HSBC has become the latest major retail bank to look to the possibilities of embedded finance by launching a new platform in this area.
The company is partaking in a joint venture with Tradeshift, a B2B global trade network. Christened ‘SemFi by HSBC’, the JV offers embedded finance solutions to the partner’s business clients.
SemFi will rollout in the UK initially, targeting SME suppliers. HSBC aims to offer SME suppliers on e-commerce platforms to access its digital invoice financing services as well as greater flexibility and security in spend management.
Vinay Mendonca, CEO of SemFi by HSBC, said: “Businesses are increasingly looking for seamless financial solutions that are embedded within their e-commerce journeys, so they can access these when and where they need them.
“SemFi by HSBC aims to deliver such embedded capabilities to help businesses grow. It will seek to bring the best of both worlds to our business customers and e-commerce partners; a startup technology mindset coupled with the global scale and expertise of an international bank.”
It is unclear whether the UK is set to be the testing ground for SemFi, with HSBC active in many more countries outside its base location of the UK. Though based in London, HSBC has historic links to east Asia and its banking services are utilised by around 1.3 million businesses worldwide.
The firm stepping up its use of embedded finance via a new dedicated service comes at a time of heightened interest in this financial practice. The firm has cited data suggesting that the value of global embedded finance stood at $82.48bn in 2023, and the sector is predicted to grow by 35% annually over the next five years.
HSBC is not the first and won’t be the last bank to seek opportunities in this space, as the likes of NatWest, among others, have been touting the value of embedded finance for much of this year.
