This April, The Fintech Times is focusing on all things embedded finance, the integration of financial services into non-financial products and services. As the space rapidly develops, we look to highlight the latest developments, initiatives and challenges embedded finance has to offer and overcome across the globe. 

Concluding our focus on embedded finance this month, we now turn to the future. Having looked into how embedded finance solutions have impacted various sub-sectors of finance, where could future innovations lead us?

Andrew Martin, CEO of SMEB, a fintech company dedicated to supporting small businesses in the UK, explains just how much of an impact embedded finance could have on the future: “Embedded finance will lead to some amazing innovations such as individualised pricing based on your history, credit rating, and loyalty. It will bring financial freedom to spending while making all activity real-time.

“The financial ecosystem will change dramatically as decision-making will become real-time with no need for deferred decisions. Even our customer support will morph into augmented advisors, enabling the easy and automated utility switching to more suited providers.”

To find out more about the potential impact of embedded finance, as well as the biggest innovations the space could bring to financial lives across the globe, we reached out to industry leaders.

Ensuring ‘a succinct customer experience’

Andy Davies, senior global payments specialist at Endava, also discusses how significant the impact of embedded finance could be: “Embedded finance is set to transform both the payment process and revenue streams for merchants and buyers.

“Last year, EY conducted a survey of 20 global financial technology leaders of whom 94 per cent ‘believe the key to success is the relevance of a financial product in addressing customers’ real-time needs’. Customer centricity will be at the centre of the favoured innovations.

“Through integrating financial services into their offering, businesses are ensuring a succinct customer experience, whether in retail, automotive, insurance, or banking. Consumer expectations are changing, and reduced friction sits at the heart of many consumer buying journeys. In the future, you can expect to be able to park your car and walk away. Through embedded finance models, the car will take care of paying for the space when you leave, like a virtual valet.

“These joined-up approaches to service and finance make it far simpler to gather richer data insights, including customer location, visiting frequency, and their preferred payment method.

“Data collection is essential to the rapidly evolving AI market. For example, AI can be used to analyse activity to automate the prevention of fraudulent activity. We expect to see it play a fundamental role in detecting both fraud and potential security breaches. Looking ahead, it will become a necessity as immediate payments become more widespread.

“Over the next ten years, I predict a continuation of the move towards embedded payments as the new norm. For some markets, it already is. As adoption continues to increase, we can expect to see more options to create extra revenue streams, and innovative tools introduced to protect both consumers and merchants themselves. ”

Unlocking the ‘immense potential’ of embedded finance

Joan McGowan, head of US financial services consulting at analytics platform provider SAS, also explains: “Embedded finance will likely become more prevalent across industries, including e-commerce, health care, travel, hospitality and more, and we can expect to see a continued proliferation of embedded finance solutions.

“GenAI and AI-powered algorithms will drive the most meaningful innovation by enabling institutions to contextually analyse vast amounts of data to offer real-time financial insights, fraud detection, personalised recommendations and inclusivity.

“The Internet of Things (IoT) and wearable devices offer opportunities to further integrate financial services into everyday objects and experiences. For instance, IoT-enabled devices could facilitate automatic payments for utility bills or groceries based on consumption data. Blockchain technology and cryptocurrencies have the potential to make transactions more secure, efficient and transparent. We might see innovations such as decentralised finance protocols integrated into various platforms for lending, borrowing and other financial activities.

“Embedded finance holds immense potential for transforming how consumers and businesses access and interact with financial services. But it will be essential to address challenges such as security, privacy, and regulatory compliance for solution providers, merchants and consumers alike to realise the full benefits and potential of these innovations.”

Looking forward to a ‘brighter, more convenient financial future’

For Denise Johansson, co-founder and co-CEO of Enfuce, the female-led issuer processor, collaboration could be the biggest factor in driving innovation: “One big benefit of embedded finance is how it encourages collaboration between retailers, payment providers, banks and tech companies.

“This collaboration leads to innovative new solutions, pushing a whole range of industries forward and creating individual offerings that are exceptional in their specific area.

“More personalised offers, specifically tailored to our needs, is just the beginning. Banking as a service (BaaS) will empower businesses outside the traditional banking space to provide financial services, sparking innovation in unexpected places like retail, healthcare and infrastructure. It’s safe to say we can expect a brighter, more convenient financial future.”

Open banking driving innovation

Michael Bystrov, chief revenue officer at online payment processor Noda, also explains: “As we look to the future of embedded finance, open banking stands as a catalyst for innovation, driving the development of financial solutions that are more accessible, secure, and tailored to individual needs.

