Tapesh Bhatnagar, Head of Digital Solutions at Giesecke+Devrient, has over two decades of experience in authentication, tokenization, and secure technologies. He brings strong skills in product management, business development, and sales across banking, fintech, and digital payments, driving innovation for seamless financial experiences.
In an exclusive interaction with Finance Outlook India, Tapesh Bhatnagar walks us through how embedded finance is transforming business models by integrating financial services into everyday platforms, driving growth while maintaining compliance and improving customer experience.
How is the integration of banking and other financial services into non-financial apps and platforms transforming the way businesses offer financial services through embedded finance and what are the key drivers behind this shift?
Embedded finance, the integration of financial services like payment and investments directly into non-financial platforms, delivers a more connected and convenient customer experience. Customers don’t have to switch between the apps, websites when making a payment. Embedding financial products into ride-hailing, e-commerce, healthcare and other digital platforms allows businesses to engage customers, boost financial accessibility and generate new revenue streams.
Embedded finance is rapidly transforming with APIs, artificial intelligence and cloud native architecture. It makes the integration of financial services in non-banking environments extremely smooth. G+D Netcetera has a leading role to play here with digital payment solutions through API-based financial services integration. We make it possible for businesses to ensure high security standards and compliance when integrating financial services into their offerings.
In addition to improving customer experience, embedded finance also offers tremendous potential for fresh revenue streams, improved customer retention and lifetime value. It is especially invaluable in amid shifting consumer preferences for one-stop frictionless solutions. Companies that are able to embed financial services successfully within their offerings stand to gain significant competitive advantage in this digital era.
What role does open banking play in enabling seamless integration between financial institutions and third-party platforms, and how does it enhance the customer experience?
Open banking is the essential piece to connecting third-party platforms to banks. It does so by creating a structured framework for safe data exchange via standardised APIs. Banks, fintechs, and digital platforms can exchange information directly to each other, enhancing user experience by allowing for quicker interactions without the user having to navigate away from the original service environment.
Besides convenience, open banking also allows companies to develop personalized financial solutions for their customers. It grants businesses real-time access to user financial data which can be used to tailor lending, insurance, and payment services. Customers also gain better financial visibility as they can use multiple accounts in one place, giving them more control. Additionally, stringent regulations also ensure secure, opt-in data sharing which limits fraud risk and increases trust.
Companies like G+D Netcetera offer this seamless connectivity with the highest security, compliance, and fraud protection capabilities. These are, after all, pillars to building consumer trust in the digital financial domain.
What are the primary regulatory and compliance challenges associated with implementing embedded finance solutions in everyday platforms, and how can organisations address them?
Some of these regulations include stringent fintech platforms and financial service provider licensing, adherence to guidelines by the regulator as well as local financial directives. Risk management concerns such as fraud detection, Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance also must be considered.
Organisations are expected to deliver compliance while providing a smooth customer experience. This requires a robust security environment and up-to-date risk management which shall be in line with the evolving regulations. Organisations need to constantly transform their financial services offerings to stay compliant.
One way to do this is for organisations to collaborate with regulated financial entities and leverage API-based security products to safeguard user and transaction data. This can be accomplished by means of technologies such as authentication, encryption, and tokenisation. Also, companies can deploy AI-driven fraud detection and risk assessment products identify and prevent treats.
In this area, G+D Netcetera helps businesses by offering strong customer authentication (SCA), anti-fraud and tokenisation solutions. Given their expertise in secure digital transactions and compliance-driven financial integrations, G+D Netcetera ensure companies remain compliance when deploying embedded financial solutions.
How can businesses leverage embedded finance to create new revenue streams while maintaining a balance between innovation and consumer trust?
Some potential new sources of revenue include transactional fees from embedded payments, Buy Now Pay Later (BNPL) and subscriptions. There is also data monetisation by way of personalised finance recommendations and commission revenues via lending and insurance integrations.
Of course, customer trust is key to long-term success. Business must employ transparent business terms and pricing to stay out of the regulatory spotlight and maintain their reputation. They can also implement AI-based risk profiling, fraud detection, and real time transaction monitoring to improve security and instil confidence.
This is a delicate balance which G+D Netcetera can help businesses achieve by providing solutions that prevent fraud and ensure regulatory compliance. It accomplishes this through API-based financial integration thereby allowing businesses to innovate knowing their financial services are secure. It also allows businesses to continue building long-term customer relationships.
What are the emerging technologies driving the evolution of embedded finance and open banking, and how do they impact scalability and security?
Embedded finance and open banking are driven by APIs, artificial intelligence (AI), and blockchain, among other technologies. These three are central to security and scalability of embedded finance and open banking.
APIs enable seamless financial embedding to allow companies to insert payment and banking capabilities at scale with interoperability across third-party platforms and banks. Subsequently, AI enhances fraud prevention, risk profiling and personalisation. These lend itself to enhanced operating efficiency and building greater customer trust via real-time monitoring and automated decision-making. Finally, blockchain offers increased transaction security, transparency and data integrity. This can help reduce fraud and cyber-attacks while enabling tamper-proof financial transaction records.
G+D Netcetera integrates all three of these technologies to support businesses in scaling their embedded financial offerings while being compliant with regulations. Organisations can achieve secure, scalable financial integration using these technologies, thereby instilling trust, fostering innovation, and expanding financial accessibility in the digital ecosystem.
