Digital disruption has arrived in corporate banking – and embedded finance is leading the way. While corporates represent one of the most profitable segments in banking, they’ve consistently applied a light touch when it comes to investing in innovation. As a result, manual processes and disconnected systems continue to stymie workflows, commerce, and relationships. </p> Today, corporate clients demand the same innovation and intuitive experiences from their banking partners as they enjoy in their daily lives. And they’re looking to create digital ecosystems that deliver interconnected services. These new services cut across products and existing services to address many of the client’s needs into one integrated experience.</p> Embedded finance—which integrates a bank’s services directly into the applications that their clients use—is rapidly moving up the list of requirements that corporate clients want their bankers to offer. As an example of the impact on one segment, Accenture research estimates that embedded banking for SMEs could capture around a quarter of the SME banking market by 2025, that’s nearly $124 billion up for grabs.</p> Five reasons to deliver embedded finance</strong></p> Embedded finance has the power to transform corporate banking relationships and operations by:</p> 1.</strong> Delivering seamless services across the customer journey: Although banks struggle to deliver the highly personalised advice and offers that clients expect today, corporate clients are often saddled with fragmented banking systems and frustrating experiences. With embedded finance, banks have an opportunity to leverage historical and real time transaction insights to power highly connected journeys and unique offerings that strengthen client relationships. </p> 2.</strong> Powering faster, intelligent payments: The convenience of everyday real time experiences leads corporates to expect banks to process payments and close their transactions faster. But the reality is that most banks still process payments in batches, which makes it difficult for corporations to get a real-time view. Further, the bank often lacks the analytics capabilities required to rapidly determine the root cause of issues.</p> 3.</strong> Improving liquidity management with real-time treasury: Corporates maintain multiple, often dozens, of bank accounts, which results in high operational and reconciliation costs. In addition, resulting liquidity fragmentation leads to ineffective working capital management and presents cash forecasting challenges. Embedded finance enables corporates to understand the risk on their balance sheet and helps position banks to better manage risk for their customers. </p> 4.</strong> Driving growth with AI-driven insights: Banks are taking the opportunity to leverage the data that powers embedded finance and apply unique data monetisation and AI techniques to cross-sell other banking services beyond treasury. The insights from the use of these services helps banks provide new forms of value to their corporates’ business, leads to more satisfied clients, and equips bank to embrace new business models.</p> 5.</strong> Enhancing operational efficiency: Delivering in-channel banking experiences can dramatically improve operational efficiency for the bank and operational staff. It can reduce errors, eliminate the need for routine status reports, eliminate the need to manually monitor usage, and enable real-time services.</p> In a recent example, to help organisations address time consuming and labour-intensive accounts payable processes, HSBC unveiled a solution that embeds banking services into a cloud enterprise resource planning (ERP) system. The system improves profitability by making it easier and faster to process invoices and pay vendors. As a result, customers can better control outgoing cash flows and easily scale end-to-end AP processes.</p> Embedded finance empowers banks to strengthen their value proposition by helping corporates succeed at every stage of the financial lifecycle, from securing and optimising capital to facilitating trade, which can result in a profitable collaboration for years to come. Now is the time to embrace embedded finance</a> and start a renaissance in corporate banking innovation.</p>