EMBEDDED FINANCE ALLOWS SMES TO BOOST SALES AND SERVICES, SAY EXPERTS

KUALA LUMPUR, Oct 27 -- The progress of financial technology (fintech) particularly in embedded finance is fast becoming a central part of the future economy for small and medium enterprises (SMEs) to boost their sales and services.

Embedded finance allows any company to incorporate banking software directly into their websites or mobile apps within their range of services, without having to redirect users to third-party websites.

As such, buyers do not have to enter their credit card details for their transactions.

According to Telekom Malaysia (M) Bhd vice-president (business innovation) Moharmustaqeem Mohammed, adding financial capabilities such as payment and credit will increase the overall effectiveness of goods and services reaching the end consumer.

“We believe companies are able to participate in distributing not only bundle services but creating a special experience for their end-users,” he said during Securities Commission Malaysia’s (SC) eighth annual SCxSC Fintech Conference today.

Moharmustaqeem, who spoke about “The rise of embedded finance and headless commerce: transforming the digital customer experience” at the virtual event, noted that SMEs are having difficulties moving towards digitalisation and e-commerce business.

“They are basically saying that onboarding to e-commerce business is too technical and difficult and they are not well informed on the tactical steps,” he said.

Meanwhile, Microsoft global digital advisor Scott Bales said embedded finance has improved the traditional banking system with the “buy now pay later” concept being a massive trend for consumers.

“We have seen a lot of non-traditional players extend their services where they can access embedded finance, business activity support, and supply chain within their eco-system,” he said.

Citing Indonesia and Malaysia as examples, Bales said SMEs in these countries are exploring embedded finance to enhance their sales and services.

-- BERNAMA