Tory Jackson
Head of Business Development and Strategy, Latin America
Galileo Financial Technologies, LLC
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Expert Contributor

Seizing the Moment With Embedded Finance

By Tory Jackson | Mon, 05/09/2022 - 10:00

Consumer financial services are at the core of some of our best moments, from buying birthday gifts to booking vacations to buying a car. Historically, however, these milestones have been significantly distanced from the financial services that enable us to pay for them.

Until recently, barriers to integration have kept financial services separate from the experiences they are meant to enable, especially in emerging markets such as Latin America. By requiring consumers to “switch channels” in order to pay, the momentum built throughout the buying journey is lost and, quite possibly, the sale is jeopardized as well. 

With embedded finance, payments are an integral part of the buying process and fit seamlessly into the consumer journey. This is how we seize the moment. At Galileo Financial Technologies, we work with our clients to understand their own consumers’ needs, and how and when they are met without pushing them out of the buying process in order to pay.

Paving the way for embedded finance solutions is the massive adoption of digital payments in the region. 

A recent study by the World Bank estimates that 11 percent of adults in Latin America, roughly 50 million people, conducted their first digital transaction during the pandemic. While cash is still strong, business lockdowns and shelter-in-place rules compelled consumers to try out digital payments. By the same token, businesses rapidly adopted digital payment solutions to fulfill consumer demand. 

Despite the recent surge, Latin America still has plenty of room to grow in the digital payment sector. Projected growth reflects both the adoption by consumers and the improvement of the payment infrastructure throughout the region. Embedded finance promises to be one of the key drivers of this dynamic growth.

Embedded finance removes friction for consumers, for financial service companies, and importantly, for non-financial services providers. Galileo’s powerful platform and experienced team allow organizations to quickly create sophisticated products without the need for hiring or coordinating their own development teams.

  • For financial services companies: Embedded finance enables traditional and fintech players to develop out-of-the-box solutions while Galileo focuses on providing the technology and tools to make them a reality.
  • For non-financial services companies: Embedded finance provides the opportunity to create greater customer stickiness and new, lucrative revenue streams. An underlying benefit of embedded finance is that it offers ways to monetize without charging customers more, and therefore enables companies to eliminate barriers to adoption of their core offerings. 
  • For consumers: Embedded finance is a key tool for promoting financial inclusion and adoption of digital finance. Trusted services, retailers and other non-financial entities may embed finance into their offerings, thus encouraging even the most reticent consumers to acquire helpful tools, such as credit, insurance or warranties.

Galileo was founded with a strong commitment to empowering digital transformation and digital inclusion. Embedded finance is just one more of the many solutions that foster a more efficient, transparent and seamless solution for organizations and a more satisfying experience for consumers. With more than 20 years of experience, Galileo has the ability to develop modern, easy-to-use solutions that enable innovators in Latin America to realize their most innovative solutions and unleash the power of digital finance throughout the whole financial ecosystem.

Photo by:   Tory Jackson

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