Embedded Finance: The Key to Open the Door to Super Apps

Anna Catherine   /    Content Specialist    /    2022-01-28

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Four to five apps on our smartphone’s quick menu dictate our lives. Whether you want to order food, hail a cab, or catch up on the latest news, you don’t have to get past your homescreen. Soon, you won’t have to go beyond one app. 

The era of super apps is here — companies are striving to build a juggernaut that will serve as the single point of access to our digital lives.  An app that has all in one, and is the one in all smartphones. 

This is not an easy proposition. For a super app to take over, say, the home screen of android users, it would have to wipe out or subsume 3.48 million other apps. Clearly, creating one platform that offers a full ecosystem of services for an entire population is no mean feat. 

However, it’s already a reality in large parts of the eastern world — China and Southeast Asia — where apps like WeChat, Grab, and Alipay rule the roost. For instance, WeChat, initially an instant messaging app, is now so deeply integrated into Chinese lives, that its 1.2 billion monthly active users and its payment arm’s 800 million active users, together, contributed to commerce worth $240 billion via a host of mini apps within it. This is enormous, and it certainly sounds formidable. 

So, what transformed WeChat from being China’s alternative to Facebook Messenger to the behemoth it is today? Payments! The defining factor was when they added in a digital wallet. It offered QR codes to add a transactional element, which transformed its messaging community to active consumers of a host of services on the platform. This is only natural; a digital marketplace needs digital payment options,  This is only natural; a digital marketplace needs digital payment options, else you will be making bricks without straws.  

Whether you are originally a ride-hailing app (as Grab used to be) or a food-delivery app — the journey to super apps needs a layer of financial services to be able to offer customers an end-to-end digital journey. Ultimately, payments and financing form the base of commerce and interactions that drive business.

Financial services have increasingly become a feature of non-financial platforms as companies seek to build retention and boost customer lifetime value. Along the way they enable companies to gain insights into consumer behavior in a deep and real-time way. If you want to create optimal value, offer unique products and services, and acquire treasured data on spends, then embedded finance is the way to go. 

Want to build a Thor-like super app? Embedded finance is your hammer. 

Once an enterprise (app) acquires scale and a stable customer base, the next step, naturally, would be to look for other ways to deepen and monetize its customer relationships. Before enterprises turn to allied businesses to expand their offerings, it’s important to layer financial services into product offerings for three reasons. 

One, every product offering, no matter how it is bundled, will remain fragmented without payment options. 

Two, consumer preferences have changed considerably and they expect flexible payment options. 

Three, embedded finance generates a treasure trove of data on consumer behavior which enables personalization, thereby, driving performance and improving customer outcomes. Research suggests that companies that grow faster derive 40% more of their revenue from personalization than their slower-growing counterparts.

Embed finance to punch above your weight

For a modern consumer, if it’s not easy to pay, or easy to get credit, then the app is not super, it’s lousy. All said and done, the most attractive feature of any product or service is affordability. Capabilities to offer hyper-personalized financing combined with instant disbursal is a dream come true for every super-app builder vying for higher revenues and velvet-smooth user journeys. 

However, providing banking products requires deep expertise to manage regulatory, legal, and compliance matters. It demands significant technology investments and specialized skills to operate services at scale. The cost for most businesses to offer financial services to their customers will be high, should they decide to develop the capabilities in-house.

This is why a partnership with a fintech player is key and is bound to be the pivot of your journey to super apps. For instance, at FinBox, we have the capability to do both, onboard a financial service provider and at the same time bring together the entire stack — from credit risk assessment to disbursement to compliance and portfolio tracking, all in one low code platform.

We are a digital credit infrastructure provider with the ability to link branded financial services to the super app. Our proprietary intelligence engine is built on billions of data points and 16 million new-to-credit profiles. This deep learning-driven decision-making ensures that borrowers receive the credit they need, when they need it, and on terms that work for all parties involved. Also, our dynamic and customizable backend and UX help drive conversions across various partners. We build our modular architecture adhering to the highest standards of data privacy and other compliance requirements. In addition, our cloud-native API infrastructure is built to minimize the cost of operations with a pay-as-you-go model.

With FinBox, you can power your products with in-context credit offerings through a simple, yet powerful integration. You can go live with our collection of customizable SDKs and APIs within a week.