Thank you for joining the Ross Republic podcast. In our thirty-fourth episode, your host Adrian Klee is joined by Christoffer Malmer from SEB to discuss its new embedded finance business unit.

Listen now on Spotify / Apple Podcasts (links will be added soon).

As one of the most hyped fintech trends, embedded finance is increasingly put on traditional banks’ strategic plans. It describes the integration of financial services into non-financial propositions, such as retail or e-commerce platforms, transportation services, or software, allowing users to access financial services seamlessly without having to leave the platform they are already using. As more and more financial services are atomized and natively integrated into the propositions of non-financial brands, banks need to decide how to line up against such new business and distribution models.

For Skandinaviska Enskilda Banken AB, in short SEB, a northern European financial services group headquartered in Sweden, the direction is clear: According to its latest investor presentations, the bank’s 2030 strategy entails to “rethink ways of producing and distributing products and services”, as well as “to strengthen innovation and business momentum through external partnerships”. A key enabler of this strategic direction is SEBx, the innovation studio that explores new technologies and customer offerings to innovate, build, and enable “the best financial services”. As part of SEBx, our guest Christoffer Malmer, has built up a new tech stack from the ground up and simultaneously leveraged decades of operational and risk experience of SEB to adapt the operational processes at SEBx to the age of embedded finance. Hence, SEBx started out as greenfield play, with the goal to leverage both the bank‘s structural competitive advantages, such as its balance sheet, risk and regulatory expertise with the entrepreneurial advantages of a fintech startup, such as a modern cloud- and API-based tech infrastructure and agile operational processes.

One key outcome of this endeavor was the creation of Unquo, a new digital banking offering targeting self-employed entrepreneurs:

UNQUO Banking app. Source: Unquo.com

Having built up a successful greenfield environment with SEBx, the bank additionally decided to launch new apps for younger generations on top of the new platform, i.e. creating a  dedicated team that could leverage the new infrastructure and operational processes of SEBx. Next to having built the new standalone banking proposition Unquo, serving an internal SEB need by launching banking apps oriented towards younger users, SEBx also got a deal with Axel Johnson, a leading Swedish family-owned group, with a major footprint in Food, and with businesses spanning across sectors, who is building on SEBx’ banking stack to launch integrated banking products. Due to its success, SEBx decided spin out the offering, now called SEB Embedded and headed by Christoffer.

Embedded finance is a natural trajectory: If banking becomes readily available as a service, why would that not accelerate? It opens up for the whole verticalitisation of banking.

If you’re curious about the key reasons for brands to integrate financial services through a Banking-as-a-Service provider that Christoffer encounters most often as well as the essential success factor that got SEB Embedded off the ground, listen to the episode above.

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