Episode 246: Milan Fintech Summit Special: Let’s Talk Embedded Finance!

Embedded finance is reshaping the financial services landscape, integrating banking functionalities directly into non-financial platforms. This innovation allows businesses to offer comprehensive financial services without the need to build traditional banking infrastructures from scratch. The transformative potential of embedded finance was explored in a recent episode of Breaking Banks Europe, featuring interviews with prominent industry leaders.

In a standout episode of Breaking Banks Europe, Matteo Rizzi interviewed Paolo Zaccardi , CEO of Fabrick , and Nicolas Benady , CEO of Swan , to delve into the impact of embedded finance. Their discussion offered valuable insights into how this sector is evolving and how their respective companies are contributing to the transformation.

Swan provides a Banking-as-a-Service (BaaS) platform that allows businesses to integrate banking and payment functionalities directly into their own applications through APIs. This integration includes services such as card issuance, account management, and payment processing, enabling companies to offer financial services seamlessly without needing extensive banking infrastructure.

Fabrick operates as an open financial ecosystem, connecting banks, fintech startups, and non-financial businesses. Their platform offers a range of services, including the "pay by link" feature, which simplifies invoice payments and automatic reconciliation. This service is adaptable to both large enterprises and small businesses, highlighting the versatility and scalability of embedded finance solutions.

The Entrepreneurial Edge in Fintech

Benady and Zaccardi discussed the current landscape for fintech entrepreneurs. They agreed that embedded finance has significantly lowered the barriers to entry for new businesses. Developers with innovative ideas can now leverage platforms like Swan and Fabrick to build and launch financial services with minimal upfront investment.

Benady emphasized Swan’s mission to simplify the integration of financial services through its user-friendly API platform. This ease of access represents a significant shift from the challenges faced by fintech startups a decade ago when substantial resources were required to enter the market.

Zaccardi highlighted the shift from merely launching fintech ventures to focusing on long-term sustainability. While raising funds may have been easier in recent years, the emphasis is now on creating viable and enduring businesses. Effective integration, collaboration, and partnership are essential for thriving in today’s competitive fintech landscape.

Fintech Groove: Wamo and the SME Focus

In a special five-minute segment created for the Milan Fintech Summit 2024, Matteo Castelnuovo interviewed Deniz Güven 顧海 , Executive Board Member of wamo , to discuss the challenges and opportunities facing small and medium-sized enterprises (SMEs) in the financial sector. This segment was designed to promote the upcoming summit and shed light on the practical aspects of fintech for SMEs.

Wamo, a UK-based fintech, provides tailored banking services aimed at addressing the specific needs of SMEs. Güven highlighted several pain points that SMEs face, including lengthy account opening processes and difficulties accessing credit. Traditional banks can take weeks to process applications, which hinders businesses that need to start operations quickly. Wamo addresses this by offering a streamlined application process, allowing businesses to open accounts and access banking services in minutes.

Güven also discussed the importance of personalization in fintech services. Wamo’s approach is to provide customized solutions for each business, recognizing that every company has unique needs. This contrasts with traditional banks, which often segment customers based on revenue, potentially neglecting smaller or newer businesses.

Another significant challenge for SMEs is obtaining credit. Güven pointed out that traditional credit assessment methods can be restrictive for smaller businesses. Wamo is working on innovative solutions that use alternative data points to assess creditworthiness, making it easier for SMEs to access the funding they need.

The Human Element in Fintech

A recurring theme in the discussions with Benady, Zaccardi, and Güven was the balance between technology and human interaction. Despite the advancements in AI and data analytics, maintaining a human touch remains crucial. Güven highlighted that Wamo ensures every new customer receives a personal call during the account opening process, which fosters trust and satisfaction.

Benady and Zaccardi also stressed that while technology can drive efficiency and automation, it should complement rather than replace personal interactions. Providing high-quality service with a human touch enhances customer experience and ensures that fintech solutions remain grounded in real-world needs.

The insights from the Breaking Banks Europe episode and the Milan Fintech Summit special segment underscore the transformative impact of embedded finance on the financial industry. Platforms like Swan and Fabrick are leading the charge by providing innovative solutions that integrate financial services seamlessly into various applications. For fintech entrepreneurs, this represents a golden opportunity to innovate and build sustainable businesses with lower barriers to entry.

As the industry continues to evolve, the collaboration between fintech startups and traditional financial institutions will be key to driving further innovation. The combination of advanced technology and personalized service will shape the future of finance, creating solutions that address the diverse needs of businesses and consumers alike.

Join the Milan Fintech Summit: https://www.milanfintechsummit.com/

?? Watch the full episode here: https://youtu.be/jjI_Sff2V2A

Nicolas Benady: https://www.dhirubhai.net/in/nicolasbenady

Nicolas Benady is the co-founder of swan.io , a fintech platform that provides APIs for embedded banking. Under his leadership, swan.io empowers businesses to integrate banking services seamlessly, offering solutions like accounts and payments. Benady’s vision drives innovation, making advanced financial services more accessible and efficient.

Paolo Zaccardi: https://www.dhirubhai.net/in/paolozaccardi

Paolo Zaccardi is the CEO and co-founder of Fabrick, a fintech platform that bridges banks and fintechs through APIs. Fabrick’s ecosystem streamlines financial operations, fostering innovation and connectivity in the industry. Zaccardi's leadership enhances collaboration, driving forward the future of financial technology and services.

Denis Güven is an Executive Board Member at Wamo, a UK-based fintech firm specializing in tailored banking services for SMEs. With extensive experience in global banking, Güven leads Wamo’s efforts to simplify financial services, focusing on personalized solutions and innovative credit assessment methods to support small and medium-sized businesses.