1. Funding figures for 2023 so far suggest that fintech may struggle to hold on to its lead in VC funding. What’s going on in the sector in Europe?

As a founder and entrepreneur who has interacted with numerous venture capitalists globally, my perspective on the fintech sector, not particularly in Europe, is that it’s currently undergoing a considerable transformation. The early focus on high volume, early-stage investments has gradually shifted towards more established companies with proven business models. This shift signifies the maturation of the industry and the move towards a more diverse range of innovations, particularly in emerging sub-sectors such as embedded finance. 

The FinOps platform developed at mrkter, is a prime example of how the landscape is evolving. We’re integrating financial operations with marketing processes, providing comprehensive solutions that transcend traditional fintech offerings. 

mrkter offers two distinctive products, one for affiliates, publishers, media buyers, and another for large advertisers working with a vast network of affiliates. The second product helps marketing and finance teams see all their spending across vendors in real-time, enabling one-click payment execution for thousands of vendors. This streamlines the payment process for finance teams and ensures marketing departments can keep track of payment status and ensure vendors are paid on time.

We also provide a marketing budget management tool for large advertisers, allowing them to efficiently manage their budget allocations across teams. By offering this solution to large advertisers, we expose our main product to millions of potential affiliates, publishers, and media buyers. 

Venture Capitalists are increasingly seeking companies that provide such sophisticated solutions. They’re looking for more than a product; they want to see a genuine go-to-market strategy, a demonstrated product-market fit, and a viable business and revenue stream. A company’s go-to-market strategy has become a significant focus, which was less emphasized just a few years ago.

2. Embedded finance is predicted to bring in trillions by 2026. What is it and how does it work?

Embedded finance, defined as the seamless integration of financial services into non-financial platforms, is revolutionizing how consumers interact with financial services. Enabled by APIs and advanced technological infrastructures, this transformation promises to bring financial services closer to the customer’s journey across various platforms.

At mrkter, we are at the forefront of the embedded finance revolution, uniquely merging it with marketing operations to create an industry-leading platform. Our capabilities extend to delivering automated payment solutions, connecting with a multitude of marketing vendors, and handling the financial aspects of marketing operations seamlessly. By providing precise reconciliation of income and expenses, we empower marketing-driven businesses to have granular visibility and control over their finances. This not only streamlines their operations but also enhances their decision-making process. With mrkter, businesses transcend traditional limitations, venturing into a future of optimized financial operations specifically designed for the marketing landscape.

Yet, the integration of embedded finance is just the beginning. As we look ahead, we expect to see an explosion of increasingly sophisticated products born out of the combined powers of embedded finance and AI. These tools will not only automate and streamline financial operations but also harness the vast amounts of data generated in the process.

3. What are some examples of embedded finance within the startup ecosystem? How does BNPL tie in?

Numerous examples of embedded finance can be found in today’s startup ecosystem. Consider ride-hailing apps that have seamlessly embedded payment systems into their platforms, or e-commerce platforms integrating Buy Now Pay Later (BNPL) services for convenient, immediate purchases with deferred payments. These innovations have significantly enhanced the customer journey and the efficiency of transactions.

By leveraging embedded finance through our partnership with Airwallex, and consolidating data from over 600 connectors, we’ve built an innovative product designed to help marketers grow. Much like how BNPL allows consumers to extend their purchasing power, mrkter’s advanced payment solution offers a comparable advantage to marketers.

Take, for example, entities involved in purchasing traffic with the intent of reselling at a premium. These operations stand to gain immensely from our solution. By serving as a bridge between expenditure on traffic acquisition and incoming revenue, we help reduce cash flow strain, enhance operational efficiency, and ultimately, amplify their profit margins..

 This is a tangible example of how, with embedded finance and data, we can create robust financial products analogous to BNPL. The ultimate objective is to offer innovative solutions that enable our users to grow their businesses more efficiently and effectively.

4. What are some of the benefits of embedded finance — to both the customer and to businesses?

Embedded finance offers a multitude of benefits to both businesses and customers. For customers, the primary advantage is the convenience and seamless user experience it provides. Instead of navigating multiple platforms to access different financial services, customers can manage everything within one platform. This significantly reduces friction and simplifies transactions.

For businesses, embedding finance into their platforms can lead to new revenue streams and increased customer engagement. Companies are able to offer a broader, more complete range of services, increasing their value proposition. Additionally, embedded finance can lead to operational efficiencies by automating manual financial operations, allowing businesses to save time and resources.

