Embedded Finance. Scarlett Sieber

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Название Embedded Finance
Автор произведения Scarlett Sieber
Жанр Банковское дело
Серия
Издательство Банковское дело
Год выпуска 0
isbn 9781119891062



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      The financial crisis resulted in a significant tightening of consumer credit, with some banks pulling back entirely from lending to consumers and small businesses outside of established channels such as credit cards. Just because banks no longer wanted to lend didn't mean that the needs of consumers and small businesses changed. They still needed to borrow money, but the traditional providers were no longer available.

      As smartphones proliferated in the developed world, feature phones, mobile phones with internet access but lacking the advanced interface of a smartphone, became ubiquitous in the developing world, including the Global South, such as Latin America, Southeast Asia, and Africa. While smartphones allowed consumers in developed nations to avoid the bank branch for everyday issues and to make purchases, feature phones allowed consumers in countries with underdeveloped financial systems and very few bank branches to access financial services for the first time.

      Most consumers, some 70%, in Latin America and Africa are underbanked, meaning they lack access to traditional financial services. The transformation of financial services in countries that had underdeveloped banking infrastructure is far more dramatic than the changes happening in countries with advanced banking systems. Smartphone penetration is also expanding rapidly in the Global South, and with it, so are more sophisticated financial services. Brazil counts 110 million smartphone users, and Indonesia,160 million.

      One thing we can say is that using mobile phones for finance can be tremendously empowering. With a few clicks, users can see balances, pay bills, and send money to friends and relatives.

      While much of the focus has centered around mobile phones, the other component to mobile phone success is mobile internet. Mobile internet access has changed the world forever. Mobile, unlike most previous technology, moved from the consumer sphere to the workplace instead of the other way around. Adoption scaled rapidly, we might even say virally, in the consumer world, forcing companies to adopt policies around bringing these powerful devices into the workplace. When we think about the leading indicators that drive the evolving changes in mobile, they lead back to consumer behavior. This behavior not only drives the consumer but also the business world that interacts with consumers. The consumer has never before been as empowered as they are now, and the way they are consuming cultural products such as books (Kindle), movies (Netflix, Hulu), food (Deliveroo, InstaCart, HelloFresh, JustEatsTakeaway), and music (Spotify, Apple Music) is constantly evolving. This has repercussions across their expectations toward other industries, including financial services, as the lines are now blurred on what specific industry offerings look like as consumers want all experiences to be as simple and easy as the last.

      The internet provides communication and information tools to the majority of humans on Earth. It has toppled governments, upended industries, and changed the way people live. No business is insulated from its effects. As hard as it may be to believe today, when the internet was young, many experts downplayed its effects and ridiculed it as a toy or fad. Those predictions are laughable now, but underestimating the internet has happened again and again, always with the same result. Embedded finance represents another evolution along this arc.