“The integration of sophisticated KYC mechanisms within open banking frameworks will be critical in safeguarding these advancements, ensuring that as financial services become more embedded in our digital lives, they remain secure and trustworthy.

“Anticipating the convergence of AI, blockchain, and IoT with open banking, we can expect a future where financial services are not only seamlessly integrated into everyday activities but are also characterised by an unprecedented level of personalisation and security, made possible through robust KYC practices.”

‘Embedded finance will redefine how we interact with financial service’

Finally, Eugene Krasicki, founder and CEO of neobank Keytom, breaks down which areas are likely to see the most impact: “Embedded finance is poised to become deeply integrated into our daily lives and business operations with several key innovations:

“Financial services will become universally accessible, eliminating banking deserts and financial exclusion. AI and machine learning will tailor financial services and advice to individual needs in real time.

“Smart contracts will facilitate automatic payments and agreements without intermediaries. Transactions will occur seamlessly, with payments made automatically in retail and bill payments.

“These innovations are just the beginning. As technology advances, embedded finance will redefine how we interact with financial services, making them more intuitive and integrated into our lives.”

MANTRA has launched a new incubation programme at the Dubai World Trade Center (DWTC), following an $11million funding round led by Shorooq Partners. The new programme becomes part of MANTRA’s effort to contribute to the Real World Asset (RWA) tokenisation sector, with a focus on the MENA region.

Established in partnership with the leading corporate service provider in the UAE, Virtuzone, the MANTRA Incubator programme looks to help develop emerging projects within the MANTRA ecosystem and in the RWA sphere. MANTRA will provide startups with financial support for development, infrastructure costs, licensing, banking, and administrative services.

MANTRA will select five projects to join the incubator programme, receiving comprehensive support to ensure their successful integration into the MANTRA Chain ecosystem.

Each chosen project will benefit from a seed investment of $100,000. The funds will be allocated from the personal funds of MANTRA’s founder and CEO, John Patrick Mullin, showcasing his deep involvement and eagerness to make the programme a success.

Mullin emphasised the programme’s aim to go beyond workspace provision: “We’re building a holistic platform for innovation in the Web3 space, enabling promising companies to leverage resources, networks, and a nurturing environment in one of the most vibrant crypto scenes globally.”

Alongside the grants, the programme includes the dedicated assistance of an experienced project manager to oversee progress and provide expert guidance, as well as the opportunity to establish valuable connections, and gain access to a network of investors, setting a solid foundation for their future growth and success within the MANTRA ecosystem.

Making Dubai a centre for crypto innovation

Neil Petch, chairman and co-founder of Virtuzone, also discussed the launch: “We have seen the unprecedented growth potential of Web3 companies in recent years, especially in specialised areas such as AI, big data and machine learning.

“As a forward-looking company, we aim to be early movers in this space and build the necessary infrastructure for Web3 start-ups to launch and scale. The UAE envisions having 10 unicorns by 2030, and we aspire to work in unity with the government in realising that vision.”

The incubation journey will commence at the MANTRA offices in Hong Kong, where the teams will spend an enriching month immersing themselves in the vibrant tech scene. The journey will continue in San Francisco, offering another month of exposure to innovative practices and industry leaders. Eventually, the teams will be headquartered in the prestigious Dubai World Trade Center, providing a global platform for the projects to showcase their potential.

Located in the Sheikh Rashid Tower at DWTC, the incubation space is located in the building’s Maktabi business centre covering over 17,000 square feet, reflecting Dubai’s role as a centre for crypto innovation and matching MANTRA’s goals for a vibrant startup ecosystem.

George Hojeige, group CEO of Virtuzon, also added: “Our milestone collaboration with MANTRA and this pioneering incubator project echo our commitment to creating a conducive environment for Web3 start-ups to grow, thrive and scale exponentially. Our vision is to increasingly pivot towards a tech and innovation-driven growth strategy and establish ourselves as a pillar of support for Web3 and fintech development, not only in the country but across the region.”

When SMEs look to trade abroad, they can often find themselves facing management challenges when it comes to organising and ensuring all their accounts in different regions are accurate and working as they should. Looking to alleviate this issue in the UK, WorldFirst, a one-stop digital payment and financial services platform for global businesses, has launched a new e-commerce growth solution.

Called the World Account, the new solution by the payments platform specifically focused on SMEs in international trade brings down the costs associated with making an international transfer for UK firms. Typically these costs which span compliance, FX and payment operations account for two to three per cent of the value of a transfer.

