Convergence of EmFi with Emerging Technologies

[Music] thank you for those of you who have stayed in the room um I think the first two presentations were excellent I think U you've made my job a lot easier uh but let me start with thanking huawe for having me uh thank you to adgm I love coming back every year um you know I'm lucky enough to actually get the stage every year so I'll try and do my best I'll try and keep you awake for the next 10 to 15 minutes that I have um do I have a clicker sorry ah there you go right so what I'm going to talk about is embedded finance and and let me just start with with saying that I think I think you know this is a much used term that we are at the most exciting times of any sector at any given time you know I've been in this for 20 years and I've heard someone say that maybe 50 times right I do think we are at a very interesting juncture of financial services um I was at Singapore fintech Festival a couple of weeks ago and and and the theme was re architecting of the Global Financial system and I truly believe that we have already started on that Journey right and what's very exciting here is that there are number of innovation platforms right and I think it's foolish for a number of us including some Consultants who take these topics in isolation I think what we are genuinely seeing is the convergence of multiple Innovation platforms coming together and actually creating a future which is going to look very very different than what we have been in past of what's also very interesting is that the change is actually quite exponential but it's being drip fed into our system so we actually don't feel the change as much as in the past as you did right a lot of topics are just coming around is becoming part of our Lives because you know we have mobile phones and mobile phones have this ability of actually driving change in our Behavior without us actually realizing it I actually compare it to the to to the way that you know when you boil a lobster right you put a live live boss Lobster in a in a Boiling Pot and he doesn't realize that he's gotten bought now we're not getting boiled but I'm saying that's what the changes so I'm not going to get into too much of of of of the jargon out here you know there are number of things going on there are four up here and I'm sure you could point out to another 40 which is sort of driving the change the one I I'm going to sort of sort of stress on a little bit is around this technology shift right which which um you know whether it's Cloud whether it's AI or a dozen if not two dozen other Technologies are coming together and actually they have an interplay among themselves and that's what I'll try and get to right so are people comfortable with the term embedded Finance because it's not a co-brand credit card right uh you know when we started talking about Co embedded Finance about five years ago people said well we've had it forever right we've been issuing co-brand credit cards co-brand credit cards isn't Apple pay is actually a very good example of what embedded Finance is where the customer Journey prevails and a transaction becomes as invisible as possible possible so the whole concept of embedded Finance in my simple humble opinion is actually making Financial Services as invisible as possible right that's just one monra which if you can if you can take away from this room please do so right here's a great analogy it's not something that I came up with uh I I actually begged and borrowed this slide off somebody which shows the difference between an embedded finance and integr integrated payments using that sort of analogy and I'll give you a very simple example payment gateways which we've all being used to on the back of e-commerce is an excellent example of integrated payments right but it is not embedded right as I said for embedded Finance you're going to soon have biometric based payments where you're going to go you know people in Amazon are walking with their palms soon we'll be using different parts of our bodies I don't want to get too creative with it but that's what embedded Finance is and and and I would say download this picture take a picture if anyone actually comes up and says what's embedded Finance just put this picture in front of them it's an apartment most people in you UA are quite familiar with apartments right so I use that example and embedded Finance is not only about payments right a lot of what we have actually seen in the last sort of five to seven years is about how we have embedded payments now the reason why we've talked a lot about payments is because arguably it's a lot easier to embed payments as we get into more complex uh uh Financial transactions whether they're wealth whether it's lending whether it's savings or others actually gets more complex regulation gets more complex Integrations get more complex Banks and traditional incumbents get more precious right so there's a lot which needs to happen if people think that we're going to just do this and embedded Finance is going to happen tomorrow no chance there's a whole ecosystem which needs to move alongside with it right the one very interesting example I'll leave you with is buy now pay later right uh a lot of people give it a lot of flak uh I have always been a flag bearer for D npl from the very beginning right I think there's a lot wrong about it but I think there's more right about it than there's wrong and I think over a period of time it is that's another very good example of how you bring alternative lending but it's actually blurred the lines between lending and payments and that's the beauty of embedded finance and some of the technologies that we are seeing actually makes these more possible and the lines get more blurry so this is my first slide which I do think uh is important for all of you too for embedded Finance to happen the got to be a big party and that party's got to be attended by everybody right any part of this value chain or framework whatever