Embedded Finance: Revolution or Just New Lipstick on the Same Old Pig?
The "Revolution" Will Be White-Labeled
Embedded finance, huh? Another day, another tech buzzword promising to "revolutionize" everything. Give me a break. We're talking about sticking financial services—payments, loans, insurance—into apps and platforms people already use. Like it's some kind of groundbreaking idea. Newsflash: companies have been slapping their logos on other people's products for decades. It's called white-labeling, and it ain't exactly rocket science.
So, instead of building their own complicated financial tech, businesses are supposed to "buy" pre-built platforms and brand them as their own. Convenient? Sure. Revolutionary? Get real. It’s the same old game: companies trying to squeeze more money out of customers by making things "seamless" and "convenient." Convenient for whom, exactly? Offcourse, it's convenient for the corporations raking in the dough.
And the security angle? Oh, please. They're trying to scare us with tales of fraud and data breaches, then swoop in with their "robust fraud prevention" and "strong compliance frameworks." As if white-labeling magically makes everything secure. Please. It just means you're trusting a third-party with your sensitive financial data. What could possibly go wrong? Buy, Don’t Build: The Next Wave of Embedded Finance explores this build vs buy decision in more detail.
The B2B Grind Never Stops
Let's be real, the real target here is B2B. Streamlining payments between buyers and suppliers, automating workflows, reducing friction... Sounds great in theory, but what about the small guy getting squeezed by bigger companies demanding faster payments and longer credit terms? Embedded finance is just another tool for corporations to optimize their supply chains and boost their bottom lines.
They keep talking about APIs, cloud computing, and open banking like they're some kind of magical solution. "This shift is not just about convenience—it’s a strategic imperative to reduce costs, accelerate processes and drive revenue growth." Translation: "We're going to automate everything, cut costs, and make more money, even if it means screwing over a few small businesses along the way."
I’m reading about how superapps in Asia and Africa are embedding payments, lending, and insurance directly into their platforms. Okay, that actually sounds kind of interesting. M-Pesa in Kenya enabling merchants to access working capital and users to purchase insurance within a mobile app? That's potentially a game-changer for financial inclusion. But wait, how much are they charging for those "convenient" services? And who's regulating these superapps to make sure they're not exploiting vulnerable users?
The AI Hype Train is Leaving the Station
And here comes the AI hype train. Of course, AI is going to "ultra-charge" embedded finance. Because everything needs AI now, even if it doesn't actually make things better. Real-time processing of payments, enhanced security, hyper-personalized financial services... It all sounds great, but it also sounds like a recipe for algorithmic bias and privacy violations.
Quantix's AI-driven credit scoring enabling lending for gig workers and SMEs who lack traditional credit histories? Sounds good on paper, but I can already see the headlines: "AI Denies Loans to Minority-Owned Businesses Based on Flawed Algorithms."
Plus, "AI-powered fraud detection processes billions of transactions in real-time, identifying anomalies and potential threats faster than legacy banking systems, ensuring safer and more reliable financial interactions." So, what happens when the AI makes a mistake and flags a legitimate transaction as fraudulent? Suddenly, your account is frozen, and you're stuck on hold with customer service for hours trying to sort it out.
Then again, maybe I'm the crazy one here. Maybe embedded finance really is the future. Maybe AI will solve all our problems. Maybe pigs will fly.
So, What's the Catch?
This whole "embedded finance revolution" feels less like a revolution and more like a cleverly disguised way for big companies to get even bigger, and for tech bros to pat themselves on the back for "disrupting" the financial industry. I'm not buying it.
