What bank execs are saying about embedded finance

LONDON — Will embedded finance technology usher in a new era of banking, or is the impact of the technology overblown? Bank executives from ClearBank , Deutsche Bank and Raiffeisen Digital Bank weighed in at FinovateEurope this week. ClearBank Head of Embedded Banking Paul Staples at $3.4 billion ClearBank said that many organizations have embedded banking services in their offerings for multiple reasons including to: Increase customer loyalty; Add a source of revenue; and Build on available offerings. However, some banks are struggling to make these offerings commercially viable, Staples said. “There is very limited data that would suggest that embedded finance drives loyalty,” Staples said. “If you're using this to build a new client-facing proposition for your products, it might take 12 to 36 months for the rollout, despite having a high pool of adopters among your clients.” Rather than embedding banking services for the sake of it, companies and brands need to build these features with a purpose and make sure that they are solving a problem rather than being added features for long-term success, Staples said. Deutsche Bank The $578 billion Duetsche Bank ’s Joris Hensen , founder and co-head of the bank’s API program, said that embedded finance might not be a groundbreaking concept, but it will help in transforming financial services for banks, brands and customers alike. “You suddenly have a new way, a different way to engage with your customer ... [as] it provides personalization and modernization to the customer,” Hensen said. FIs must pick partnerships for embedded finance carefully because consumer data can be at risk through transactions, Hensen said, adding that using APIs to transfer data is one of the best methods available. Raiffeisen Digital Bank Krzysztof Tarach, head of lending at the $224 million Raiffeisen Digital Bank, said that certain segments of embedded finance like lending will stick around because they are main revenue generators for banks and can increase sales for the brand or organization offering embedded finance. Organizations and brands that don’t capitalize on embedded finance will find themselves at a disadvantage over time, Tarach added. “You can stand on one leg and see if you have managed to stand up that one line long enough,” Tarach said. “But if you don't do it, you're taking unnecessary risk of not having a second line of revenue, as simple as that.” Using embedded finance offerings will also become a need over time for organizations and banks alike, Tarach said. Consumer behavior is changing from doing banking in the branches to online banking to mobile banking to the point where “they are no longer interested in using industrial applications,” Tarach said. “It's always about chasing the customer,” Tarach said. “We're looking for the place where the customers actually are [like social media apps and shopping apps] and shortening their [payments and banking] journey.” Join us for Bank Automation Summit U.S. 2024 in Nashville, Tenn., on March 18-19! Discover the latest advancements in AI and automation in banking. Register now.

What bank execs are saying about embedded finance

FinovateEurope 2024

National Bank of Canada prioritizes cost management in Q1

Quantum tech can increase trading speed by 15% to 20%

Related Posts

AI agents need machine-speed money; enter stablecoins

6 banks co-author principles for creating unified agentic commerce infrastructure

PayNearMe acquires Marr Labs, plans AI across payment process

Quantum tech can increase trading speed by 15% to 20%

EMERGING FINTECH DIRECTORY

FinAi Podcast

SPONSORED

Build an Antifragile Strategy to Outperform the Market

How AI and Product Experts Turn Fuzzy Requirements Into Focused Dev-ready Roadmaps

Is Your Technology Supplier There for You?

Connect

Welcome Back!

Retrieve your password

Continue Reading with FinAi News Premium - Less than $2/Day

What bank execs are saying about embedded finance

FinovateEurope 2024

National Bank of Canada prioritizes cost management in Q1

Quantum tech can increase trading speed by 15% to 20%

Related Posts

FinAi Podcast

Connect

Welcome Back!

Retrieve your password

Unlock This Article

Continue Reading with FinAi News Premium - Less than $2/Day