Rise by Barclays: Embedded finance and the future of fintech

The capacity for fintech to go beyond optimising the status quo and actually help solve pain points, both historic and emerging, is what makes it so exciting. After all, the world has undergone such a profound shift towards digital finance following the COVID-19 pandemic that simply maintaining past paradigms is apt to leave customers alienated and companies uncompetitive. True visionaries focus on the future, and in that spirit, there are few more forward-thinking than Barclays and its latest global fintech platform, Rise.

Rise was established in 2015 as Barclays’ vision for incubating the “ultimate conditions” for fintech’s growth and development. It does this by linking a global community of thought leaders dedicated to challenging industry norms and pushing boundaries. Operating from two physical hubs in New York and London, the venture is able to combine Barclays’ formidable industry expertise with the agile mindset of a startup. Rise has 130 community members and in 2020 conducted more than 600 mentoring sessions and brought in more than 5,500 virtual event attendees. So far, Rise members have raised US$1.31bn in capital.

FinTech Magazine spoke with Mariquit Corcoran, Group Chief Innovation Officer (CIO) at Barclays, about how Rise is helping the bank to identify and work with emerging startups, foster innovation, and develop an exciting trend: embedded finance.

Pictured: Mariquit Corcoran, Group CIO, Barclays

Did you know?

Mariquit Corcoran ranked #11 in our ‘Top 100 women in fintech’ list? 

Solving real-world problems

A highly experienced financial executive, Corcoran first joined Barclays in 2018 and took on the Group CIO role in October 2020. Possessing a talent for strategy and a keen eye for potential, she identifies embedded finance as one of the industry’s most exciting trends. “[It] creates new customer journeys that help solve real-world problems. It allows for seamless experiences that reduce friction and provide customers with more options to pay for goods and services from their favourite retailers.” 

Essentially, embedded finance is the integration of API-driven banking or payments software with commercial services not strictly focused on finance, such as retail. It is re-centring the emphasis from ‘fin’ to ‘tech’ and its effects can be seen everywhere from ride-hailing apps to digital wallets, P2P providers, e-commerce, and more. “There's reciprocity in this, too,” continues Corcoran. The improved customer experience (CX) helps merchants grow their own loyalty, deepen client relationships, and provides data that can be used to personalise CX further.” Indeed, this trend is also facilitating a greater emphasis on specialisation and ecosystem expansion: companies can focus on their core service and select third-party partners to deliver the financial infrastructure.

Subsequently, CX can become faster, easier, and more transparent than ever before. The implications of this are far-reaching and expansive, “embedded finance isn't just in traditional finance anymore; it's impacting all types of industries.” For instance, a recently released report from Rise helps characterise the positive changes that the trend can and is bringing to the music industry from the perspective of two companies, Kobalt Music and DICE. Corcoran explains: “Kobalt helps artists define a basic financial framework to make it easier to predict their financial unknowns. DICE uses embedded finance to simplify and streamline the promotional and performative process, giving musicians access to a quick, seamless purchase system and helping fans discover gigs and artists via a personalised experience.”

Location: Rise NYC

Embedded finance is a powerful tool for placing the payment process firmly in the performer’s hands. “There's real dissatisfaction within the current music industry,” states Corcoran. “Getting paid by concert promoters as an artist or creator can take a long time. Sometimes, even seeing what you're owed is really difficult. The lack of transparency means artists can't budget, and their banks can't rate them for credit.” As the live music industry seeks to rebuild itself following protracted difficulties in 2020, embedded finance raises the possibility for genuine reform. 

It should also be noted that this change is widely applicable to many disparate industries. Another sector Corcoran puts forward as primed for transformation is agriculture: “Startups like FarmGuide in India are embedding intelligence into financial services for the domestic farming community. That data can then be used by farmers, banks, insurance companies, and state governments to model a wide-ranging set of outcomes from crop success to insurance risk on a farm-by-farm basis.” Furthermore, according to FarmGuide’s Co-Founder Ankit Gupta, this data stack can be used to support 140 million farmers, a multitude that would have formerly been underserved or overlooked by the traditional credit industry.

Rise charts the future of embedded finance

In the ‘Embedded Finance: Creating a seamless future for financial services’ section of its report, Rise cites Forbes that embedded finance in the payments sector is worth $16.1bn and could grow to $140.8bn by 2025. This scale, it reasons, can materialise if three criteria are met:

1. FSIs open their core technology stack
2. Fintechs continue innovating and integrating with the broader financial services sector
3. Direct collaboration between fintechs and FSIs

The future of finance

The potential for digital technology to transform finance has, in some cases, been a double-edged sword for some FSIs: the customer benefits are readily apparent, but the shifting dynamic that gives the tech sector a more prominent role has been intimidating. Corcoran declares that this certainly isn’t the case with Barclays, which has “fully embraced” the future hinted at by embedded finance. “Barclays US Consumer Bank recently announced a new strategic partnership with Amount, a leading technology provider for financial institutions, to expand our point of sale (POS) financing suite.” This is a growing market for Barclays and one it is rigorously developing; in the bank’s 2021 Q1 results, Group CEO Jes Staley announced that its contract as POS engine for Amazon Germany is being extended to the UK. This supplements another high-profile partnership the bank shares with Apple UK.

“Barclays also has embedded finance and insurance applications, a work loyalty programme, mobile banking, and we're really leveraging Rise to develop forward-thinking and modern solutions by supporting promising startups and fintechs,” says Corcoran. “Barclays will continue to stay at the cutting edge of finance’s future.” Rise has truly been pivotal to maintaining this philosophy, and in a world where ecosystems are fast becoming dominant players in global finance, its ability to bring leading innovators together is invaluable. 

When she considers the latent possibilities within finance, particularly with regards to embedded finance, Corcoran is adamant that we’ve barely scratched the surface of technology’s power to disrupt and transform the world. It is, in her view, “a true win-win-win scenario for banks, startups, and consumers alike.” The future of finance is set to include improved CX, a new era of rapid embedded finance integration, and a new customer journey that solves real-world problems for consumers across myriad sectors. “Barclays is truly just getting started,” she concludes, “and the possibilities are endless.”

Female FinTech Collective: Rise’s approach to diversity

A staunch champion of diversity within fintech, Rise’s own ‘Female FinTech Collective’ strives to bridge the under-representation for women that continues to blight the sector.

Specific opportunities include:

• The Female Innovators Lab

• Mentorship opportunities with FinTech Friday

• Investment partnership with Angel Academe (an award-winning angel investor network)