APAC marketing manager Darren Thang observes that some businesses in APAC are already enjoying the rewards of embedding finance experiences and creating amazing moments that matter for their customers. The harsh reality is that brands, including incumbents, that do not keep up will be left behind.
Consumer behaviour drives everything - we want frictionless, fun experiences, not finance. When you walk past, or see your ideal car in the ads, you dream of owning it, not buying a car loan. At the end of the day, consumers want an amazing car buying experience. Taking up a loan is just a means to an end of owning one's dream car - it just happens to have a loan embedded.
Even for much smaller, daily habitual consumption, consumers just want to enjoy their coffee, get a taxi from the comfort of their home, or office, and not have to queue and pay. We believe that if possible, paying should happen in the background, unseen.
The recent COVID pandemic has permanently altered how consumers consume all products and services. The pandemic has accelerated many companies' digital transformation journey, implementing digital solutions quickly and at times haphazardly to fulfil the sudden demand of digital consumptions.
However, that does not mean that consumers are no longer keen on “experiencing” the best possible form of customer experience - in fact, consumers expect more from brands as digital promises efficiency, productivity and an overall optimisation of customer journey. There is one commonality for all consumers when they consume products and services - that is finance. As such, embedded finance is strategic - embedded finance is a key strategic element within immersive consumer experiences that deliver boosted daily engagement, increased revenue opportunities and highly insightful behavioural data.
There are progressive brands in the APAC region that have responded which shows that any company (be it fintech, sports club, music venue, or retailer) can upgrade and harness the power of embedded finance. Here are some examples:
Example 1: Carro
Singapore automotive marketplace Carro, which became a unicorn in 2021, launched a subscription-based car service. Consumers pay a flat monthly fee, avoiding the usual sales hassles and enjoying the new-found convenience of owning a car.
Unlike car owners in Singapore, who typically own one particular car for a ten-year period, Carro customers now have the flexibility of switching plans based on their needs, as well as returning the car at any time. The monthly fee is inclusive of all costs associated with car ownership, including insurance, road tax and maintenance costs.
At the end of the subscription, customers can return the car with no questions asked.
Carro started out as a used car marketplace, but has since embraced embedded finance - expanding its business model to include financing, insurance, and roadside assistance. By providing a richer finance experience for their customers, it was reported unsurprisingly that by 2017, 70% of the Carro’s revenue came from its embedded (auto) finance services.
Example 2: Singlife with Aviva
Following Singlife’s acquisition of Aviva Singapore and subsequent combination of the businesses, it has launched its new brand, known as Singlife with Aviva. The SG$3.2 billion merger was one of the largest insurance deals in Southeast Asia.
A Singapore fintech insurer turned incumbent, Singlife with Aviva offers customers a better way to financial freedom. It leverages the best of Singlife’s insurtech capabilities and Aviva Singapore’s 40-year track record of providing insurance and investment solutions, advisory capabilities and strong customer base, to help consumers achieve financial freedom.
Its mission is to help consumers gain control of their financial wellbeing at every stage of their lives. It has a comprehensive suite of solutions such as Life, Health and General insurance and is one of the largest providers of Employee Benefits insurance. It also offers investment solutions, including mutual funds and unit trusts, through its dollarDEX and Navigator platforms.
With Railsbank, there is the Singlife Account – with the Singlife Debit Card – Singlife with Aviva’s customers get to enjoy a richer customer experience as they are allowed to save, spend, earn and be insured, all through the Singlife app.
Example 3: Grab
Singapore-headquartered Grab, which started out in the ride-hailing business, has expanded its business operations to become a “superapp”, including delivery and digital financial services in more than 400 cities across eight countries in South-East Asia.
An example of how Grab used embedded finance experience to create amazing moments for their drivers - Grab drivers between the ages of 18 and 75 may now pay as little as 10 cents a trip to buy critical illness coverage under a new micro-insurance plan. With each trip, drivers can accumulate up to S$200,000 in coverage over a 360-day period. The sum assured will depend on the drivers’ age and gender.
For example, a male driver between 41 and 45 years old who completes 10 trips a day and pays a micro premium of 10 cents a trip will accumulate the maximum sum of S$200,000 in coverage after 91 days. His total premium will be S$455.
Drivers will stay protected by the accumulated coverage over the 360 days on a rolling basis, even if they choose to take a break from driving. There is no minimum trip per day to qualify for the plan and drivers can choose to work at any time.
Eligible drivers may sign up for the plan through Grab's mobile app. Upon subscribing, the premiums will be automatically deducted from their in-app cash wallet. They may also switch to a different premium amount at any time via the app.
Example 4: Parpera
Parpera, a money management platform for sole traders, freelancers and startup founders, has launched Australia's first embedded finance business experience using a debit card linked directly to deposit accounts, in partnership with Railspay (the Australian arm of Railsbank) and Volt.
The Parpera Business Debit Mastercard card is available to Australian sole traders, who will be able to use the Parpera app and debit card experience to better manage their business payments, make fee-free international transactions and control their spend.
Having to pay on average three to four percent fees on top of international card payments, waiting weeks for a business debit card, and being forced to use their personal card to cover business expenses are all examples of how business owners needlessly suffer.
Parpera transforms the banking and invoicing experience for thousands of Australian businesses by saving them time and money, and improving the way they manage their finances.
Embedded Finance Experiences - delivered seamlessly
As observed, there are increasingly progressive fintechs and brands that are realising the importance of embedded finance. To keep up with the competition, it is of paramount importance to work with a partner, or
platform, that is designed to help companies learn, prototype, launch and scale embedded finance experiences, whether a start-up, scale-up, brand, or well established company. As a world-leading embedded finance experience platform, we are a new approach for any company (for example, fintech, sports club, retailer, brand) wishing to harness the power of embedded finance experiences for consumer engagement, rewards, data and revenue.
Finance capabilities, such as digital wallets, payments, rewards, loyalty points, or cards, are simple for us to create and combine into an embedded finance experience that integrates directly and seamlessly into your brand and digital journey.
Clunky finance white labels and co-branded solutions are a thing of the past. We respect that customer journey is of utmost importance, which is why we provide powerful APIs that keep us behind the scenes and hero of the digital journey.
Connect with our APAC team as we are excited to partner with brands to co-create amazing embedded finance experiences that strengthen your customer relationships and create amazing moments that matter - as our next big step in delivering category-defining products and partnerships into the APAC region.