Interview with HSBC on Embedded Finance and BaaS

Friday 10 November 2023 12:20 CET | Editor: Mirela Ciobanu | Interview

Aman Narain of HSBC shares the current trends in Embedded Finance and BaaS, talking about how Embedded Finance is implemented by the bank, and HSBC’s partnership approach.

What are the other major trends that you see powering the growth of Embedded Finance and BaaS?

(Embedded Finance being the customer-facing aspect that prioritizes a seamless financial experience and the delivery of 

customized solutions, while BaaS is functioning as a back-end process that enables this front-end experience through the provision of the necessary regulatory and technical infrastructure as well as the financial services that enable digital banks and non-banks to offer these products on their own).

Some of the most prominent are as follows:

I.   End-user expectations: There’s been a significant evolution of end-user expectations recently which have crept into the B2B segment. Businesses are more tech-savvy, expecting greater speed, decisioning, convenience, and ultimately an improved customer experience.

  • UX: Offering a simple, intuitive experience that enables users to access financial services as needed within their own context is key.

  • Seamless integration: Users have increasing expectations for banking services to be seamlessly integrated with the existing workflows and environments they use to run their business.

  • Real-time access to data and insights: Allowing end-users to make more informed decisions, coupled with the rich data that the respective environment holds, can be a game-changer.

  • Security: End-users find comfort in a financial offering being powered by a highly regulated and secure institution, such as a bank.

  • Personalisation: Solutions should anticipate their needs and provide relevant service recommendations.

II.   Open APIs: These have played and will continue to play a significant role in enabling embedded banking; allowing third-party developers to access financial data and services and fintechs and other businesses to incorporate banking functionality into their services.

III.   Relationships: This is key. Building an embedded banking solution requires close collaboration. It is essential to build trust, have strong communication and work collectively towards a shared goal.


What parts of HSBC's business and what customers are most impacted or influenced by Embedded Finance (key use cases), and what are the key benefits for customers? Could you provide an example of how HSBC has successfully implemented an Embedded Finance solution?

Demand continues to increase for consumer embedded finance, and it is quickly becoming normalised (e.g., BNPL). It may almost be too late for larger banks given how populated the market is across Neobanks, challengers, Fintechs and technology firms.

We see the key market to be B2B-based embedded finance. There is undoubtedly a desire for Embedded Finance, but not necessarily the knowledge on implementation for success; therefore our approach is the education and integration of banking within the customer experience.

With BaaS we have an opportunity to collaborate with partners to develop impactful solutions in the B2B space.

We cannot do it alone, and there is power in bringing together respective strengths. This is certainly true of HSBC’s collaboration with NetSuite to power ‘AP Automaton’. NetSuite’s Bill Capture proposition is powerful in isolation, allowing customers to reduce risk, create time efficiencies and improve processes. By embedding access to payment services into this journey, end-customers have real-time visibility of account balances and invoice and vendor information, whilst also enabling reconciliation automation. This enables end customers to take advantage of payment terms and avoid late payment fees, duplicate payments and overcharges.


Can you share HSBC`s experience with Embedded Finance and Banking-as-a-Service? What is HSBC's role in the Embedded Finance space, and where does it fit in the value chain?

We anticipate early adopters in B2B will be horizontal SaaS corporates such as NetSuite, Sage, QuickBooks, or B2B marketplaces powered by the likes of Salesforce and Adobe Commerce. Our hypothesis, which continues to be validated by research, is that SMEs continue to have challenges in accessing payments, working capital and FX when they need it.

By partnering with these venues, we can bring the best of HSBC at the right time and place to these customers. By coupling the wealth of data stored in these ecosystems with the bank’s solutions, we can decision, offer and onboard at pace.

We believe there is a huge opportunity to win: whether you’re a bank, BaaS orchestrator, corporate or SME. BaaS drives efficiency, growth and seamlessness, and everyone has a part to play.


How does HSBC approach partnerships with fintechs, BaaS platforms, and other companies to offer Embedded Finance solutions? How does HSBC measure the success and effectiveness of these partnerships?

We are focusing on B2B which differs from B2C in terms of transaction volume, capital access requirements, and global needs. It is more complex, but it also offers a huge opportunity to change processes, create meaningful value and improve CX.

Measuring success can be nuanced and needs to be agreed upon at a partnership level. Considerations may include:

  • Customer engagement and adoption – engagement levels, usage via the number of onboarded users, transaction volumes, number of users making enquiries

  • Customer satisfaction – feedback/research to understand experience improvements and challenges to address

  • Revenue generation and cost savings – revenue growth, coupled with operational efficiencies.

What impact do you expect Embedded Finance to have on HSBC over the next 3 years? How will HSBC monetize the reported USD 7 trillion market opportunity?

It is certainly a strategic priority for HSBC, underpinned by many corporates engaging with us on the subject. We are growing our capability to help solve business and end-user challenges, which we believe also helps us support existing customers both now and in the future as the industry evolves.

Regarding partnerships, it is important to establish value-sharing upfront, ensure a level playing field in terms of contribution, and work together to resolve problems.

Ultimately, we want to see embedded finance become normalised in the B2B space. We must concentrate on solving end-customer problems as there can be no success if we don’t make these needs our central focus.


This interview was first published in The Paypers' Embedded Finance and Banking-as-a-Service Report 2023, which is the latest comprehensive market overview and analysis focusing on the key products and players within the Embedded Finance and BaaS ecosystem.         


About Aman Narain

Aman is the Global Head of Platforms for Global Commercial Banking at HSBC. Before joining HSBC, he led the new payments ecosystems at Google Pay. Aman was also the Head of Digital & Fintech at Schroders, where he spearheaded digital ventures. Before that, he served as the CEO of BankBazaar International.




About HSBC

HSBC is headquartered in London. HSBC serves customers worldwide from offices in 62 countries and territories. With assets of USD 2,990 billion on 31 March 2023, HSBC is one of the world’s largest banking and financial services organisations.

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Keywords: embedded finance, embedded payments, banking, fintech, BaaS
Categories: Banking & Fintech
Companies: HSBC
Countries: World
This article is part of category

Banking & Fintech


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