most successful products in the area. Finally, they inspected disruptive tools to achieve a frictionless account opening, funding, trading, and portfolio management.
Crypto has been another important trend that is increasingly earning more attention since industry disruptors are making digital currencies more accessible for the everyday consumer. Will Reeves, CEO and Co-Founder at Fold and Kevin Doerr, Chief Product Officer at Marqeta discussed how embedded finance has played a part.
Due to the WFH policies and flexibility from COVID-19, the creator economy has seen a significant increase, with an overwhelming number of creators, and many view this as an opportunity to earn some extra cash. Ashish Arya, Global Head of Vertical Strategy and Marketing at Pinterest and Kevin Dinino, President at KCD PR explored the new trends and insights that emerged during the pandemic, how to utilize social media for financial services products & services, and what’s next for the creator economy.
If you missed anything on the day, keep an eye on our website, where all content will be made available on demand very soon. We already have the date for next year’s North American edition (September 21st, 2022) and look forward to continuing to grow this exciting and disruptive community. If you are interested in the UK and European markets, check FTT Embedded Finance UK & Europe which will run alongside the Fintech Talents Festival on the 15 & 16 November at the Brewery in London
Written by Flora Pleguezuelos, Product & Content Manager, VC Innovations