However, with the World Account this is reduced to less than 0.75 per cent, according to WorldFirst industry analysis. This helps SMEs boost their margins to sustain long-term business growth.

Untapped opportunity in cross-border e-commerce

Global trade is expected to grow by 3.3 per cent this year and retail e-commerce sales are expected to grow 8.8 per cent over the same period.

However, in the UK, the Office for National Statistics’ most recent Annual Business Survey of Exporters and Importers revealed that just over one in every 10 UK businesses (11.4 per cent) are involved in exporting. This is a number that had only risen by 0.7 per cent in the preceding three years. When polled by a UK bank, 80 per cent of businesses agreed that exporting is critical to their business’ future.

Bruce Ding, general manager of WorldFirst International Business, notes: “Against this backdrop, there’s an excellent opportunity for many more UK SMEs to tap into the opportunities of international trade. Despite the complexities involved in cross-border e-commerce, with the support of external partners like us, we’re seeing SMEs are increasingly optimistic about the opportunities presented by exporting overseas.”

In 2022, the total cross-border e-commerce market in Europe, including the United Kingdom, amounted to a turnover of €265billion (excluding travel). Of this total, €167billion, or 63 per cent, was generated by marketplaces. However, European countries are falling behind compared to those across South America and Asia, where multiple markets have seen significant growth in e-commerce sales, according to eMarketer.

Younger generations drive cross-border e-commerce

WorldFirst finds that more than 50 per cent of sellers using its cross-border e-commerce solution are Gen Z or Millennials. This suggests these generations of business leaders are more aware of global e-commerce opportunities.

Ding adds: “Consumers are increasingly buying directly through SMEs’ websites, online marketplaces and social media platforms. This means people are purchasing from businesses located across the globe without even realising they’re doing so. Younger business owners have spotted this opportunity to run their independent e-commerce stores or set up fronts on global e-marketplaces.”

However, challenges, ranging from the complexity in international payment and foreign exchange, payment fraud, and hidden service charges, still put away aspiring business owners, threat survival of start-ups and undermine durability of existing businesses.

To help solve these challenges, UK SMEs can streamline international operations by partnering with external vendors. UK business owners can open a World Account within minutes to be able to trade like a local around the world. The account supports payment collection with 14 local or cross-border accounts and pay-out in more than 40 currencies to over 130 countries and regions. WorldFirst’s extensive partnerships with key e-commerce platforms facilitate seamless cross-border transactions.

WorldFirst has a strong track record in driving growth in e-commerce for SMEs. WorldFirst is the top payment service firm by transaction volume for China-based e-commerce businesses which sell on international e-marketplaces, such as Amazon and Lazada. In January 2024, new customer acquisition by WorldFirst in South-east Asia increased 16 times and the overall transaction volume of its customers in the region grew by 90 per cent on year.

Bitget, the cryptocurrency exchange and Web3 company, has launched a zero-fee trading campaign for BTC/USDT and ETH/USDT spot trading pairs.

The campaign will last two months, in which, both makers and takers for BTC/USDT and ETH/USDT spot trading pairs will enjoy zero fees. Additionally, this Bitget zero-fee trading extends to various trading activities, including spot trading, trading bots, and spot copy trading.

“We’re excited to introduce this zero-fee activity for BTC/USDT and ETH/USDT spot trading pairs,” said Gracy Chen, managing director of Bitget. “As cryptocurrency markets continue to recover and evolve, it’s crucial for us to provide innovative solutions that empower traders of all levels. By eliminating fees for spot trading, we hope to encourage more users to explore the exciting world of cryptocurrencies.”

The announcement of the campaign follows the milestone achievements of cryptocurrencies as both bitcoin and ethereum both broke their previous record values. Additionally, the launch comes as the world responds to the ethereum dencun upgrade and prepares itself for the bitcoin halving. This initiative not only commemorates the historic milestones of BTC and ETH but also endeavors to accelerate mass adoption and reduce entry barriers for new traders.

“This campaign not only benefits existing traders but also opens doors for newcomers who wish to delve into cryptocurrency trading without worrying about transaction fees. By removing barriers and offering a user-friendly trading environment, Bitget is dedicated to fostering a thriving and inclusive crypto community”, said Chen.

Payments are arguably the face of fintech. When you think about financial technology, it is easy to think about solutions which are making payments faster, easier and more accessible.

With so much potential for different technologies to leave a mark on the paytech industry, we reached out to industry experts to find out what they believe will become the next big payment trend.

