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15 Aug 2022

6 areas of innovation that are crying out for embedded finance

Wherever money flows through digital platforms, embedded finance can be the game-changer. Once plugged in, embedded finance can speed up payments, automate processes and streamline the user experience. It’s a powerful cost saver and revenue generator. The only limit is the imagination of the innovator building the solution.

From managing employee expenses and supplier payments to making property and freelancer marketplaces more convenient to use, there are plenty of sectors crying out for answers to longstanding and complex pain points. For founders building digital products to meet that demand, embedded finance will be a key part of the solution.

1. Accounting and expense management

There are plenty of SaaS tools out there for expense management, but making the payments at the end of a process still typically means going outside of the software and logging in to a bank. And when employee expenses aren’t so much a single invoice as frequent collections of receipts for ad hoc purchases, managing those reimbursements is a time-draining chore.

What if the expense management platform could not only make it easier for people to file an expense claim but also make the resulting payment automatically once approved? Or imagine if the package gave companies the power to issue cards to employees to make pre-approved purchases for training, travel or research, all nicely connected up for ease of reconciliation.

With an embedded finance solution like our Employee Finance Plug-in, these payment capabilities can be easily embedded into an expense-management platform or any similar solution. Businesses can also issue physical or virtual cards to make “as and when” expenses more convenient for employees, as well as locking funds to specific merchants or services to prevent misuse.

2. Back-office solutions

No matter where you sit in a supply chain, dealing with your invoices coming in and out to suppliers and customers quickly piles up to a mountain of financial admin. Not to mention the impact of delays and pain of chasing payments that could force businesses to need loans to plug a cash flow shortfall. 

These challenges shouldn’t be an obstacle to business growth, however, not with the solutions that embedded finance makes possible – the kind of solution you might already be building.

Our Supplier Finance Plug-in can supercharge back-office software with automated reconciliation of funds against invoice and funding, the ability to set budgets and controls for specific purposes, and the means to safely on-board and off-board suppliers. 

This makes back-office processes smoother and drives the opportunity for error or fraud out of the system. But beyond this, it also opens up entirely new blue-sky innovation, as you can see with Troc Circle.

Troc Circle are using open-netting technology to launch a solution that is due to reduce invoice processing costs by 80% – and make everything ten times faster. Beyond speed, though, it solves a very expensive problem. 

Experts say that trillions of pounds are trapped in ‘payment circles’ caused by inefficient global supply chains. Troc Circle have created an algorithm that can identify every payment locked in one of these payment circles and net out every party’s owed amount. They’re making a seriously complex problem simple to solve.

3. Real estate

When we’re so used to digital convenience, real estate can feel pretty archaic by comparison. Marketplaces might make finding property easier, but for rental properties getting tenants through the door still involves agencies taking holding deposits, third parties conducting credit checks and landlords receiving rent. With so many points of contact to clear, it’s a breeding ground for friction.

For innovators building the next leap forward in real estate, embedded finance plug-ins can help them bring property and payments under one roof. What if, by assigning dedicated accounts to individual properties, payments could be centralised within one platform? That would make it easier for landlords to track ingoing and outgoing payments, and far more convenient for tenants who just want to pay their rent and move in.

4. Employee benefits

In a digital hybrid world, employee engagement is critical and businesses have to offer more to attract the best talent from around the world. But it’s not just about the perks and benefits on offer, it’s also how they’re delivered. 

How easy are benefits for employees to take advantage of? And how annoying is the admin that comes with it all? Does submitting an invoice for your gym membership sound familiar? If you are or were an employee, it’s unlikely that your employer used a platform that gave you control over the benefits you wanted while removing the need for paperwork to prove you’d made a payment. But such solutions are out there.

Our Employee Finance Plug-in means innovators can create seamless solutions for employers that they can roll out to their teams, even under their own brand. Employees can have easy access to the benefits they’ve earned without the hassle of navigating third-party sites or redeeming offer codes, while platforms can offer businesses a fully tailored digital solution that boosts satisfaction and retention.

Of course, this is what companies are already beginning to achieve with embedded finance in employee benefits. What if you combined your own business’ value proposition with embedded finance to create a one-stop-shop for the future of work? Just take a look at the great work that ThanksBen are doing. 

5. The gig economy

The heart of the gig economy is freedom. Freelancers choose that lifestyle because they want the freedom to do what they love and when they want to do it. In theory that freedom should extend to deciding how, when and in what currency they get paid, but building in that flexibility from scratch is often beyond the means for freelancer marketplaces.

And it’s not just about freelancers getting paid. Finance management is a steep learning curve when you’re new to the gig economy, with plenty of pitfalls like taking international payments and declaring income correctly.

Our Worker Finance Plug-in has been designed to overcome these challenges. With an easy way to implement card modes, bank accounts and currency controls, marketplaces can give freelancers the tools they need to set themselves up safely and earn a secure income. 

MONET, for instance, set up a platform which fills the gap between work completed and work paid for, advancing earnings to creators so the status-quo stress of chasing invoices is taken off their shoulders. But of course, all this happens in an invisible, frictionless, automated way behind the scenes, using the Weavr Worker Finance Plug-in.

What if you used embedded finance to give them the power to get paid how they want, when they want – and even manage payments to subcontractors? You’d be giving freelancers back their freedom and helping fulfil the promise of the gig economy. 

6. Logistics

Finance plays a huge role in keeping international supply chains going. From managing shipping insurance and cross-border payments to keeping track of all that money, it’s a complex sequence that easily gets bogged down by all the manual steps along the way.

There are plenty of software tools out there for warehouse, order and freight management, but finance needs to be plugged into that to make logistics truly efficient. By moving away from monthly invoices and towards automated payment flows and reconciliation, embedded finance can power faster, cheaper and smoother international payments.

For rapidly scaling companies, this can result in a serious cost saving. With cash flowing faster and automated processes, the business won’t need to expand their back-office team at the same rate as their operations. Also, when the company expands into a new region, many of the same automated processes can be carried directly over, or recalibrated, without needing to dramatically reorganise the business. 

Embedded finance can also add flexibility. With connected payment flows, it makes purchases easier to insure and lend against. What if companies could see how long it takes for an asset to become cash and make strategic decisions on this basis? They could even offer automated payment discounts if an invoice is paid in quick time.

Interested in embedding finance into an application? To learn more about how Weavr’s Plug-and-Play Financial plug-ins can help, download our guide: embedded finance made easy.

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