Take mrkter, for example. By integrating financial operations with Airwallex’s embedded finance solutions, we’re able to provide our users with a comprehensive platform for managing their marketing finances. Not only can they track all marketing expenses in one dashboard, but they can also pay their vendors directly from the platform. This eliminates the need to switch between different platforms and makes the process much more efficient. By leveraging embedded finance, mrkter offers a stronger, more engaging product that brings a higher lifetime value to our customers.

5. Where can embedded finance innovate next?

Embedded finance has the potential to transform a wide range of industries and services. Already, we’re seeing financial services being integrated into various platforms ranging from e-commerce and social media to logistics and marketing. However, this is just the tip of the iceberg, with plenty of room for further innovation.

At mrkter, we are constantly exploring new ways to merge financial operations with marketing processes. Our goal is to enhance the value we deliver to our users, by equipping them with sophisticated tools that streamline their operations, provide real-time financial insights, and foster efficient budgeting and expense management.

However, the potential for innovation doesn’t stop there. The next frontier in embedded finance could well be its democratization, making these sophisticated tools available not just to SMBs and enterprise businesses but also to micro-companies and individuals.

Leading embedded finance providers like Airwallex will need to adapt their offerings, evolving into the ‘AWS of the embedded finance industry’. They will need to provide a range of products that cater to both complex enterprise requirements and the simpler needs of smaller businesses and individuals.

As AI’s powerful analytics capabilities intertwine with embedded finance, businesses will gain a more profound understanding of their financial operations. These insights can then drive more informed and strategic decisions. For micro companies and individuals, this synergy can bridge the gap between complex financial concepts and everyday financial understanding, making financial management more accessible for everyone.

With embedded finance and AI working hand in hand, we’re about to witness a new era of financial products that simplify financial operations and make understanding finance more attainable for everyone, not just financial experts. This democratization of financial understanding has the potential to elevate the entire financial industry, driving innovation and inclusion. In essence, the future of finance will be powered by data-driven insights, personalized services, and seamless user experiences, all made possible by the fusion of AI and embedded finance.

6. How does open banking connect to embedded finance?

Open banking operates in two main ways, both of which contribute to the dynamic potential of embedded finance.

The first aspect of open banking involves pulling data from financial institutions. This data, encompassing everything from transaction histories to account balances, can be used to innovate new products and services. For instance, it can help in creating customized financial products, improving risk management and underwriting processes, and introducing new participants into the financial ecosystem. This data, when analyzed and interpreted correctly, can unlock significant value and insight, thereby enhancing the overall customer experience.

The second aspect of open banking enables the execution of financial transactions. Once granted the necessary permissions, third-party providers can initiate payments or make changes to the customer’s financial institution account. This essentially empowers non-financial businesses to extend their services into the financial realm, culminating in an integrated and seamless user experience.

At mrkter, we leverage both these aspects, in conjunction with the robust infrastructure provided by Airwallex, to offer a comprehensive solution to our users. Not only can they view and analyze their financial and marketing data, but they can also execute payments, manage their budget, and optimize their marketing strategies – all within a single platform.

Looking ahead, the convergence of open banking, AI, and embedded finance will push these capabilities even further. Through AI, we’ll be able to glean deeper insights from open banking data and automate more sophisticated financial processes. This future vision of finance, powered by the likes of Airwallex and AI technology, will see increasingly personalized and efficient services, further closing the gap between financial institutions and end-users.

7. Regulation is often a bottleneck. How is it impacting embedded finance and how could it impact the sector in the future?

Regulation is indeed a critical aspect of embedded finance, as with all fintech areas. While it plays a crucial role in ensuring consumer protection and maintaining market integrity, it can also pose significant challenges, such as slowing down the pace of innovation and creating barriers for market newcomers.

Navigating these regulatory complexities is where partnerships like the one between mrkter and Airwallex come into play. Leveraging established financial institutions’ existing compliance structures allows fintech startups to focus on innovation and value creation for customers.

Specifically for mrkter, our partnership with Airwallex has been invaluable in this respect. Airwallex’s dedicated compliance team assists in the financial onboarding of our clients, taking the burden of regulatory compliance off our shoulders. This allows us to focus on what we do best – creating the first FinOps platform dedicated specifically for marketers.

This regulatory support extends beyond simply ticking boxes; it gives us the freedom to innovate and deliver more sophisticated financial solutions embedded within our platform.

