In this interview, BusinessDay discusses the intricacies of embedded finance with Oke Egbi, Director of Embedded Finance at SeamlessHR. As the financial landscape undergoes a profound transformation, with traditional banking models giving way to innovative financial solutions, Oke shares insights into the emergence of embedded finance and its far-reaching implications for businesses and consumers. However, beyond its transformative impact on the financial sector, SeamlessHR’s embedded finance solution also serves as a comprehensive solution aimed at improving the quality of work life for both employers and employees. Daniel Obi brings the excerpts
With the fintech buzz growing louder to the layman, what is embedded finance?
Embedded finance is quite straightforward because it’s literally embedding finance into an existing system, i.e. it’s all about incorporating financial services seamlessly into non-financial platforms and applications. This means users can access essential financial services directly within the platforms they already use, like payments, lending, and insurance. At SeamlessHR, our embedded finance product, Breeze, perfectly embodies this concept as it is embedded into the existing HR SaaS products we offer.
In your opinion, what are the key benefits that consumers can derive from embedded finance, particularly with Breeze, SeamlessHR’s innovative embedded finance solution? How does this innovation revolutionize traditional banking experiences?
Embedded finance products generally provide convenience by allowing users to access financial services directly within platforms they are already accustomed to, eliminating the need to navigate multiple platforms. This is exactly what Breeze offers and more.
For employers or companies, Breeze offers payment solutions such as bulk payments (e.g., salaries and statutory remittances) and provides credit solutions such as Salary Assurance – a kind of payroll financing and Business Loans. Additionally, it offers an employee benefit package that includes access to credit options like term loans and salary advances. One of its unique features is Earned Wage Access, which enables employees to access up to 80% of their earnings before payday, offering financial flexibility. This comprehensive approach ensures that both employers and employees benefit richly from the solution.
SeamlessHR introduced Breeze and Barizi solutions, offering Earned Wage Access (EWA), among other lending options, in collaboration with the Bill & Melinda Gates Foundation. Could you provide insights into these products and the partnership?
SeamlessHR introduced Breeze and Barizi solutions in Nigeria and Kenya, respectively, offering Earned Wage Access (EWA) and a range of credit solutions to both employers and employees in collaboration with the Bill & Melinda Gates Foundation. These products are designed to provide financial flexibility to different tiers of workers. For example, EWA particularly benefits blue-collar workers who often face cash flow challenges between paychecks. By leveraging EWA, workers can access their earned wages before payday, reducing financial stress and reliance on high-interest loans. This not only enhances their financial well-being but also boosts productivity, creating a win-win situation for both employees and employers.
The partnership with the Gates Foundation has been instrumental in building the EWA solution for blue-collar workers in Africa. Together, we are collaborating with local financial institutions to provide these workers with access to competitive credit solutions, comparable to those available to white-collar workers and corporate employees. This initiative marks the first-time blue-collar workers have access to such favorable credit rates, shielding them from predatory loan sharks who typically charge exorbitant interest rates—sometimes ten times higher than what SeamlessHR offers.
Being homegrown and made for Africa, SeamlessHR is uniquely positioned to address these challenges and provide solutions that are tailored to the specific needs of African workers.
What other innovative contributions does SeamlessHR have to the embedded finance ecosystem?
SeamlessHR’s mission is to help working people in Africa enjoy a better life by addressing the unique needs of the workforce through embedded finance solutions. By integrating financial services into their HR platform, SeamlessHR offers benefits for both employees and employers, including savings plans, affordable loans, and other lifestyle solutions. These initiatives enhance financial stability and overall well-being, ensuring long-term stability for the entire industry.
With local integrations, including unique connections to Embedded Finance, SeamlessHR helps workers collateralize their employment to access well-priced credit, significantly improving their lives. By leveraging payroll access, SeamlessHR supports employers in delivering benefits and credit options that substantially enhance their quality of life as working professionals.
As a result, companies using SeamlessHR’s platform are becoming more productive and successful, thanks to better decision-making capabilities enabled by the platform.
With the rapid pace of technological advancement, what do you believe will be the next frontier of financial innovation, and how can businesses and consumers prepare for these changes?
AI is poised to be at the center of the next phase of financial innovations, with embedded finance being a significant beneficiary. Businesses can prepare by adopting and educating themselves on AI-powered systems, which will provide more automated assistance in managing finances. While there may be initial struggles and resistance, staying informed and adapting to the evolving world of AI will ease the acceptance and decision-making processes.
We are now at a place where artificial intelligence is being layered into embedded finance products. This integration allows customers to leverage AI to improve the management of their finances and streamline business operations. AI is becoming integral to embedded finance, with its benefits permeating every aspect, from customer service to risk management and transaction processing. This journey of learning and responsible use is supported by robust information security practices, ensuring that AI is used responsibly and effectively in the embedded finance ecosystem.
Within the Organization we are training our teams on the use of AI, its benefits, risks, and policies, ensuring that every employee utilizes AI to improve processes and outputs.
With the rise of embedded finance, what potential risks or concerns should consumers be aware of regarding data privacy and security?
As more financial services are integrated into various systems, the amount of sensitive data collected increases, making these systems attractive targets for cybercriminals. As embedded finance continues to rise, both consumers and business owners need to be aware of potential risks regarding data security and privacy. It’s crucial to remain vigilant about the risk of unauthorized access or misuse of personal data to protect financial information effectively.
At Breeze, we prioritize transparency and consent, ensuring that our customers are well-informed and proactive in protecting their financial information. We implement robust security measures and maintain clear communication about data collection and usage practices to safeguard against these risks
Considering the challenges that companies encounter in adopting embedded finance solutions and how they can navigate these challenges, could you elaborate on how SeamlessHR’s Embedded Finance product, Breeze, addresses these industry-wide concerns?
The major challenges embedded finance solutions face are primarily around their adoption, particularly integration into systems, data security, and user adoption. Breeze, a product of SeamlessHR, the leading African HR platform, addresses these challenges intentionally. It is designed to integrate smoothly within existing HR systems, thanks to a partnership with the Bill and Melinda Gates Foundation to ensure secure credit solutions. Additionally, Breeze features a user-friendly interface to facilitate easy adoption.
In what ways are startups and traditional financial institutions collaborating to drive innovation, and what are the key benefits and challenges of these partnerships?
The partnership with traditional institutions is more like a marriage, where it is mutually beneficial for both parties. These partnerships bring together the flexibility and creativity of startups with the stability and resources of established financial institutions and the benefits are endless from innovation to risk sharing.
However, like any marriage, there are challenges to navigate, one of which is the clash of cultures between the fast-paced, agile environment of startups and the more rigid structures of traditional institutions. Bridging this gap and finding common ground is crucial for the success of these collaborations.You can also visit our website enjoybreeze.com to learn more or book a demo.
