In today’s rapidly evolving financial landscape, the disintermediation of finance (where financial services are embedded directly into non-financial platforms) presents a unique opportunity for corporates to own a bigger share of value and gain control over the financial relationships with their customers and their needs within their merchant networks.
Corporations can boost their relevance, drive demand, and strengthen customer loyalty by strategically partnering with financial service providers that align with both their needs and those of their merchants. By integrating these financial solutions into their existing offerings, companies can enhance their overall value proposition, making it more attractive and "stickier" to customers, thereby increasing retention and long-term engagement.
This shift not only enables a more streamlined flow of capital but also drives growth, control, and revenue within the network. Through solutions like multi-bank enabled platforms, corporates can take full advantage of this opportunity. Read on to understand how.
The power of embedded finance for corporates
Corporates often rely on third-party financial institutions such as banks, fintechs, and intermediaries to provide payments, financing, and other financial services within their distribution networks. Traditionally, these financial partners are introduced directly to the merchant network, resulting in individual relationships between each financial institution and merchant. However, this approach presents several challenges. It weakens the connection between merchants and the corporate value proposition, reducing loyalty and retention. Additionally, it leads to fragmented service experiences, increased costs, and a lack of transparency into the transactions that are crucial to the corporate’s operations.
By embedding financial services directly into their own propositions, corporates can now:
1. Own more of the client relationship
With embedded finance, corporates can position themselves as the primary provider of end-to-end services, extending beyond their core offerings to include payments, lending, and cash management within their network. This approach grants them greater control over transactions and enables more direct engagement with both merchants and customers. By integrating financial services into their propositions, corporates can foster deeper, long-term relationships, enhance customer loyalty, and create a more cohesive, value-driven experience.
2. Increase revenue share
Bypassing traditional financial intermediaries allows corporates to retain a bigger portion of the revenue generated through financial services. For example, offering lending or payment solutions in-house enables businesses to earn revenue through interest or transaction fees that would otherwise go to a bank.
3. Enhance network loyalty and support growth
Embedded finance optimizes the entire supply chain by efficiently meeting stakeholder needs at every stage. This approach provides access to financial services at lower cost points, introduces efficiencies across internal operations and partner networks, and reduces the need for manual interventions. As a result, corporates and their merchant networks gain a competitive edge by reducing operational friction and improving transaction speed and transparency across their ecosystems.
Real-world examples:
How embedded finance works
Take, for instance, a global retailer with a vast distribution network. Traditionally, they would rely on external banks for credit and financing for their merchants. By integrating Toqio’s multi-bank enabled platform, the retailer could offer revenue-based lending directly to merchants, linking repayment terms to their sales cycles. This not only provides the merchant with the liquidity they need but also allows the retailer to capture some interest revenue that would normally go entirely to a bank.
This is made possible because corporates possess deep knowledge of their merchants' needs and access to valuable data on their performance. This unique insight positions them to better assess the risks associated with each merchant, allowing for more accurate decision-making in areas like lending and cash flow management. By leveraging this data pulled into Toqio’s environment in real-time through ERP and CRM connectivity , corporates can offer tailored financial solutions, foster deeper relationships, and enhance customer loyalty while maintaining greater control over transactions.
Recently, an FMCG corporation successfully leveraged embedded finance to offer digital banking products, such as accounts and Points of Sale, alongside financing options, delivering prequalified financial solutions directly through their platform and linking these to merchant payment terms. This approach has strengthened the corporation’s value proposition, making it more appealing and "stickier" for merchants, while also generating an additional revenue stream from financing fees and charges. Merchants now benefit from real-time access to financial services, which helps them stay agile and competitive, reducing potential working capital and liquidity challenges.
Toqio's multi-bank advantage
What distinguishes Toqio in driving this shift is its multi-bank enabled platform, which integrates a wide range of banking services, offering corporates unmatched flexibility. With Toqio, corporates aren’t limited to a single financial institution; instead, they can access multiple banks and non-bank providers within the same ecosystem. This approach allows them to offer the best terms and services to their merchants while retaining complete control over the financial relationship, all without assuming any regulatory or balance sheet burdens.
The benefits of using Toqio include:
- Marketplace of products and services: Corporates gain easy access to a diverse selection of solutions and financial providers available directly on our platform, allowing them to accelerate their go-to-market efforts.
- Flexible integration: Corporates can easily integrate new financial services, such as payments, lending, and account management, into their platforms without the need for complex infrastructure.
- Customizable financial solutions: Orchestrate multiple providers to deliver tailored financial products that meet the specific needs of merchants and distributors, crafting unique user experiences that elevate their branding and reinforce their value proposition.
- Streamlined processes: By offering everything on one platform, corporates can reduce the cost of implementing many solutions in different platforms, speed up transactions, and improve cash flow across the network.
Here’s what that could look like:
Key features of Toqio’s platform
Toqio empowers customers and partners to build and deploy tailored financial products that enhance their core commercial offerings. With the Toqio Design Studio, users have access to pre-built apps that can be readily deployed or customized to suit specific business needs. Here’s what you can do:
- Orchestrate multiple financial products from different providers, which helps to bundle the best products from tier service providers.
- Create custom products and user journeys, leveraging essential components like Toqio Workflows, Menu Configuration, Marketplace, Integration Hub, and Data Centre to develop comprehensive, end-to-end financial solutions.
- Construct robust financial propositions, such as integrating revenue collection through accounts and PoS applications by combining apps from a pre-built marketplace of solutions.
With Toqio’s Design Studio, customers have the flexibility to build scalable, dynamic financial solutions that align with their strategic goals, driving stronger engagement and broader market impact.
Seize the opportunity
The disintermediation of finance through embedded solutions represents a powerful shift for corporates. By integrating financial services directly into their platforms, businesses can capture a larger share of the revenue, strengthen financial relationships, and create more efficient, growth-oriented networks. With Toqio’s multi-bank enabled platform, corporates can unlock the full potential of embedded finance and take ownership of their financial ecosystem.
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