In summary, while regulatory issues may pose challenges in embedded finance, strong partnerships, like the one mrkter has with Airwallex, can effectively navigate these complexities. This allows us to continue pushing the boundaries of innovation and offering significant value to our clients.

8. Are there any other potential hurdles?

Absolutely, as with any growing industry, there are a few potential hurdles in the road ahead for embedded finance. Here are some:

1. **Technological Challenges:** With rapid advancements in technology, keeping up can be a challenge. As a platform, mrkter has to continually update and innovate to stay ahead of the competition. Our partnership with Airwallex greatly aids in this aspect, but it’s still an ongoing process.

2. **Scalability:** As the user base grows, ensuring the platform scales efficiently to handle increased volume of transactions and data can pose a challenge. This is where infrastructure and architecture decisions become crucial. 

3. **Data Privacy and Security:** With increasing digitization of financial services, data privacy and security have become significant concerns. Ensuring robust data security protocols and complying with data privacy laws across multiple jurisdictions can be complex and demanding.

4. **Customer Education and Adoption:** The benefits of embedded finance can only be realized if customers understand and adopt these services. Educating customers about these benefits and how to use the new services is essential.

5. **Market Dynamics:** The competitive landscape of the embedded finance market is changing rapidly. Staying adaptable and being able to pivot quickly in response to these changes is crucial for survival and success.

At mrkter, we’re continuously working to address these hurdles head-on, leveraging our partnership with Airwallex and maintaining a strong focus on innovation, scalability, data security, customer education, and market awareness.

9. Lastly, could you tell me a bit about your company and the work it does with embedded finance?

At mrkter, we’re pioneering the financial operations (FinOps) revolution for the marketing industry. As the first dedicated FinOps solution for marketers, we’ve created a versatile platform that addresses the unique needs of both large advertisers and smaller entities such as affiliates, publishers, and media buyers.

Our platform provides large advertisers with an array of robust functionalities:

• Data Collection and Integration with over 600 API connectors to marketing vendors, enables informed decision-making and timely campaign adjustments. An aggregated dashboard provides the CMO and CFO with an overview of the entire marketing department’s spending.
• Budget Management: Real-time alerts facilitate efficient budget management by the CMO and CFO, preventing overspending.
• Advanced Payment Financing: Large advertisers can secure more traffic from their affiliates by offering an advanced payment financing option through their partnership with mrkter.   
• Banking Capabilities: mrkter’s platform extends banking capabilities, such as global accounts, payment card issuing, foreign exchange services, and acquiring, to large advertisers, providing them with increased financial control and efficiency.

Small Clients (Affiliates, Publishers, Media Buyers):** Smaller entities can maximize the benefits offered by our platform:

• Data Collection and Integration: Our platform engages in real-time integration with a diverse spectrum of marketing platforms, providing a comprehensive view of all marketing expenses and income. This enables a more granular understanding of each client’s ROI, measured in real-time, empowering our clients with actionable insights into their marketing performance.
• Budget Management: Effective tracking and control of spending is facilitated, ensuring budget compliance and financial discipline.  

• Cash Flow Management: Our platform integrates real-time cash flow management with all spending and income data, enabling better financial planning.  
• Advanced Payment and Financing: mrkter can advance payment due from clients, thereby eliminating cash flow delays and enabling growth.
• Client-Vendor Management: We provide a clear view of income and expenses, thereby enabling ROI calculation per client.
• Banking Capabilities: mrkter equips smaller entities with robust banking capabilities, including the creation of global accounts and issuance of payment cards. 

In partnership with Airwallex, we’ve crafted a powerful FinOps platform that simplifies financial operations and unlocks growth and efficiency opportunities. Our platform stands out with its suite of embedded financial services and the unique advanced payment financing feature that empowers marketers to generate more traffic and revenue without the need for immediate upfront capital. This tool is our innovative response to the Buy Now Pay Later (BNPL) model, tailored to suit the needs of marketers.

We’ve also harnessed embedded finance to offer comprehensive, value-adding solutions such as issuing cards per vendor spend and creating global accounts per client, significantly improving reconciliation and ROI tracking.

Venture capitalists are increasingly recognizing the value of comprehensive solutions that solve real problems, validate their market fit, and demonstrate a clear business and revenue stream. With our groundbreaking services, we’ve positioned ourselves uniquely in this evolving landscape and contributed to the success and growth of our clients.