The New Value of Embedded Finance for a Flexible Workforce

Finance


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Richard Prime, co-founder and co-CEO of Sonovate, wrote that Open Finance is gaining momentum and API connectivity is helping to give organizations the right tools to make better decisions. I’m here.

The New Value of Embedded Finance for a Flexible Workforce

Image Source: Richard Prime/Sonovate

The B2C value of embedded finance is well-established, and payments via apps like Uber are prime examples of financial products seamlessly embedded into non-financial consumer behavior.

In the B2B context, the value of embedded payments is beginning to gain recognition for a growing number of use cases.

Looking at Sonovate’s record growth in 2022 alone (the company funded a staggering £1.1 billion in invoices), demand for flexible, technology-enabled B2B payment solutions is driving fintech The potential to create new revenue streams and increase the efficiency of businesses across all industries is clear. . In fact, McKinsey predicts that the value of this market will double over the next few years.

B2B embedded payments enable tasks such as speeding up the purchase order request-to-payment process and purchasing postpaid options in a business environment.

But for me personally, one of the most compelling use cases for embedded finance in the wake of the move to greater flexibility in the workplace is the challenges posed by the growing non-regular workforce (contracts and freelancers). We believe in corporate support to deal with.

With the global staffing market valued at $5.4 billion, 74% of freelancers say their salaries are often late and 54% say they never get paid.

In a follow-up Sonovate survey, 23% of companies said they struggled with the additional controls required to manage invoices from temporary workers, and 38% said their company’s cash flow was so limited. It also indicates that it is not set up to process unsolicited payments and agrees that it is on the decline. Outside the standard payroll cycle. At this time, it is clear that many companies lack the proper infrastructure to support their transition to a post-pandemic work environment.

These findings show that embedded payments offer great opportunities as a B2B solution. As the contingent workforce becomes more prevalent (67% of businesses report a tendency to rely more on agency workers), managing more frequent and flexible payments will require a shift in mindset and processes, This means the need for quick access. Liquid capital flows are more important than ever.

Being a native part of the client’s technology system, Embedded Finance will help fintech organizations, recruitment agencies, online labor marketplaces by integrating technology across the workforce supply chain, from recruiting to placement to payment. can help you adapt to today’s world of work.

As Open Finance continues to gain momentum, API connectivity enables secure and fast access to data, empowering organizations with the right tools to make better decisions.

Platforms like Sonovate, for example, can bring an integrated Know Your Customer (KYC) / Anti-Money Laundering (AML) module to your clients to ensure a smooth customer journey from the start.

It also connects to accounting software to provide instant funding decisions, instant allocations, and better reconciliation and reporting than ever before.

The potential use cases for B2B embedded finance are endless, but leveraging its capabilities to empower your workforce is critical. This ensures that temporary workers receive their salaries on time, regardless of cash flow conditions or salary constraints, employers benefit from extended payment terms, and companies of all sizes gain confidence. can grow with

This article was provided by Sonovate and does not necessarily reflect the views of AltFi.

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