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When it comes to building new capabilities, many neobanks are adopting a build rather than a buy strategy that is more appropriate for incumbents. Incumbents spend more time thinking about and developing mobile products, and are more pocketed, especially in times when VC funding is tight.
An increasingly popular buy option, embedded finance leverages APIs to quickly and seamlessly embed functionality into apps and websites. Prevents branding and her UI from being compromised and gives the platform owner full control over her UX and user data. Built-in finance is much faster and less risky than build options as all you have to worry about is the API integration.
When it comes to app functionality, the most successful digital native fintechs are: Revolute When square, is already working headlong to become a “super app” that can perform transactions and services that end users may need. Neobanks that do not pursue a super-app strategy are using embedded APIs as the fastest, least risky option to get there, risking their long-term survival.
Ivan Mariashin is the co-founder and CEO of Monitoris an embedded finance startup that automates back-office accounting for small businesses. An entrepreneur by nature, Maryasin launched her first marketing consultancy firm at the age of 16 and co-founded Monite after seeing first-hand the pain points small businesses face financially. .
Monite was founded to respond to two secular trends that are currently in full transition. The first is the shift from the traditional “build” development model to a “buy” model. When fintech first emerged, there was no existing model, template, or platform to start from. Everything was new and had to be built from scratch. It was exciting, but it was also slow, expensive and dangerous. It is no longer true. Software and infrastructure as a service and built-in API-based financial tools are as good or better than anything you might develop on your own today. And the transition to the buying model is so cheap and quick that it’s easy to buy.
The second trend is moving towards more advanced features. Neobanks and other fintech start-up service providers naturally initially focused on a single polar star product to create a core audience and brand identity. For example, as you can see with Revolut and Square, the current focus is on expanding the service to become a ‘super app’. After gaining user trust in one area, users are busy leveraging that trust to drive adoption of new features. .
absolutely. We help customers such as B2B platforms, marketplaces, neo-banks, and vertical SaaS providers to purchase and deliver high-end financial automation capabilities to their customers, embed them into their existing products quickly and economically, and become supers. I found a way for app.
It happened by chance. I was working on an API product that deployed what was called infrastructure as code on AWS. This is where code automates the configuration of low-level infrastructure components such as databases, load balancers, and cloud services, rather than manually handling each one individually. I also realized that the same approach could be taken for the financial component and high-level business logic.
With Monite, customers can specify and automate any process.
We specialize in financial automation stacks for businesses that were until recently in the stone age. Businesses have had to use a variety of specialized and often cumbersome software to perform basic financial transactions such as invoicing, accounts payable, expenses, pre-accounting and cash flow analysis.
By innovating infrastructure as code with this stack, we have created universal business logic components that can be deployed in different data centers in different countries around the world. Instead of developing your own software functionality, you simply write scripts that are executed by the server, and those scripts coordinate the behavior of the business logic components.
One of the interesting things Monite is doing with embedded finance is moving away from functionality and focusing on workflow and the work to be done. So the old saying when talking about these things is to give the customer a payment API for her website. We are currently talking to a customer about building a Cash-to-Order workflow. How are we doing now and how can we help with automation?
Let me give you an example. A large SMB may have different approval policies and workflows related to different invoices. So, if the invoice from the marketing department is less than 500, it will be paid immediately. However, if the invoice exceeds 500, it must be approved by the Head of Marketing, and if it exceeds 10,000, it must be approved by his CFO.
So I have a workflow that needs to be applied to invoices. Monite allows customers to specify and automate any process. If you want to access the billing engine, your data must be stored in Germany. For example, it should be stored for 5 years. Each invoice over 10,000 must be approved by his CFO, and anything under 100 is paid automatically. They create scenarios like this and our service does it automatically.
Monite’s alternative is to build it in-house or buy a white label. In-house means redeploying an existing team from what they are currently doing or hiring a team from scratch. It’s a 6-9 month project for a well-funded company compared to 3-4 weeks for Monite.
In-house, there is also the risk of the end product being mediocre, but Monite covers dozens of potential applications, including upsell factoring, loans, and invoice finance, to give you an idea of what you’ll get before you start. You can check in related workflows.
White label really isn’t optimal. I need to use a 3rd party interface to add the logo, it’s not embedded and doesn’t fit his UX or branding other than the logo.
Embedded finance means getting exactly what your end customers want, where they want it. Whether it’s a scheduling app for a barber shop or a neobank business account, customers using these different platforms all have different needs. An embedded system means that all these needs can be addressed individually. We are enabling these platforms to offer completely new added value to our customers.
Yes, focusing on the area of the market in which we operate (SMB financial stack), the increasing digitization means that our target users will have more and more access to all kinds of sector-specific services. means We’re not just thinking about fintech products here, but a wide range of digital platforms aimed at serving that market.
Clearly, the SMB space is not monolithic. It is divided into countless subsectors. The challenge and opportunity for fintech is to demonstrate relevance to these subsectors. Here you can see Monite’s built-in financials come to the rescue in several ways. First, it enables organizations that already have a foothold and credibility in a particular field, but no fintech capabilities, to offer financial automation tools to their customers and users virtually immediately. Alternatively, it enables fintechs with no established domain expertise or reputation to develop highly tailored products tailored to the needs of one or more target segments.
In many ways, we are at the very beginning of this embedded financial revolution. For example, consider financial documents and processes. With so many people still working with PDFs and emails, this is a manual nightmare. You can save a lot of time. E-invoicing is available in some markets but is still in its very early stages today.
I envision a future where automation completely eliminates many of these tasks that people need to spend time on today. And this is good! People want to be decision makers, they want to be involved in certain business activities. These manual tasks can and should be wiped out so you can focus on more important tasks.
Fintech today is like trying to move London. If you want to move from one area to another, you may have to walk, then take the bus, then the subway. Buy a paper ticket with coins and wait for the connection. Alternatively, you can pay a hefty fee and take a taxi directly. We have a vision of the future of business where people take that direct route, cheap and easy.
