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6 areas of innovation that are crying out for embedded finance

Wherever money flows through digital platforms, embedded finance can be the game-changer. Once plugged in, embedded finance can speed up payments, automate processes and streamline the user experience. It’s a powerful cost saver and revenue generator. The only limit is the imagination of the innovator building the solution.

From managing employee expenses and supplier payments to making property and freelancer marketplaces more convenient to use, there are plenty of sectors crying out for answers to longstanding and complex pain points. For founders building digital products to meet that demand, embedded finance will be a key part of the solution.

1. Accounting and expense management

There are plenty of SaaS tools out there for expense management, but making the payments at the end of a process still typically means going outside of the software and logging in to a bank. And when employee expenses aren’t so much a single invoice as frequent collections of receipts for ad hoc purchases, managing those reimbursements is a time-draining chore.

What if the expense management platform could not only make it easier for people to file an expense claim but also make the resulting payment automatically once approved? Or imagine if the package gave companies the power to issue cards to employees to make pre-approved purchases for training, travel or research, all nicely connected up for ease of reconciliation.

With an embedded finance solution like our Employee Finance Plug-in, these payment capabilities can be easily embedded into an expense-management platform or any similar solution. Businesses can also issue physical or virtual cards to make “as and when” expenses more convenient for employees, as well as locking funds to specific merchants or services to prevent misuse.

2. Back-office solutions

No matter where you sit in a supply chain, dealing with your invoices coming in and out to suppliers and customers quickly piles up to a mountain of financial admin. Not to mention the impact of delays and pain of chasing payments that could force businesses to need loans to plug a cash flow shortfall.

These challenges shouldn’t be an obstacle to business growth, however, not with the solutions that embedded finance makes possible – the kind of solution you might already be building.

Our Supplier Finance Plug-in can supercharge back-office software with automated reconciliation of funds against invoice and funding, the ability to set budgets and controls for specific purposes, and the means to safely on-board and off-board suppliers.

This makes back-office processes smoother and drives the opportunity for error or fraud out of the system. But beyond this, it also opens up entirely new blue-sky innovation, as you can see with Troc Circle.

Troc Circle are using open-netting technology to launch a solution that is due to reduce invoice processing costs by 80% – and make everything ten times faster. Beyond speed, though, it solves a very expensive problem.

Experts say that trillions of pounds are trapped in ‘payment circles’ caused by inefficient global supply chains. Troc Circle have created an algorithm that can identify every payment locked in one of these payment circles and net out every party’s owed amount. They’re making a seriously complex problem simple to solve.

3. Real estate

When we’re so used to digital convenience, real estate can feel pretty archaic by comparison. Marketplaces might make finding property easier, but for rental properties getting tenants through the door still involves agencies taking holding deposits, third parties conducting credit checks and landlords receiving rent. With so many points of contact to clear, it’s a breeding ground for friction.

For innovators building the next leap forward in real estate, embedded finance plug-ins can help them bring property and payments under one roof. What if, by assigning dedicated accounts to individual properties, payments could be centralised within one platform? That would make it easier for landlords to track ingoing and outgoing payments, and far more convenient for tenants who just want to pay their rent and move in.



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