Embedded Awesome — How Embedded Payments are Changing the Game

In the Hot Seat

From paying for music to morning coffees, embedded transactions power daily life. With Christoffer Malmer we examine where embedded finance can have the biggest strategic impact, how fintechs can build stronger compliance with speed, why banks need to pick up the pace if they want to compete, and how banks and fintech could work with each other.

Key Takeaways.

• [0:00] Denise Johansson puts Christoffer Malmer, Head of SEB Embedded, in the hot seat.
• [2:02] Earning customer trust has always been a brand thing.
• [4:08] While the embedded finance sector is still being defined, having a broad suite of products lets you customise customer solutions.
• [6:09] Finding the product you need is more about properly defining the problem to solve or the outcome desired.
• [7:13] Embedded finance is in the process of knitting banking into our lives in a more natural way.
• [8:28] Development and distribution are two areas in which fintech can play an exciting role.
• [10:40] Compliance doesn’t have to make you slow, but with some fintech having had multiple failures in that regard, it does mean having discussions with potential partners.
• [13:00] Working in partnership with your compliance department will serve your customers, make you more agile, and enable company-wide alignment.
• [14:22] After having changed music, transportation, and online shopping, the next big revolution may yet be financial services themselves!
• [17:02] For banks, the transition has been slow. They need to rethink what products they are providing and how they deliver them.
• [20:25] The future is staggeringly fast. Becoming more agile, learning as you iterate, and having the guts just to start may be the key to future-proof any large organization.
• [23:50] Christoffer shares his last thoughts on the exciting possibilities embedded finance and BaaS offers.
• [24:22] Denise signs out and teases the next episode: female founders in fintech.

People.

• Guest Christoffer Malmer, Head of SEB Embedded, an in-house startup dedicated to commercialising BaaS.
• Host Denise Johansson, co-CEO and co-Founder of Enfuce, a female-founded fintech helping drive business growth, solve customer challenges and extend financial inclusion.

Links.

• Enfuce
• SEB Embedded
• SEBx
• SEB group

Guest Quotes.

• Brands with strong market positions and strong relationships with their customers have earned the trust to say ‘Hey, I'm offering you financial service now, but I'm not a bank.’ — Christoffer Malmer, SEB Embedded, InTheHotSeat
• I see embedded payments as part of a subset of embedded finance. — Christoffer Malmer, SEB Embedded, InTheHotSeat
• Conversations might start somewhere but end up somewhere else. With a broad suite of financial services products at your disposal, you can really tailor the solution that the customer's looking for. — Christoffer Malmer, SEB Embedded, InTheHotSeat
• Shift the conversation from ‘I am buying this particular payment service’ to ‘What am I trying to solve for? What is the user experience I'm trying to get to?’ — Christoffer Malmer, SEB Embedded, InTheHotSeat
• The strategic shift will be that we are used to doing banking on one side and living our lives on the other: I want to buy a house, I need a bank for my mortgage, or I want to buy a car, and I need to find financing. — Christoffer Malmer, SEB Embedded, InTheHotSeat
• If you're building a FinTech, I would invest in compliance to make sure that that's part of your DNA. — Christoffer Malmer, SEB Embedded, InTheHotSeat
• Changes in the new world of finance are happening at an increasing pace and becoming more and more structural and fundamental. — Christoffer Malmer, SEB Embedded, InTheHotSeat
• When the product becomes all digital, it's software. And when you're providing software, you're building and launching software. As you would know @Enfuce, it's a different business, than providing a financial service. — Christoffer Malmer, SEB Embedded, InTheHotSeat
• SEB has been around since 1856 and we have owners that think about the next generation as much as they think about the next quarter. — Christoffer Malmer, SEB Embedded, InTheHotSeat
• We know the work of Clayton Christensen around The Innovator’s Dilemma. How do you create disruptive innovation inside an established, successful organisation? It doesn't come naturally. It requires that bet and a bit of guts. — Christoffer Malmer, SEB Embedded, InTheHotSeat

Denise Quotes.

• There is a transformative nature to embedded payments, the kind we might use to buy a coffee or catch a ride to work. Transactions like these are sometimes referred to as “invisible transactions” and they are essential for brands and merchants. — Denise Johansson, InTheHotSeat
• Banks can’t buy from a provider like @Enfuce, they need to build services in-house. They were building Greenfield and wanted us to consult. We've been following those projects and here we are five years later and they haven't been able to launch. — Denise Johansson, InTheHotSeat
• One thing that the banks almost 100% do right is the compliance piece. And one thing that we have repeatedly seen FinTech failing at is compliance! — Denise Johansson, InTheHotSeat
• You shouldn't see the compliance department as the blocker within the company like ‘Oh! No… here they come again’. You should really partner with them and they should be an integrated part of enabling all the business that you wanna do. — Denise Johansson, InTheHotSeat