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Top Embedded Finance Companies for SMBs in 2023

Lee Cocking
Post by Lee Cocking
March 23, 2023
Top Embedded Finance Companies for SMBs in 2023

Embedded finance has rapidly moved beyond being just another buzzword in the realm of financial technology (fintech) to a significant influencer of the industry's trajectory. Its influence is visible in the heightened transition to digital transactions, which was further accelerated by the pandemic. Presently, consumers demand nothing short of a streamlined, integrated experience when interacting with businesses. Responding to this demand, embedded finance—financial services woven into non-financial platforms—brings to the table a transformative potential that can significantly boost revenue, customer engagement, and loyalty.

In a recent comprehensive survey conducted by Capterra, a staggering 94% of businesses leveraging embedded finance reported an increase in revenue. This highlights the immense growth potential embedded finance presents, especially for small and midsize businesses (SMBs). By incorporating elements of embedded finance such as buy now, pay later options or e-wallet integration, these businesses can reap substantial benefits. It's noteworthy that a minuscule 14% of business leaders in the U.S have expressed no plans to invest in embedded finance in the coming year.

That said, charting a course through the intricacies of embedded finance can be challenging. Given the vast array of embedded finance technologies available, deciding on the optimal time to incorporate this software and the motivations for doing so can be daunting. To aid businesses in staying a step ahead, we have compiled an extensive list of key trends and leading companies to consider for embedded finance in 2023.

Pioneering Embedded Finance Companies

Cybrid: We pride ourselves on being a leading provider of embedded finance solutions. Our offerings span the gamut from technical integration to bank partnerships and regulatory compliance, all meticulously designed to help businesses launch their crypto initiatives quickly and efficiently.

In an era where cryptocurrency continues to command mainstream acceptance, we understand the importance of having a trusted partner that can navigate its complexities. That's why we provide businesses with the necessary tools and support to easily explore this burgeoning field. As a result, we're increasingly becoming a preferred choice for businesses that aim to offer innovative financial products to their customers.

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What truly sets us apart is our ability to provide a seamless and integrated end-to-end experience. This includes FBO bank accounts for USD and CAD, allowing our clients to circumvent the hassle and expense of costly integrations. At Cybrid, we aim to simplify the complexities of embedded finance, making it a viable option for all businesses.

Stripe: An entity with a presence in the fintech industry, Stripe offers a selection of embedded finance products, such as an on- and off-ramp API with banking. Their services present businesses with a basic capability to handle payments and manage some aspects of their finances.

Plaid: Plaid offers a range of embedded finance solutions with a primary focus on providing a secure connection between businesses and consumers' bank accounts. Their technology aims to simplify the process for businesses to offer embedded payments and other finance products.

Zerohash: An entity in the embedded crypto infrastructure space, offers a way for companies to integrate digital assets. They too, like Cybrid, have MSB licenses with FinCEN and FINTRAC. However, they mainly focus on providing an adequate platform for businesses interested in integrating digital assets.

Finicity: Finicity is involved in providing real-time financial data access and insights. They endeavor to create a way for businesses to connect to consumers' financial data securely, aiding them to offer improved financial services. They provide an entry point for businesses into the world of embedded finance.

Marqeta: An entity with a global modern card issuing platform, is attempting to redefine how businesses interact with financial products. Their open API provides a pathway for businesses to manage payment programs and credit card processing. They provide a modest foundation for businesses to integrate financing and payment solutions into their service offerings.

Walnut Insurance: Walnut Insurance offers a variety of insurance products to businesses. Their technology is designed to facilitate the integration of these products into existing platforms, allowing businesses to implement and manage embedded insurance solutions.

Embedded Finance Trends to Monitor in 2023

Accelerated Adoption and Revenue:

As we look to the future, we're expecting more businesses than ever to leverage embedded finance solutions. This shift isn't just about staying competitive - it's also leading to impressive revenue growth. With a variety of embedded finance products available, companies are finding it easier than ever to offer personalized experiences that drive customer loyalty and increase average spend.

Consumer Centricity:

The key to the success of embedded finance is its focus on the consumer. It's not just about making transactions more convenient - it's about creating an entirely new user experience. With the integration of embedded finance, companies can offer a seamless shopping experience, providing customers with instant access to financial services, right at the point of need. This can range from simple payment options to more complex financial services such as insurance and loans. Going into 2023, we expect to see a rise in the number of businesses integrating embedded payments and consumer-oriented products like buy now, pay later financing.

Readiness for Economic Downturn:

The recent pandemic has shown us the importance of preparedness for unexpected economic shifts. During times of recession, the robustness of a business's financial services becomes increasingly critical. Interestingly, 87% of businesses have expressed they'd be more likely to utilize embedded finance during economic downturns. This presents an opportunity for embedded finance to play an essential role in businesses' strategies for weathering financial storms.

Varied Implementation Strategies:

As more businesses see the benefits of embedded finance, the question becomes not if they should offer these solutions, but how. Some businesses prefer to partner with third-party providers for quick and hassle-free integration. On the other hand, some businesses choose to build or buy embedded finance solutions themselves, looking to maintain greater control over their customer data and experiences. This trend reflects the diversity of needs in the market, emphasizing that there's no one-size-fits-all solution.

Increased Regulatory Oversight:

As embedded finance solutions continue to grow in popularity and reach, they are increasingly coming under the purview of regulatory bodies. Recent cases involving the U.S. Securities and Exchange Commission (SEC) and major cryptocurrency entities such as XRP and Coinbase are setting precedents that are likely to influence the future regulatory landscape.

These cases serve to illustrate the need for clearer regulation and may catalyze the process for more defined guidelines around the operation and governance of embedded finance and cryptocurrency transactions. With the SEC's involvement, businesses and consumers alike can expect more clarity and direction in how these services should be conducted responsibly and within the framework of the law.

Furthermore, potential legislative actions by the U.S. Congress and Senate are on the horizon, and they are likely to provide even more regulatory clarity in the near future. These efforts will help shape the strategies and offerings of businesses looking to invest in embedded finance.

As this regulation landscape evolves, it's crucial for businesses to stay current with the latest changes and ensure they're prioritizing their customers' best interests while also complying with the legal requirements. This forthcoming clarity in regulations is likely to make the path forward less uncertain, enabling businesses to confidently innovate and grow within the realm of embedded finance.

To conclude, embedded finance presents itself as an invaluable tool for businesses aiming to enhance revenue, customer engagement, and loyalty in 2023. By considering these leading trends and companies, businesses can successfully navigate the complex landscape of embedded finance and implement solutions that best address their needs.

Lee Cocking
Post by Lee Cocking
March 23, 2023
Lee Cocking, the accomplished Head of Product at Cybrid, is a highly-regarded expert in product management and a driving force in the blockchain industry. With his extensive experience and deep understanding of blockchain technology, Lee provides thought leadership and guidance that shape the development of Cybrid's innovative product offerings. In addition to his wealth of product management knowledge, Lee shares valuable insights on the evolving landscape of blockchain and its potential to revolutionize various industries. His expertise and passion for the technology help to ensure that Cybrid remains at the forefront of the market, delivering cutting-edge solutions that address the unique needs of clients in the ever-changing world of digital assets.