Embedded finance is turbocharging brands

Off-the-shelf, white-labelled products and services have historically been a way to achieve this, but they are often as inflexible as a business’ underlying infrastructure. Embedded finance providers allow any business to offer and manage customised solutions – with tools to build solutions quickly without the need to obtain a financial services licence in parallel to the management of their existing products and services.

Two-thirds of chief experience officers (CxOs) in established businesses are looking to expand their existing financial services offerings and/or accelerate new services and products, according to research conducted for Australian embedded finance platform provider Shaype.

Speed to market is key to those businesses looking to build new financial services to strengthen customer relationships, with 91 per cent of CxOs surveyed expecting to be able to launch a new financial services product within 12 months.

“Shaype provides a one-stop-shop solution which allows businesses to provide a range of tailored financial services to their customers within their curated customer journey.”

— Alex Lloyd, Shaype chief brand and marketing officer

Inflexible technology is the biggest frustration for half of them (53 per cent) when considering the available financial services providers. At the same time, 64 per cent are anxious that implementations won’t meet delivery timelines in order to capitalise on new opportunities.

On the front end, embedded finance is all about creating frictionless customer experiences. On the back end, it’s about granting brands much more control over that financial experience.

Shaype’s embedded finance platform offers brands the best of both worlds: the affordability and speed to market of an off-the-shelf solution, combined with the flexibility and control of a bespoke offering, says chief brand and marketing officer Alex Lloyd.

Shaype is Australia’s first cloud-native financial services provider to be approved by regulators. Among its customers is CBA x15venture’s youth payment start-up KIT, for which it built a tailored embedded finance solution in just five months.

Traditionally, non-financial businesses looking to offer financial products would partner with a bank, but then lack access to the main levers of managing and operating that product. The alternative was to build a complex and expensive custom solution from scratch, stitching together multiple single-service providers.

“As you stitch more and more services together, you end up watering down your customer proposition, because not all of those services can facilitate what you need, especially as you scale,” Lloyd says.

“Generally, you end up taking the lowest common denominator across all of those services, which doesn’t help solve customer needs in new and valuable ways.”

Today, businesses looking to build or expand their financial services products want control, flexibility, speed and future-proofing, all while minimising cost of ownership for a better use of working capital and resources.

Modern financial service providers like Shaype offer any business the ability to create and manage customised financial products and services by leveraging a tightly integrated ecosystem, without the need to manage individual relationships with multiple providers or obtain a financial services licence.

“Shaype provides a one-stop-shop solution which allows businesses to provide a range of tailored financial services to their customers within their curated customer journey, rather than jolting them out of that brand’s product experience and handing them across to external platforms,” Lloyd says.

“These kinds of partnerships allow businesses to accelerate their efforts without relying on the limited offerings of legacy services or investing millions in in-house development.”

Through its cloud-native universal API adapter and pure microservices architecture, Shaype enables clients to issue their own branded Visa card as a Visa principal partner. It also enables real-time transfers via Australian payment rails such as the New Payments Platform (NPP), plus it supports onboarding, know your customer (KYC), digital wallets/tokenisation and real-time fraud monitoring and reporting.

As consumers tighten their belts, Lloyd says embedded finance offers businesses the ability to control more of the value chain, provide more seamless and high value experiences, improve retention and increase wallet share.

“Rather than offering a single product, or playing in a single vertical, businesses are seeing the value in growing their financial services – to provide a more well-rounded offering – rather than having their customers go elsewhere to have all of their needs met,” he says.

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