Leveraging embedded finance in international expansion

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GAT Investment Bank Limited is a global investment banking, securities and investment management firm that provides a wide range of financial services to a diversified client base that includes corporations, financial institutions, and individuals.

Initially offering its clients a global trading platform, it realised the need for a better way to receive and pay-out to our customers. Their solution, GAT Money, was achieved in partnership with Currencycloud, whose APIs facilitated their operations.

SMEhorizon speaks with Jill Murray, Director, GAT Investment Bank, on the challenges developing GAT Money, and the insights gained into developing cross-border and multi-currency solutions. Rohit Narang, VP of Visa Cross-Border Solutions, APAC, also weighs in on the promising nature of embedded finance, and how it can help smaller players take their steps into international markets.

GAT Investment Bank was founded in 2021 with a commitment to serving the Southeast Asian community by transforming traditional financial services to cutting edge platforms, and providing efficient, transparent, and streamlined cross-border payment and settlement. This regional focus created its own challenges. Murray explains that “GAT had initially created a global trading platform allowing its clients to trade in securities on over 30 stock exchanges as well as derivatives and FX.

“With clients scattered all across Southeast Asia, GAT needed to create a better way to receive and pay-out to our customers. We needed to have local pay-in and pay-out capability reducing the cost and time for client money movement.

“We noticed this was not just a problem that we faced, but also saw a massive opportunity to create a product that we could use as well as our client base,” she adds. This led to their development of GAT Money, which offered multi-currency digital wallets, with real time FX conversion and local and SWIFT payout capabilities to 190 countries.

This integration of financial services into existing infrastructure, explains Narang, allows for streamlined operations, essential to meet the needs of modern consumers who increasingly favour seamless payment experiences. “It serves as the ‘missing link’ between SMEs and essential financial services, providing efficient access to essential services like payments, and lending, eliminating the need for multiple third-party providers,” he says.

“By enhancing customer experience, embedded finance enables SMEs to offer tailored financial solutions at checkout, encouraging customer loyalty. Moreover, by utilising fintech-backed infrastructures to conduct financial services such as payment, transaction, conversion and money management, SMEs can offer an array of financial services to serve their customers, without the burden of setting up the necessary infrastructure themselves,” he adds.

Addressing challenges in international expansion

However offering these services is not a straightforward affair. On the challenges faced in establishing GAT Money, Murray recounts that developing banking relationships was difficult, particularly getting documents certified during COVID lockdowns.

“Secondly, because we were a newly formed Investment Bank, we had difficulties around the nesting provisions and getting banking lines created,” she adds.

“The compliance around the onboarding process and showing our systems and controls took a long time becoming a client, and we didn’t want to build our technology to a counterparties APIs until the approval and account opening was complete. We lost a lot of development time waiting for that process to occur.”

These challenges of building connections and infrastructure are similar to those faced by SMEs navigating international trade. Says Narang, “For SMEs engaging in international trade, ensuring regulatory compliance across markets with disparate and complex monetary regulations across different jurisdictions can be challenging, particularly with the wide array of export regulations, tariffs and trade agreements that differ from country to country.

“When it comes to operations, global logistics and supply chain management can present new layers of challenges to SMEs. Managing international logistics, be it shipping, clearance and inventory, will require a deep understanding of the operations, as potential bottlenecks can cause delays and hike costs.”

However, a wealth of technological solutions is now available. Says Narang, “A wealth of technological tools are available to help SMEs with international trade – tools such as multi-currency e-wallets and sophisticated payment tracking systems, exemplified by the likes of SWIFT GPI, make the transition easier.

“These innovations provide immediate access to crucial information, encompassing exchange rates, payment durations, and transaction fees, thereby streamlining the complexities of international trade transactions.”

In this case GAT Investment Bank leveraged the liscensing, technology and global product reach of Currencycloud, their banking technology partner. “Currencycloud had a development team that worked with the GAT developers to connect the APIs quickly, provided feedback on the best way it should flow and helped through the testing and launch phase. Once the development was complete, we were handed over to the account management and support teams who look after us to this day,” says Murray.

Forging strategic partnerships to move forward

For SMEs looking to make cross-border and multi-currency solutions part of their offering, strategic partnerships are key. “Rather than reinventing the wheel, these enterprises can tap into the robust infrastructure of established partners to simplify their international ventures,” says Narang.

“Collaborating with experienced and reliable partners can provide valuable resources and expertise to navigate the complexities of global processes, enabling them to focus their resources on growth and expansion to quickly enhance their competitiveness.”

“With the right alliances, SMEs can effectively navigate global challenges, ensure smooth financial transactions, and enhance their service offerings. This approach not only mitigates potential risks but also positions these businesses for accelerated growth and expansion on the world stage.  

Murray concurs. “Collaborate with established financial institutions and payment providers to leverage their existing infrastructure and gain credibility. Partnerships can also help with navigating regulatory hurdles,” she says.

However providers themselves should also ensure they have a good understanding of the terrain. “Regulatory compliance is crucial in the financial industry, especially when dealing with cross-border transactions,” she advises. “Familiarize yourself with the regulations and requirements in the countries you plan to operate in. Be prepared to adapt your business model and technology quickly to comply with changing regulations in different markets.”

Expansion can also be done stepwise. “Select your target markets carefully. Consider factors like market size, growth potential, and regulatory ease. It may be best to start with a few key markets and expand gradually. Tailor your marketing efforts to each market, considering cultural nuances and language preferences. Localize your platform as much as possible,” she concludes.