Embedded banking is revolutionizing the financial space by opening new avenues previously closed within the structures of conventional financing systems. Embedded finance helps micro, small and medium enterprises (MSME) optimize cashflows, particularly at this time of the pandemic, by bringing greater efficiency to payments and streamlining various processes to make them more convenient.
John Januszczak, chief executive officer of Union Bank of the Philippines’ fintech unit UBX, said embedded financing is shaping the future of banking while allowing small businesses to focus on the more essential aspects of their operations.
“By embedding into the experiences and activities that matter, in this case for MSME doing e-commerce, the lending experience is made invisible,” he said.
Speaking at the recently concluded CEO Virtual Summit, Januszczak talked about the many ways UBX is making it easier for enterprising Filipinos to find new opportunities to do business even during a pandemic.
He discussed how UBX is paving the way for embedded banking in the country, especially during the pandemic, focusing on solutions geared toward SME such as SeekCap, UBX’s proprietary platform that connects borrowers with lenders.
For SME in particular, SeekCap has made it easier for them to secure loans as needed by allowing the platform to be embedded into other platforms, including e-commerce sites where these SME sell their products. To date, UBX has processed over P3 billion worth of loans on the platform.
In addition to SeekCap, UBX also has Sentro, an online shop builder that allows SME to easily create their own e-commerce site in minutes, which has helped more than 30,000 merchants to date. The recently-launched Sentro Build also enables the creation of virtual versions of malls, expos, trade shows and other physical marketplaces — both platforms providing entry points for MSME to embed their e-commerce activities.
Another solution that is helping UBX normalize embedded experiences in the country is Bux. This platform gives MSME access to a wide range of payment gateways, allowing them to provide different options to match customers’ preferences, whether they want to pay using credit cards, e-wallets, or cash. There are now over 100,000 SME on the platform as of writing.
“Bux integrates into platforms used by SME for selling online. It can be as simple as Facebook and Viber, or it can be as comprehensive as e-commerce solutions and platforms such as Shopify, WooCommerce and others.”
Magnifying the capabilities of all these platforms to promote embedded banking in the country is UBX’s i2i network. This decentralized, real-time payment system connects financial institutions and service providers securely and cost-effectively.
“In the scope of building invisible banking, we are also leading the open finance revolution. When you take platforms like i2i, like Bux for embedded payments, like SeekCap for embedded lending, and other platforms that we’re building, like our embeddable insurance platform Assured, or our self-sovereign identity solution Akin, when you put all of these together and put them behind an API, we have created the ability for other digital platforms, for fintech, and for merchants to allow consumers to move, manage and make more of their money,” Januszczak said.
“Just as UnionBank looked into the future and speculated on a future of invisible banking and spun out UBX, at UBX, we continue to look into the future, and we speculate on what a post-platform future may look like, and we believe that the future is both decentralized and disintermediated,” he concluded.