Change. Every sector faces it, but in the financial world, the ace is relentless. As if staying ahead wasn’t challenging enough, the era of digital banking transformation for traditional banks is dawning, and it heralds the age of Embedded Finance. For Chief Technological Officers (CTOs) & Chief Investment Officers (CIOs), this isn’t just another buzzword – it’s a seismic shift with its own set of headaches.

Kelvin Tan, CEO & Chief Dreamer of audax Financial Technology (previously Managing Director & Global Head of Standard Chartered nexus), hits the nail on the head: “Embedded finance is already giving the more forward-looking banks access to new revenue streams and to previously unbanked customers. People need to understand exactly how big an opportunity it is and get a move on. The first five to scale in this will corner the market.”

But we get it; transitioning isn’t easy. So, let’s break it down.

The Evolution of the Embedded Finance Proposition: Embedded finance was initially about straightforward, transaction-based services. But now? It’s evolved into an opportunity for digital banking transformation for traditional banks. We’re talking about DeFi, Web 3.0, and the benefits of partnering with fintech companies for comprehensive banking solutions. It can be daunting, but the upside is a redefined relationship banking and a closing of historical service gaps.

Embedded Finance Distribution is Verticalising: As the world of Software-as-a-Service (SaaS) undergoes change, so must embedded finance. With specialised platforms becoming data goldmines, this could be where a cloud-native banking platform for fintechs and banks shines. Platforms are already predicting lending trends. For traditional banks wondering, “How can Banking-as-a-Service (BaaS) help traditional banks offer more innovative financial products?” – the answer lies in embracing this shift or risk obsolescence.

Banks are Getting More Active: Higher interest rates might seem like a good thing, but they’re a double-edged sword. While boosting margins for some, they’re giving fintechs a competitive edge. By being able to have all your digital banking capabilities in a single platform, Kelvin suggests that this is a “land-grab moment.” Fortune is on the side of the bold, no matter the size of the institution. So for banks feeling overwhelmed, we’re here, equipped with white-label digital banking solutions & next-gen tech tools for you.

The Importance of Regulation Cannot be Overlooked: Let’s face it, regulations can be a migraine in the making. From keeping pace with open banking changes to the growing pressure on embedded finance platforms to streamline consumer interactions, it’s a tightrope walk. And with the marriage of technology and regulation (hello, cybersecurity!), the challenges amplify. Here’s a thought: What if regulations were machine-readable? It’s not a distant dream but a necessary evolution.

Embedded finance isn’t the future – it’s the here and now. And while it’s filled with its share of hurdles, it’s also ripe with opportunity. At audax, we’re not just bystanders; we’re in the trenches with you. Let’s navigate this evolving landscape together, empowering you to scale and modernise at speed with our digital banking capabilities, so that you can focus on your business.

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If you’re navigating the tumultuous waters of embedded finance now, we’ve got your back. Curious about what audax the only live full stack digital banking platform that has delivered BaaS in Asia, brings to the table? Take a tour here.

Or prefer a genuine chat about the challenges? We’re always up for a conversation, especially if it means helping you out. You can connect with us by filling up the “Get in touch” form & a member of our team will be in touch with you soon.

Before we conclude, a big shout-out to the team at aperture. They’ve done some fantastic legwork in chatting with the brightest minds in the finance world, distilling their wisdom into the indispensable report that we have taken reference from, “Embedded Finance Predictions: insights into a fast-evolving market.” Keen on diving deeper? Download the full report here.