you'd like to call you doesn't come to the party embedded Finance doesn't happen whether it's technology players like huawe whether they are Regulators like adgm whether they are incumbent Banks or insurance companies whether they are fintex and I'm sure there are some Founders out here whether they're embedders which could be Telos and Retail organizations and actually most importantly customers because they need to understand what they're actually doing with this right and that's where lies the complexity and I do think technology is playing whether it's Cloud whether it's AI whether it's any other thing is playing a very critical role in making all these parts of this framework and value chain more comfortable with the concept of the different right and that's the whole concept it is different here is a a slide again which uh actually has been written by someone I actually know and I have a lot of respect for if embedded Finance happens and it actually lives up to its potential I say it even lives up to 50% of its potential it will rear architect the way we do Financial Services right and here is just one picture which manifests that change right today most of our banking actually happens here right and you can see Huawei has a key rooll to play there which they've obviously said they are but imagine if you start shifting towards the right and and that's your entire value pool you're going to actually have Financial Services being delivered by everybody and I'll give you a number if you guys are not aware Starbucks today holds over 160 billion if I'm not wrong dollars of customer deposits in a bank account I think makes it the sixth largest institution in the US with regards to holding customer balances and it does it on the back of a simple preate card right and that's the power so you're actually going to see actors whether they're Telos who' obviously taken the progressive lead I used to work for a retailer and sort of I guess championed some of that embedded Finance stuff in the UAE initially but you're actually going to see embedded Finance come to you in different forms and shapes through different channels and that's where it actually becomes interesting you know topics like Financial inclusion right there's no better way to close Financial inclusion but through channels who those people who need to be included can be Shopify is a great example right who uses technology incredibly well in terms of unlocking all this potential with financial services again a number for you to remember Shopify actually generates 70% of their income out of financial services only 30% out of their Core Business for me Shopify is the greatest fintech player in the market right but that's just my opinion you don't have to believe in it big numbers I don't want to waste time you can just Google all this yes there's obviously a bias towards retail but embedded Finance actually lives across the board and I guess this is the challenge with technology players have like Huawei that it's not just about Telos but you need to talk to retailers you need to talk to Automotive players you need to talk to uh Healthcare Providers Etc so on and so forth right I know I have one minute but I'm going to take three right um this is an important slide and I guess number seven is why we are here right why we're talking about embedded Finance now is that you can actually see that there is an interest across the board for making embedded Finance work The Regulators might want to make it happen because of financial inclusion I'm just giving you example an embedder wants to happen because they want to sell more shirts right a customer wants to do it because they don't want to visit branches and have long conversations with their Banks right there are investors who see tremendous opportunity for unlocking potential Beyond just investing in fintex but they want to embed in players and Technology players now have these Technologies which makes this super efficient highly scalable extremely safe and so on and so forth right so that brings me to my two topics I'm going to say so I could have 10 of these boxes out here right if not 20 right I'll just pick on two right one is AI now you know I don't think a day passes in our life when we don't hear something about AI it's been around for a long time guess what I put embedded Finance fig Tech AI in one presentation right that's awesome I claps me out here so AI we're not going to get into I think what I want to talk a little bit about is uh cloud and and the reason I want to talk about cloud is that it's not as overt right people don't talk about it as much but it's actually been doing a lot for us already right and and here are some examples right so I think we heard about real-time processing the ability to manage large data sets be able to process in real time do it in a safe and secure manner right I think it's been you know a God's gift and I'm not a religious person here but the God's gift to startups right who don't have to build on Prem and we need more and more of these disruptors to come in right it has actually improved arguably the trickiest part of any Financial Services which is around credit uh uh provisioning right and and and finally but not but not not not least is that it is allowing new use cases right so we've had rfids forever it's has been around long longer than I've been alive right and I'm an old guy right with iot combined with Cloud you know you will actually see a massive transformation happening in the automotive sector you'll see the supply chain angle changing you got huge opportunities in supply chain and she wants me to keep quiet all right here's what I I'll leave you with and and that's my goodbye slide um they did tell me I had 10 minutes but unfortunately you never can put me on stage with less than 15 but hopefully this was useful uh you can always grab me outside I write every day on the topic if you're bored you can follow me on LinkedIn and you you'll hear what my points are thanks a lot