Embedded Finance in B2B—The Hidden Power of the Decade
In the fallout of the global financial crisis, incorporating new features like embedded finance have exploded on the scene and has been a catalyst for fintech innovation.
Embedded finance is not about companies that offer financial services as their core business, but rather, involves “embedding” or inserting financial services to enhance the other products and services that are central to their brand. The conventional uses for embedded finance have typically emphasized B2C over B2B.
Embedded finance is a home run for B2C—so why not consider applications for B2B?
Powerhouses like Apple and Shopify have utilized embedded finance for B2C. Apple launched a form of mobile payment called Apple Card which acts as the driver for Apple Pay and comes with a host of rewards just like any other card. Unlike other cards, however, this digital version has greater potential to tap into new revenue streams, reduce cart abandonment rates with greater engagement, and improve consumer retention rates over all.
While most of these innovations are geared towards the B2C audience, embedded finance has the capabilities to switch hit and target the untapped B2B market with just as much success.
Based on the prosperity of B2C embedded finance it only makes sense to consider the potential for B2B and businesses should not wait until the next crisis to test out some of these innovative applications.
Embedded finance refers to embedding payments, lending, insurance and all sorts of banking capabilities—all of which are scalable at the B2B level for those willing to adapt.
The typical process for the embedded finance providers involves mapping these features on top of pre-existing offerings. HUBUC believes in switching to inherently integrating financial services into the product.
Let’s use Accounting SaaS as an example.
HUBUC can help Accounting SaaS to perfect its offering by automating end-client’s payouts to all sorts of suppliers without any application switch. With embedded IBANs (international bank accounts), HUBUC enables smooth cash flow for small, medium and large companies thus providing Accounting SaaS with a great competitive advantage on the market.
Embedded finance initiatives are about proactively solving problems instead of waiting for them to arise which is a necessary mindset for businesses coming out of such an incredibly unpredictable year.
HUBUC counsels businesses on how to reap the benefits of embedded finance for their customers. Benefits include offering auto-reconciliation for improved security as well as saving time, adding multi-purpose cards, the ability to expand operations to other regions, and improved customer processes with immediate access to payment confirmations.
If that holds true for B2C, then the opportunities to create lasting business relationships built on B2B SaaS services must also be explored.
The benefits of B2B offer a bright outlook for its future
It may not be the dominant model just yet, but there are other competitive companies already enjoying the benefits of applying embedded finance features at the B2B level.
These businesses are able to leverage the instant gratification afforded by financial services providers like HUBUC to offer their customers with integrated solutions at the point of need or before—therefore any business not doing this practice will inevitably fall behind.
With convenient embedded finance options businesses are not encumbered by cash flow problems that have plagued supply chains over the last year which is a major advantage to not have to worry about.
Businesses certainly know the value of being able to provide services to their customers without disruptions to their operations, but what they may not know is that embedded finance adds even further value by avoiding traditional bank expenses, costly fees, and inconvenient transfer delays.
Time saved from simplified financial processes and communication also allows companies to spend energy innovating other areas of business.
Investors have already shown their confidence in the future of embedded B2B finance by investing hundreds of millions of dollars in the newer applications for fintech—let HUBUC instill the same confidence by partnering with your business to tailor your own B2B solutions.