Sure. My name is Luke Bewley, I’m part of the founding team and Chief Revenue Officer at Certua, where I lead partnerships, growth, and proposition development strategy. Naturally though, I have worn many hats as the business has developed, from designing elements of our proprietary insurance-as-a-service operating system, to developing Go-To-Market strategies for new embedded insurance propositions. Prior to Certua, I worked for a short time in banking as a grad and later for a fast-growing fintech startup called ENSO Financial. ENSO was acquired just over a year after joining, prompting me to explore opportunities to build something new, which is where I met Tom, John, Peter, and Tor.
Can you tell us about Certua's story and its role in the Embedded Finance ecosystem?
Over the years, our group has expanded to include a tech company, a regulated insurance intermediary and an Account Information Services Provider (AISP). We have developed the infrastructure (both regulatory and technical) and operating system to power new, data-driven, digital insurance propositions.
How is Embedded Finance changing the financial services business model? What problems is Embedded Finance solving, and for what types of companies?
Embedded Finance describes the integration of financial services products seamlessly within or alongside another core product or service (typically non-financial services), as part of a comprehensive end-user proposition. This is something that has been happening for a long time, though now digital platforms and newly accessible data mean that the art-of-the-possible is that much more exciting. Some well publicised digital examples include access to capital via ecommerce platforms or access to travel insurance via online travel agencies.
The way that individuals and businesses consume financial services is changing in the digital era. Software providers and digital platforms are seeking to add financial services to their core offerings to realise multiple benefits. Oftentimes, these firms are not regulated for financial services product manufacture or provision, opening the door for partnerships between financial services product providers and large scale digital ‘distribution’ platforms. This realigns the traditional financial services value chain and distribution model.
In fact, Embedded Finance can create material value and has the potential to (and is already in some cases) solve problems across the value chain:
Product providers benefit from:
Digital platforms benefit from:
Consumers benefit from:
There are plenty of examples of successful Embedded Finance implementations. In fact, it’s been great to observe how some newer digital programmes have matured over the last few years.
Take Shopify Capital as an example. In 2016, Shopify rolled out a proposition (then in beta) to provide a merchant cash advance product to merchants trading on the platform. Fast forward to 2023 and the programme had deployed USD 5 billion of capital to its merchants, netting over USD 300 million in revenues, with those merchants accessing Capital via the platform averaging 36% higher sales.
In the insurance industry too, we have seen a number of successful examples of Embedded Insurance programmes. Cover Genius providing travel insurance via Booking.com, Bolttech providing electronics cover via Samsung Care+ and Chubb providing business insurance via Revolut’s business banking application globally.
While there are many large-scale Embedded Finance programmes in market, we are only just scratching the surface. Digital platforms are waking up to the fact that financial services products can form an important part of their prospectus. Simultaneously, financial services firms are observing the power of scale digital platforms as new distribution channels. For both, embedded financial services present a huge opportunity, where those who are active can benefit from lucrative, long-term strategic partnerships.
Initial success has been seen simply by embedding products that exist today within digital applications. The real winners though, will be those who continue to innovate in the product shape and provide a better overall product and experience for the end customer.
How do you see the evolution of Embedded Finance in the next 5 years?
We have seen great progress over the last 10 years in developing Embedded Finance as a distribution model. In the last few years, several incumbent providers have made headway in strategies to make products available via proprietary embedded distribution mechanisms, joining embedded insurance orchestrators in the battle to secure new digital distribution.
I think the next 5 years will see greater competition amongst providers to secure scale distribution channels. Competition will force providers to innovate beyond the digital provision of existing products, to work with partners to manufacture new and unique products, which are data driven and tailored to specific user cohorts. This should lead to the development of novel products, the likes of which have not been seen before.
Looking much further forward, I imagine the majority of our interaction with financial services will be via a handful multi-purpose applications. With individual financial services programmes facilitated by manufacturing/orchestration partners and updated automatically in line with our data to meet our changing needs.
At Certua, we are developing products to cater for this future scenario. We believe that the products of the future will be personalised and will adapt seamlessly in line with individuals’ needs as their lives change.
About Luke Bewley
Luke is Chief Revenue Officer and part of the founding team at Certua, where he leads the company’s proposition development and growth strategy.
About Certua
Certua is an insurance and technology company specialising in the design, development and administration of personalised insurance propositions which are embedded and distributed by digital businesses.
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