Artificial intelligence

For Paul Harrald, CFO of Curve, the financial payment super app, it is hard to look past artificial intelligence (AI) as the next big trend for the space. He explains: “AI is the next big payment trend.

“It will improve the efficiency of payment companies by eliciting patterns from payment data. This will allow a great deal of customer personalisation and improve the overall payment experience. An example of this is fraud detection, which has been well-modelled by AI (deep learning) for more than 20 years.

“Most fintechs are very well placed to avail themselves of the opportunity of generative AI. This is because they tend to be microservice-designed and natively digital. Fintechs have long embraced agile methods, which favour rapid and continuous deployment, meaning they are likely to be first to try out and optimise, and while always subject to nascent regulation will be well placed to shape this regulation.

“More importantly, the typical architecture a fintech adopts will allow customisation and personalisation at customer level; in effect, fintechs can supply operating systems in which customers develop their UI. This can be profoundly difficult in monolithic and highly production-focussed environments, whereas a fintech whose essential role is offering its products via a UI, and who spends a great deal of time in that UI, will naturally see how to allow its customers to do the design work. In this regard, fintechs often have tech-savvy customers which may help adoption.

“In this way, fintechs that allow their customers to design what they see as beautiful, those who allow customers to choose the tone of voice with which they are addressed, and who provide choice and convenience wrapped up in customisation, will undoubtedly prevail as they will dominate in all aspects of the customer experience.”

Open finance driving innovation

Pedro Batista, VP of payments at Payhawk, the business spend management firm, explains how open finance could lead the key to the next leap in innovation: “In 2024, we will see an explosion of innovation in payments driven by open banking and open finance regulations.

“As third-party providers gain more access to financial data, new financial services will emerge that leverage transaction data to offer personalised insights and value-added services to consumers and businesses.

‌”For SaaS companies like us in the spend management space, this will enable new product capabilities that seamlessly integrate payments with financial planning and cash flow management. For example, we will be able to analyse historical transaction data to predict future spending, identify wasteful spending and automatically take action like cancelling unused subscriptions or re-allocating budgets. Machine learning will enable our spend management platforms to get smarter and more personalised over time.

“Real-time payments will become the norm, allowing businesses to optimise cash flow in 2024. Our platforms will leverage real-time data to provide dynamic insights into organisational spending and liquidity. This will support faster, data-driven spending decisions and allow us to offer premium services like flexible reimbursements, instant spend notifications and daily spend reporting.

‌”Stronger partnerships between fintechs and banks will further accelerate innovation. As a scaling fintech, we are uniquely positioned to collaborate across the payments ecosystem – from processors to banks to regulators – to shape the future of Intelligent Spend Management. Our open and configurable platforms will enable rapid deployment of new innovations in spend analytics, payments and cash flow management as they emerge.”

Addressing back-end challenges

Jon Knott, head of insights at Dojo, the card payment solution provider, also had his say on the next big paytech trend: “After the pandemic saw companies shift to digital, businesses increasingly looked towards new and innovative payments services – from QR codes to open banking – leaving many with ‘patchwork quilt’ payment infrastructure and challenges around data integration.

“With the speedy roll-out of new systems and applications, businesses are struggling to join disparate technologies, resulting in challenges around accountancy and tracking of finances, as well as operational inefficiencies across their organisation.

“This year, we encourage businesses to uncouple their electronic point of sale (EPOS) and payment systems as the first step to achieve a more seamless payment infrastructure, something Dojo enables.

“Not only is this advantageous for security and data protection, but it also allows businesses to take advantage of innovative products and specialist providers an all-in-one system may not supply, as well as significantly reducing the risk of downtime by relying on one provider.

“We anticipate more businesses addressing such back-end challenges to integrate their different payments systems, boosting efficiency of the business and ensuring higher quality data and insights that can inform decision-making processes moving forward. Such insights will help them focus on what’s most important – delivering an even better experience for their customers.”

Tap-to-pay technology becoming ‘truly embedded’

Richard Carter, CEO and co-founder of Lopay, said: “2024 will be the year tap-to-pay technology becomes truly embedded in the way small businesses and sole traders take payments.

“Millions of people already manage their entire life through their smartphone, so for mobile devices to become the primary way we pay for things seems like a natural evolution. The change is already underway. Official data from UK Finance shows that in 2022 30 per cent of adults were registered with at least one mobile payment service, with that figure climbing to over half among the under-35s.

