SEA Fintech Leaders Weigh In on the Future of Embedded Finance & Why It’s Here to Stay

Written by
Alvin Ip
Last Modified on
March 28, 2024

From the Singapore Fintech Festival 2021 to CS-EY Fintech Day, this week proved to be one of the biggest weeks in fintech in Southeast Asia!

At this year’s edition of Wild Digital SEA 2021, our very own Aspire CEO Andrea Baronchelli had the opportunity to join a panel discussion alongside some of SEA’s leading fintech game-changers, Spenmo Co-Founder and CEO Mohandass Kalaichelvan, and MoneyLion Co-Founder and CTO Chee Mun Foong.

This piece will explore how far we’ve come from traditional financial services and why embedded finance will shape the future of the industry as we know it today.

What is embedded finance?

Depending on their business model, the infrastructure of embedded finance enables companies and platforms to offer a plethora of financial services ranging from payments to lending and investments.

What sets embedded finance apart from traditional financial services is how it allows consumers to perform transactions within their own ecosystems, eliminating the need for third-party providers or lenders.

By bridging the gap between a company and its consumer, it essentially streamlines financial processes for the better.

Most of us may be unaware of just how prevalent embedded finance already is in our daily lives. Take ride-hailing apps like Grab or GoJek, for instance. Instead of paying in cash or swiping your card at the end of your ride, transactions can be completed within the app automatically.

Now that we know how seamless the concept of embedded finance has seeped into our lifestyles, here’s why it’s here for good.

Why embedded finance is here to stay, according to industry experts

Automation will remain

While embedded finance has been around for quite some time now, there’s no denying that the pandemic has accelerated the digital adoption of financial services even further.

In today’s day and age, business owners are actively looking for software to make their workforce more productive and workflows more efficient.

In a post-covid world, it will be hard to bring back manual paperwork when you can send something with just a click of a button. From expense management to automated bill pay, it’s clear that automated solutions will remain as the new default.

“Software doesn’t make mistakes and doesn’t take leaves.” — Mohandass Kalaichelvan, Co-Founder & CEO at Spenmo

Financial inclusion in underserved sectors

In countries where access to basic financial services are limited, the underserved segments in the market will only continue to suffer.

However, alternative options being offered by some of the fintech companies are proving to be a gamechanger for many as they champion financial inclusion.

In countries like the Philippines, there is a high barrier to entry into financial services. To open a bank account, it sometimes requires multiple physical documents, credit history, and hefty fees just to apply.

Spenmo Co-Founder & CEO Mohandass Kalaichelvan referenced the Philippine branchless banking service Gcash, and how it paved the way for more Filipinos in the country to be banked. What started as a virtual wallet to facilitate safe and easy transfers has now become a way for locals to be insured and gain access to credit readily.

There is no one-size-fits-all solution in finance. Instead of sticking to traditional methods, we should aim for universal access to financial services that can be achieved through embedded finance.

Innovation is embraced

When it comes to fintech, the sky's the limit. But with traditional financial service providers, that isn’t always the case. Innovation is always only taken with a pinch of salt and rarely at the forefront. With fintech, it is in their DNA.

In the panel discussion, Andrea emphasised how banks look at software as a channel and not a company.

From a consumer perspective, there is a lot of expertise in the business sense that doesn’t capture the complexity of software and what it means.

“Software isn’t something you buy; it’s something you build every day. That is the key piece that’s allowing fintechs to grow.” — Andrea Baronchelli, Co-Founder & CEO at Aspire

This ceaseless drive to innovate in order to serve your customers better will certainly sustain fintechs in the years to come.

The future of the financial services industry is now

From streamlining transactions to solve customers’ pain points to increased profit for companies and business owners, embedded finance is proving to be a win-win situation from all fronts.

Do you think embedded finance is revolutionising the financial services industry? Share your thoughts with us!

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About the author
Alvin Ip
is a finance leader. He masters business strategy, fund raising, business intelligence, corporate finance and scaling finance teams for growth. He has been a CFO & CEO for multiple businesses and has worked with brands like Varde Patners, PwC Singapore, EY France & more. In his free time, he shares his experience & expertise to help businesses learn and grow.
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