“Fintechs are increasingly competing with traditional banks in their core business,” was the headline in Handelsblatt 2021. Since then, the situation has become even more acute: Klarna, for example, which has had its own banking licence since 2017, has been offering its customers a free current account in addition to various instalment payment options in e-commerce since February 2021.
Other neo-banks and wallet providers are also increasingly becoming real competition for the old economy. So what can banks do to counter this multi-layered threat? The fintech axytos sees itself as a symbiotic partner of the banks and, with its further development of embedded finance, brings the financial power of the bank precisely back into the digital customer financial lifecycle.
Danger recognised, danger averted
Embedded finance refers to financial products and services that are directly integrated into offers and processes by companies outside the traditional banking world. This means that banks are losing important interfaces to their customers in B2C and B2B – e.g. in the environment of manufacturers, online retailers and at the point of sale, says axytos CEO Christoph Ruoff: “Banks are losing the business relationship with their traditional customers, because if a provider already offers the buyer a partial payment or an instalment purchase at the time of purchase, then the buyers no longer need a loan from the bank. And this is exactly where axytos helps and provides banks with the entire infrastructure in the form of (partial) products or as a technical service. The cooperation with axytos is therefore the optimal way for banks to sustainably avert the threat described above.
axytos CEO Christoph Ruoff: “With axytos embedded finance, the bank repositions its financing offering at the digital customer interfaces and thus recaptures lost market share in B2C and B2B.”Embedded finance rethought
With axytos embedded finance, banks are able to recapture lost market share. Banks can quickly return to their traditional stage with advanced payment and financing offerings delivered as embedded services via the axytos platform as a white label. And with the unique opportunity to reach new customer segments and develop new use cases. Ruoff adds: “axytos enables banks to prevent a further decline in the lending business and to regain market share and the customer interface. With axytos embedded finance, the bank repositions its financing offer at the digital customer interfaces. For the bank’s corporate customers benefit from increased sales and turnover through end-customer-oriented financing solutions for them and their customers. Consumers benefit from a smart customer-centric shopping experience with maximum convenience.”
The thing with the data
With the loss of the customer relationship, the bank also loses an important source of information for evaluating customers and assessing risks. In the area of KYC (Know your Customer), axytos embedded finance provides a remedy: Intelligent algorithms and information systems ensure, among other things, that the bank receives information about which buyer is suitable for a credit line, for example. This makes the risk controllable. axytos CEO Christoph Ruoff emphasises another aspect: “Among the technological developments in risk management mentioned above is the ability of the axytos platform to break down very small transactions into parts in a way that makes business sense, so that they can be placed as partial or instalment payments.
In this way, axytos embedded finance compensates for the strategic disadvantage of the bank, as their legacy systems cannot economically map this type of micro-credits. We are currently having many extremely exciting discussions with well-known institutions that would like to use axytos embedded finance for their existing customers and traders, as they have recognised the immense advantages and opportunities.”
You would like to talk directly to the axytos experts about axytos embedded finance: https://www.axytos.com/en/contact/