Key Products

Embedded Finance

Integrate complementary products and services that drive conversion and unlock new revenue streams – seamlessly within customer’s own digital channels.

Key Executives

Irfan Khan, CEO & Founder

Irfan Khan led large-scale digital transformation projects for a Tier 1 bank and grew frustrated by the slow implementation and lack of impact on the end-user. Irfan then founded a B2C fintech with a unique, innovative product, yet experienced difficulty in go-to-market without the resources of other players.

As CEO of a leading global bank, Arsalaan Ahmed understood the pain-points associated with innovating financial services, the societal need for the industry to do so, and wanted to improve the financial well-being of financial services end-users.

Arsalaan Ahmed, Founder

Ahmed is an International banker experienced across Europe, GCC and South East Asia. From Analyst to Chief Executive innovating and championing change that delivers progress for an industry and communities it serves. Ahmed is skilled in Corporate Banking and Retail Banking. He is a leader in Debt Capital Markets / Sukuk that involved many World First deals including overseeing the World First ‘United Nations Sustainable Development Goals’ Sukuk used by HSBC Amanah. He is a pioneer and industry leader in banking for Value-Based Intermediation (Value Based Banking); adapting banking practices for greater social and environmental impact.

He received a Master of Business Administration (MBA) from London Business School executive program; Masters in Economics, Finance and Management from The University Bristol; and Bachelors Degree in Information Management from University College London. He received Islamic Finance industry acknowledgement through The Asset AAA 2018 award for Islamic Banker of the year for the industry.

Corporate Responsibility

ESG and Embedded Finance

Environmental, social and governance (ESG) practices are not only good for the planet and people, but make good business sense. They look at the ways in which embedded finance can propel a business’ ESG framework. Environmental, social and governance (ESG) practices are becoming more prevalent within financial services and in society more widely. The majority of consumers want to put their money into businesses that are (at the very least) not causing harm and two-thirds are willing to pay a premium to deal with sustainable businesses. ESG is an increasing priority across generations, and it is beneficial to business, as well as society, to create an ESG strategy.

Following Innovate Finance’s forum, Fintech as a Force for Good, at mmob they have been thinking about the links between their sector of embedded finance and ESG. Many fintechs are leading with value propositions designed to have positive impacts, and existing businesses and financial services should follow suit to compete.

Environmental factors

The impacts of the modern world on the environment are of a growing concern for consumers and businesses alike. ESG investment funds increased by 2.5 times in 2021 and with the rise of ‘greenwashing’ criticisms, it is important for businesses to demonstrate true commitment to improving the environment.

One of the biggest ways individuals and businesses can influence environmental behavior is by choosing where to put their money. Environmental impact is the most easily measured of the ESG criteria with CO2 levels being the core metric. Products such as Cogo’s carbon managers use open banking to determine the carbon impact of individuals’ or businesses’ spending. Embedding carbon tracker products within the user journey before the point-of-purchase could lead to more deliberate consumer spending, rather than off-setting carbon-heavy purchases.

An additional layer of embedded finance would be the inclusion of environmentally positive financial products. For example, users can select investments or pension products that align to their values and do not support damaging industries, or switch to a green energy supplier within an embedded journey. Placing the environmental status of a financial product at the forefront of the user journey allows users to choose services that align to their own values, as well as ensuring businesses are transparent about their environmental actions.

Social factors

Financial exclusion is a problem being tackled by a select number of fintechs and financial institutions but is an issue that should be tackled by the industry as a whole. 14.2 million adults in the UK have low financial resilience, meaning they do not have the means to cope with unexpected costs due to low savings or limited insurance, which has increased 30% as a result of the pandemic and is estimated to grow further during the current cost-of-living crisis. Financial processes often mean groups with less are paying more to use the same services, such as the 4.2 million people paying more to use prepaid energy meters or turning to unregulated credit services. With the rise of digital-only banking, financial exclusion is increasingly parallel to digital exclusion, and an estimated 29% of the UK population use cash for budgeting despite the decline of the cash economy. Conventional financial processes are failing a number of underrepresented groups and while areas of the industry are working towards solutions, it is the responsibility of all financial services to improve financial access and well-being.

Embedded finance, through the use of technology and data-sharing such as open banking, has the opportunity to improve access to financial products. The current credit score system excludes a lot of individuals from accessing fair loans due to historical data and incomplete pictures of individuals’ finances. A ‘poverty of data’ is made from consumers using cash which is less easily tracked, meaning loan eligibility criteria is not met. 70% of lenders are expected to use open banking data by 2023 to determine a borrower’s eligibility based on more accurate views of their spending, eliminating the dependency on the credit score system. The integration of products such as BNPL has opened credit options to a younger, more digitally savvy audience that traditional credit providers would not have approved.

Embedded finance is a great opportunity to support under- or unbanked populations through delivering financial products on channels they already use. As non-financial businesses begin to adopt embedded finance, users can access financial products through the channels of businesses they know and trust, rather than banks where there may be a distrust based on previous exclusion.

Governance factors

Innovate Finance’s Janine Hirt kicked off Fintech as a Force for Good forum with a summary of the key talking points for the day. Janine described governance as essentially about trust, with the 2021 Edelman Trust Barometer finding over half the population believe traditional authority figures (government and business leaders) purposefully mislead through misinformation. However, businesses were deemed the only trusted institution (ahead of government, media and NGOs ranked as neutral) and so businesses need to ensure strong governance to maintain users’ trust, particularly with regards to sustainable practices.

Embedded finance provides businesses with the opportunity to increase user trust, stickiness and retention through the integration of services designed for them. 54% of consumers trust at least one tech company more than banks, while only 33% name their bank as their most trusted financial services brand, compared to 37% naming a fintech firm. Embedded finance is a tool to drive consumer trust, for both fintechs and non-financial businesses using the current momentum and banks looking to restore their previous position.

Tackling the challenges associated with sustainability, financial inclusion and competent governance within financial services is no mean feat, but embedded finance enables businesses to improve their ESG criteria through better user relationships. From integrating environmentally positive services to overhauling the credit score system using open banking, new financial technology is leading the way towards a more sustainable, inclusive system. As Shanika Amarasekara summarized, think long term and act shorter.