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Tuesday, May 21, 2024

Weavr studies embedded finance in B2B SaaS sector

In a new report, embedded finance expert Weavr, revealed that the majority of business-to-business (B2B), software-as-a-service (SaaS) product managers are gearing up to integrate embedded finance into their strategic plans. Respondents to the study indicated they anticipate this move will provide them with a significant competitive edge in the near future.

Embedded finance, as explained by Forbes in "Embedded Finance: What It Is And How To Get It Right," involves the incorporation of financial services such as lending or payment processing by non-financial companies. This concept has been popularized by major players like Amazon through EMI loan options and companies like Klarna and Afterpay, enhancing the customer experience by simplifying financial transactions.

Reducing customer churn a priority

Weavr's latest report, "The next step for B2B SaaS," offers insights from research the company conducted in February 2024. Researchers surveyed 250 UK-based product managers in the B2B SaaS sector. They found that 55 percent of participants believe embedding finance will give them a distinct advantage. Moreover, 74 percent have plans to include a built-in payment wallet, while 62 percent aim to implement both payment wallets and debit cards. Only 4 percent have achieved their embedded finance objectives so far.

The research also highlighted that 33 percent of chief product officers (CPOs) prioritize reducing customer churn as their top driver when it comes to feature selection. Embedded finance in B2B SaaS products has a range of applications, including employee benefits, expense management modernization, integrated bill payment for IT and cloud subscriptions, and automation of batch payments in accounting tools, Weavr stated.

Alex Mifsud, co-founder and CEO of Weavr, noted the current economic challenges faced by venture-capital-invested SaaS businesses. He emphasized the importance of demonstrating a clear path to profitability to secure renewed funding and attract new investments. Mifsud believes that the mainstream adoption of embedded finance is timely, helping companies unlock customer growth and new revenue streams.

Gaining new customers also essential

According to the research, 25 percent of B2B SaaS product managers reported that embedded finance features would attract new business customers. Over one-third of CPOs surveyed believe these features will also lead to higher revenue per user.

The report predicts that embedded finance solutions will soon become a crucial part of SaaS offerings in business contexts, moving beyond fintech innovators to mainstream non-financial B2B SaaS businesses, fostering user and revenue growth amid economic uncertainty.

The top three reasons cited by B2B SaaS companies for adopting embedded built-in payment wallets include improving user engagement (28 percent), increasing the number of paying users (26 percent), and enhancing revenue per user (25 percent).

Mifsud further stated, "Product managers leading SaaS products are not just following trends; they recognize the value of seamlessly integrating financial services into their software. This strategic action opens new revenue sources. As more SaaS businesses realize the value of becoming powerful distribution channels for B2B financial services, we expect this trend to accelerate."

For more details on the full white paper, visit Weavr's website, www.weavr.io/blog/why-embedded-finance-has-moved-up-the-priority-list-for-uk-b2b-saas-platforms/ . end of article

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