EmFi Fueled by Cloud-based Infrastructure | KPMG Fintech Pulse H1 2022

KPMG | Scott Huie and Craig Thomason | Nov 21, 2022

As digital technologies advance to meet increasingly sophisticated customer expectations, Embedded Finance (EmFi) makes banking capabilities from payments to offers for credit available through more access points. Retailers, platforms and B2B Corporates can embed financial services in a much wider range of consumer and commercial settings.

• Embedded finance – like so many other digital banking innovations – relies on contemporary core banking technologies.
• Multiple use cases now demand such change: new core technology will sustain innovation such as predictive balance recognition, delayed payments authorization, contextual behavior modeling used to deliver compelling point of sale offers and real time banking services that are either event driven or predictive in their nature.

See:  McKinsey: Embedded Finance – Who Will Capture the Value? Risk vs Reward

• Also other drivers for a shift to cloud-native, consumption-based platforms:
  • to leverage the elasticity of the cloud to allow banks to meet demand, test new value propositions, and to iterate faster with reduced upfront capital investment;
  • to drive faster speed to market for products and partners by leveraging an API-first core;
  • to enable better and faster access to data for insights on customers and other analytics
  • to improve transaction processing speeds that are required for modern digital commerce use cases in e-commerce, platforms and account to account services.
• We expect additional enhancements that allow banking to be vertically embedded into experiences and processes, many of which are hard to predict. They will likely include ‘mash up’ experiences of banking within non-banking experiences – models to be built upon and improved.

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KPMG:  Top Fintech Trends in H1 2022

1. Valuations continuing to adjust as cost of capital increases
2. M&A will increase as corporates and PE firms look for bargains
3. Interest in cybersecurity automation will keep growing
4. B2B solutions will become more attractive to investors
5. Fintechs will continue to focus on data-driven solutions
6. Crypto and blockchain investments will increasingly focus on infrastructure

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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