Deciphered: The Fintech Podcast

In this episode of Deciphered, Adam Davis, Associate Partner at Bain & Company and Jeff Tijssen, Global Head of Fintech, Bain & Company, are joined by Matt Harris, Partner, Bain Capital, and Sophie Guibaud, Co-founder & CCO of Fiat Republic, to discuss embedded finance marking a new era in how consumers and businesses build and manage relationships with financial services.

Embedded Finance: What Does it Take to Prosper in the New Value Chain?

Timestamps:
- Defining embedded finance (11:10)
- Sticky & data rich relationships (12:42)
- A new value chain & how organisations are positioning themselves within it (13:16)
- Who wins from a revenue perspective, and how will that shift in the next 2-5 years? (16:42)
- New use cases of embedded finance (26:20)
- What capabilities are needed to operate in this value chain? (29:29)
- Are we seeing other platforms bringing financial services in-house? Or is this limited to bigger companies? (34:31)
- Risk within the value chain, and embedded finance model (38:24)
- Stepped approach to embedded finance (40:10)
- Regulations in an embedded finance context (41:39)
- Most important points to consider about risk and compliance (45:54)
- Implications of complete embedded financial services (48:05)

Sources & Resources cited:

Sophie's Book Co-Authored by Scarlett Seiber: Embedded Finance: When Payments Become An Experience

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You can find Adam Davis here
- You can find Jeff Tijssen here
- You can find Matt Harris here
- You can find Sophie Guibaud here

In this episode of Deciphered, Adam Davis, expert associate partner at Bain & Company, is joined by Erin McCune, expert partner at Bain & Company, Manish Kohli, head of global payments solutions at HSBC, and Thierry Chilosi, chief strategy officer at Swift, to discuss what’s at stake in the world of Wholesale Payments.

Timestamps:

• 00:00 Introduction
• 04:07 What’s at stake in the world of Wholesale Payments?
• 08:06 Why are wholesale payments so important?
• 10:05 From the FI's perspective, what are the profit pools and ways of making money within wholesale payments?
• 14:51 How have wholesale payments changed in the last 10 years? What's driving innovation?
• 23:39 Will real-time payment networks lower the barrier to entry for new payment products?
• 29:00 What are the effects on working capital and liquidity with real-time infrastructures working 24/7?
• 33:48 Swift's modernisation journey - from telex to the new XML standards
• 36:57 How will Swift's new collaborations with Visa and Wise serve businesses and banks going forward?
• 38:38 What makes a successful partnership in the fintech space?
• 42:19 What will the wholesale payments industry look like in 15 years?

You can read more about Bain’s POV on Wholesale Payments in the recently published brief: The Fragmentation of Wholesale Payments Calls for Banks to Remake Their Approach

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• You can find Adam Davis here
• You can find Erin McCune here
• You can find Manish Kohli here
• You can find Thierry Chilosi here

For more insights from the Deciphered podcast, visit the page on Bain’s website

In this episode, we explore what the future holds for neobanks, with so few currently profitable in the face of a current economic downturn. We’ll discuss the challenges of setting business strategies over the next couple of years, answering key questions such as whether neobanks should pursue growth at the expense of unit economics, how they can continue to differentiate their revenue streams from one another, and ultimately what they should do as rising rates pressure investors to stay clear of potentially “riskier” assets.

Neobanking Revenue: How to Differentiate in a Crowded Market

Timestamps:
- Neobanking revenue: How do you differentiate in a crowded market? (3:21)
- Where are we right now with Neobanks? And how healthy are they? (6:08)
- VC funding: How will this play out with regards to Neobanks vs Fintech in general (10:17)
- Examples of Neobanks diversifying revenue & BaaS (17:15)
- Subscription based revenue: Does it work globally? And how will it impact the revenue of Neobanks? (21:50)
- Does becoming a licensed bank slow down the creation and shipping of products? (23:42)
- Embedded vs standalone banking in the future (28:55)
- How should we bank with a Neobank? (33:53)

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• You can find Adam Davis here
• You can find Jeff Tijssen here
• You can find Nik Milanović here
• You can find Valentina Kristensen here

Sources cited:

• Nubank Customer Base - Statista
• Revolut Customer Base - Revolut
• Neobank Profitability - Forbes
• Goldman Consumer Banking Revenue - Pyments.com

In this episode, Adam, Ryan, Nigel and Alex look at how Buy Now Pay Later (BNPL) has evolved, where it is in the present day and where it is heading.

-What percentage of transactions currently use BNPL?
-When will the rate of growth for BNPL slow?
-How do retailers and providers evolve to meet consumer needs?
-How will regulators impact this new financial phenomenon?

Timestamps below:

Divergence & convergence? The Bain answer first! (2:36)
- Macroeconomic pressures (5:32)
- The background of BNPL (6:16)
- Credit modules (8:36)
- What has led to the rise of BNPL? (10:20)
- Effects of consumer experience on change (10:36)
- Data analytics team overview (16:02)
- Incorporating human psychology into algorithms (19:58)
- Merchant benefits (23:06) & (24:07)
- BNPLs are becoming platforms (23:47)
- Where does BNPL fit in with retailer's payment strategies (27:00)
- Where does your biggest cost space sit (29:26)
- Generational shifts & future projections for growth (32:22)
- Who should be getting into BNPL? (33:53)
- Regulators (42:33)

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You can find Adam Davis here
- You can find Ryan Garner here
- You can find Nigel Verdon here
- You can find Alex Lang here

In this episode of Deciphered, Adam Davis, Associate Partner at Bain & Co, is joined by Jeff Tijssen, Expert Partner and Global Head of FinTech, Bain & Co, Christina Riechers, General Manager, Square Banking and Richard Davies, Chief Executive Officer, Allica Bank, to discuss SMB: Is there still a growth opportunity, or are they now over-served?

Timestamps:

• 00:00 Introduction
• 07:37 SMB: Still a growth opportunity, or now over-served?
• 12:52 Strategy of Square banking & what is your remit?
• 15:27 Differentiating Square banking & gaining autonomy
• 17:40 Success factors at Allica Bank
• 19:33 Have SMB margins held for providers through the cost of living crisis/rising interest rates?
• 23:52 How much share should fintechs take from incumbent FIs and banks?
• 27:46 How hard is it to capture ongoing SMB engagement without a full integrated banking offering?
• 29:53 What new products are Square and Allica Bank looking to provide?
• 34:15 Jobs for small businesses: What are they, and how are they effected by technology?
• 39:55 What are the differences in serving increasingly larger businesses, and how do jobs change with this?
• 44:47 Should we expect consolidation in facets of SMB? And who's competitive in the space?

Please subscribe to the show so you never miss an episode, and leave us a review if you enjoy the show!

• You can find Adam Davis here
• You can find Jeff Tijssen here
• You can find Christina Riechers here
• You can find Richard Davies here

For more insights from the Deciphered podcast, visit the page on Bain’s website