Home » Dr Ozan Özerk Explains The Importance Of An Embedded Finance

Dr Ozan Özerk Explains The Importance Of An Embedded Finance

by sambit
dr ozan özerk

With the digital economy growing at a rapid rate, made even more lucrative by the global pandemic, businesses of all sizes are recognizing the importance of digital delivery channels in future-proofing their operations. As more and more commerce takes place online, we now have a huge opportunity to change the way we consume financial services.

Historically, you would only expect to be sold financial service products via a bank. Now you can get a loan from your garden centre, a bank account from your investment platform, or create a virtual card instantly on your phone.

To successfully build out these use cases, embedded finance requires a combination of safe and robust licensing infrastructure, backed by expert compliance knowledge and API-first banking and payments technology. What opportunities does embedded finance offer to digital businesses? What part do large banks have to play within embedded finance?

To learn more, we sat down in conversation with Dr Ozan Özerk, founder of the market-leading global payment and banking-as-a-service platform, OpenPayd. A Norwegian medical doctor and entrepreneur of Turkish Cypriot descent, Dr Ozan Özerk has a long track record of establishing successful businesses in the social media and fintech space.

Q: What is OpenPayd?

Dr Ozan Özerk: OpenPayd uses the latest technology to enable other businesses to access a full suite of financial services via a single API. We provide the infrastructure needed for them to reach the banking and payment services they need, as well as embed those services seamlessly into their services, whether they need them for themselves or their end customers, This is a highly regulated space since you’re dealing with money and financial services, so since we have the proper licencing, we can give merchants a licensed foundation. Not only are we able to help the merchant take payments, but we’re also able to provide merchants with new types of services they can then provide to their consumers.

Q: Could you give us an overview of what embedded finance is?

Dr Ozan Özerk: Embedded finance is basically where you take financial services, and you integrate them into a product or service, which the consumer then consumes. For example, if you’re a marketplace or an airline, you’re taking payment from your consumer at some point in their journey. There are a lot of events taking place in order for that transaction to take place, and there may be some friction. When you embed that product and service into your offering, you reduce the friction, and you increase the success rate of your transaction.

Q: Who gains more from embedded finance? Is it the consumer or the merchant?

Dr Ozan Özerk: Both parties stand to win. As a consumer, you are getting a much better offering at a cheaper price. You spend less time on the payment process and experience less friction. On the merchant’s end, he is able to secure the transaction and ensure that they are making a sale. At the same time, they can also upsell or provide other types of services that are related to their overall offering.

Q: What problems are digital businesses facing with embedded finance?

Dr Ozan Özerk: There are several challenges in the embedded financial space today that make it very difficult for merchants to integrate and operate the way they theoretically should be able to do.

First, it’s a regulated business, so you need to have the proper licenses. Each whoever is providing the service needs to make sure that behind them or as a part of their offering, there is a regulated entity that protects the merchant and the consumer.

Second, you need technology that can keep up with the service you are providing. If you are providing a service that needs payments to happen very fast, but the platform you’re integrating to is very slow, there will be friction between the two platforms that will result in a bad customer experience.

Third, you need to have a provider that understands the need of your business today, and also where your business is going. It is a very competitive market, and by the time you integrate your service and promote it to your consumers, the market may have moved on.

Q: Does this mean that there is room for collaboration between banks and OpenPayd?

Dr Ozan Özerk: Any provider of embedded financial services, like OpenPayd, are taking a step into the turf of the existing payment provider, which is very often, the bank. However, it’s not about competing with the banks. It’s more about what the consumer wants. What does the merchant want to provide the consumers? And how can OpenPayd provide a frictionless event where the consumer can consume these services?

So I see the banks, both on the consumer-facing side as a huge database of clients that we can help provide better services to, but also an important part on the backend, that we need to be able to send and receive money. There is definitely room for collaboration.

Q: Your final thoughts?

Dr Ozan Özerk: Digital-first businesses require digital-first banking. It needs API connectivity, services that are real-time, automated and minimize the need for human intervention. Banking-as-a-Service platforms like OpenPayd will only increase in demand, and we’ll keep driving innovation to support the digital economy’s growth.

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