FTT Embedded Finance & Super Apps
We gathered our growing North American community for FTT Embedded Finance & Super Apps live and in person in San Francisco on December 1st. It was wonderful to meet past attendees and new delegates face to face having discussed embedded finance virtually over the past few years.
We are grateful to our partners at Marqeta, Finastra, SAP Fioneer, Amdocs, Netspend and Brim for helping us build great content and assembling such a strong community to dig deep into how embedded finance and super apps are developing across the continent.
There was a lot of content across the two stages. Whilst we can’t share every nugget of wisdom from our stellar line up of speakers and delegates, we wanted to recap some key observations from the event.
Scale of the Opportunity
We are just at the beginning when it comes to how embedded finance has already and will continue to change how consumers and businesses access financial services. It is not just about payments, although payments are incredibly important and valuable. Lending, wealth management, tapping into creator communities and trade finance are just some of the areas that we explored.
Kevin Issadore Head of Business Development, Marqeta and Benjamin Pimentel, Technology Journalist helped set the scene for the day as they discussed the hard work of being invisible. They also defined what embedded finance is – the distribution of financial products and services through non-financial providers.
Simplicity and a great customer experience involves hard work and great partners. And as was discussed across the day, the whole is only as good as the sum of the parts. Collaboration requires trust and great (read reliable) technology.
It was also exciting to hear about the new business models emerging – Cars as a Service was a great example. Georg Bauer, Co-Founder & President, Autonomy presented a compelling vision of the intersection of mobility, financing, and car insurance. Greater access and flexibility, as well as supporting greater adoption of electric vehicles, are all features of a new model for car transport.
The technology matters
Across the day, the topics of technology and trust were revisited frequently. Jeff Manghillis, Lead Client Partner, Banking-as-a-Service, Finastra led a panel to dig deep into the technologies that make embedded finance a reality. Matthieu Soulé, Head of BNP Paribas C.Lab Americas, BNP Paribas, Nikhil Batheja, Head of API Architecture and Strategy, Corporate and Investment Bank, JP Morgan, Leonardo Felisberto, Global Head of Business Development, SellersFunding and Jeff Grobaski, Founder and CEO, Epic River joined him to discuss how Banking as a Service and the best in APIs enable all sorts of distributors to offer financial services to their end-users/communities.
Brands of all types have to opportunity to leverage the trust and loyalty of their customers but the technology (of course) needs to work efficiently and securely so as not to damage that trust and customer bond. Trust is hard to build but easy to break in the eyes of customers. As Nikhil Batheja noted, JP Morgan has a strategy of following those customer eyeballs.
Education of new ecosystem partners
Embedded finance may be something of a buzzword but it is taking hold quickly across the industry. As we sat down with established providers, technology innovators and ambitious start-ups, it became clear that we are only in the early days of educating distributors across many sectors.
If speaking to retailers or ecommerce platforms (for example) there is a need to be clear in communicating the value of delivering financial products to their end users. I had a chance to discuss just that with Tamara Romanek, Head of Partnerships at Plaid, Atif Siddiqi, CEO and Founder of Branch and Rohan Thompson, Director, Sales, at Marqeta. They brought to life to the power of partnerships that enable non-financial brands to deliver greater value to end users, which translates into improved customer retention. The Uber Pro Card, which offers quicker payments and fuel rewards for drivers is a great example.
Regulation is coming
Regulation may lag innovation but eventually it responds. I had a great panel with me to discuss what lies ahead for the ecosystem. Julapa Jagtiani, Senior Economic Advisor and Economist at the Federal Reserve Bank of Philadelphia, Marc Rehberger, SVP, Senior Managing Director, Head of Tech Enabled Banking, Customers Bank, Carla Carriveau, Chief Legal Officer, CoinList and Steven Boms, Founder and President, Allon Advocacy talked us through some of the important initiatives on the horizon.
Expect to see crypto and BNPL drawing increased regulatory attention. Given the macroeconomic environment, the complexity of some new products and currencies and the ease of access to borrowing, customer protection will be an important focus.
In a world of embedded financial products, it is crucial that end users understand what they are buying and who they go to when things go wrong. As the panellists’ noted, responsibility and compliance cannot be outsourced.
BNPL Challenges
BNPL was, unsurprisingly, discussed across a number of panels throughout the day. Beyond regulatory initiatives, Bradley Leimer, Executive Director, Head of Fintech Partnerships, SMBC Group led a fascinating discussion of BNPL with Akita Somani, SVP, BNPL/ POS Lending at U.S. Bank, Oded Shoshany, General Manager – Financial Services, Global Division at Amdocs and Craig Focardi, Principal Analyst with Celent.
They noted some of the indicators of who is using BNPL and discussed the potential harm to customers who find themselves laden with unsustainable debt. In short, if you offer BNPL to customers, you need to think carefully about how the products are constructed. Customers too need to fully understand the risks and potential penalties/late fees.
Customer expectations
There is no putting the genie back in the bottle, customers want easy access to the products and services they need, where and when they choose. Some friction may be necessary when it comes to certain financial products, but simplicity and speed is the key to onboarding and retaining customers.
The is as true in the B2B space as it is for individual consumers. Unlocking the power of data in B2B embedded finance can provide contextualised and hyper-personalized services at the point of sale and point of purchase. A panel led by Vishal Shah, Head of Embedded Finance, SAP Fioneer with Marc Rehberger, SVP, Senior Managing Director, Head of Tech Enabled Banking, Customers Bank, Paul Przybylski, Managing Director, Global Head of Product Strategy and Morgan Money, J.P. Morgan and Galen Grady, Senior Director of Financial Operations and Support, TripActions spoke to the central role that data plays both in the technology and the insight that drives the success of embedded finance.
Understanding your customers and the needs of their clients creates the ability to deliver on the promise of contextualized financial products and services. Taking into a consideration what a company such as Tripactions, for example, knows and understands about corporate travel and expenses, means that they can use that data to develop even better and tailored products and services.
Bring on the drinks
Following a full day of content and networking (with top notch coffee provided by Brim), we ended the day with more conversations and a lively drinks reception (thank you Netspend). Nothing can replace the ideas that come from meeting, in person, and sharing views and knowledge. Catch a glimpse of the excitement by having a look through the highlights video and mark your calendars for 2023. We will be in NYC for the East Coast edition on June 20th and back in San Francisco on December 7th.