“This year we’ll see the technology be embraced beyond these primarily young early adopters. For consumers, the ease of paying for things by just tapping their phone onto a merchant’s phone makes the appeal of tap-to-pay obvious. But we’ll also see a big shift among businesses, for whom tap-to-pay removes the need for cash, cards, card readers or tills, reducing their costs and streamlining the sales process.

“Rewards and expense programmes are set to shake up the paytech industry in a big way, as payment platforms start enabling merchants to not only take payments, but spend their earnings and accrue rewards points for redemption on tailored deals and offers. It’s an approach that adds value for their users while expanding traditional payment platforms into full digital wallets.”

‘Several megatrends’ in the future of paytech

Funmi Dele-Giwa, general counsel and head of governance at Onafriq, the omnichannel payment network, explains which trends could be the next to make a big impact on the space: “In the last few years, the payments industry has gone through significant transformation.

“New technologies that drive innovation have been introduced and fintech began to move into the mainstream financial services space. Many fintechs challenged the incumbent payment players through the use of advanced technology and by focusing on solving real customer pain points.

“Looking forward, there are several megatrends which will likely continue to drive dramatic changes in the payments industry. Digital currencies will continue to challenge the status quo and will likely spearhead new products, services, and channels.

“Artificial Intelligence and the ability to mine and utilise all the data associated with running a payment business will play a more and more important role in the near future, especially in areas such as risk, compliance and KYC. Finally, enhanced regulatory oversight will require payment players to mature in their regulatory approach and invest in their regulatory compliance environment.

“Although many of the payment trends are global in nature, the impact they have differ from market to market. On the African continent, where we operate, the new trends in payments facilitate financial inclusion at scale while across the more developed world, payment trends are typically those that enhance already existing payment methods – making them faster, simpler and more transparent.”

Stablecoins

According to Dr Paolo Tasca, founder of the Centre for Blockchain Technologies at University College London, stablecoins may well emerge as the next payment trend: “The next big paytech trend in 2024 will absolutely be stablecoins, as they will be utilised for institutional payments.

“The creation of unified payment networks like the Unified Payments Interface 2.0 and the ‘buy now pay later’ offers.

“Developed markets have the issue of ‘what’s good enough’ versus the leapfrogging in emerging economies (like China jumping straight to cash). Digitisation in emerging economies is threatening the dominance of payment networks in the Western world, which is not upgrading itself as fast.”

Joe Anhalt is a New York-based copywriter turned designer turned all-around marketer. He consults with direct-to-consumer ecommerce companies on growth strategies, including branding.

He emphasizes storytelling and conveying a brand’s point of view. “You can bring shoppers into your world,” he told me. “Brand-building is like world-building.”

He addressed multiple growth tactics in our recent conversation, including marketing channels, design essentials, multichannel selling, and, yes, the importance of the brand.

The entire audio of our discussion is embedded below. The transcript is edited for clarity and length.

Eric Bandholz: Tell us your story.

Joe Anhalt: I ran growth and marketing for six years at Koio, a direct-to-consumer luxury footwear business. I’ve recently left the company and have been doing freelance growth-marketing consulting for smaller DTC companies, from $3 million in annual revenue to $50 million.

It’s been fun being on the other side. I’ve only worked in-house at brands throughout my career.

I started as a copywriter, studied advertising, and minored in film in school. I’ve always gravitated towards the arts, specifically the visual arts, whether it was still photography or video. I loved it, and I still do. But as a copywriter at an early-stage tech startup, I evolved into search engine optimization, email marketing, social ads, and content marketing. That morphed into a generalist growth marketing hacker.

Bandholz: How do entrepreneurs manage the design aspects of their business?

Anhalt: First, founders have to set expectations. They must lose their ego and admit they’re not creative or design experts. Suppose you have a finance or consulting background and are trying to build a brand. In that case, you should educate yourself and experiment. There is a level of talent with creatives and art, but a lot of that you can learn. You can learn taste, style, aesthetics, and simple things like composition, the rule of thirds, coloring, storytelling, and depth of field, all of which you can learn in a cinematography or photography class.

You can start going to museums and learn about the history of art. I’m blessed to live in New York City. I can go to the Met or the Whitney. Every city has beautiful art. You must keep learning to succeed and acknowledge that you’re behind the design eight ball, but you can learn and tackle it like any other school topic or business challenge.

I encourage people who are less skilled in creative or art direction to start educating themselves. The beautiful thing about art and design is that it surrounds us and hits us in the face. A beautiful landscape can inspire you.

Bandholz: Many businesses are trying to save money. How can they produce quality photos or videos affordably?

Anhalt: The iPhone is a good investment if you’re shooting content and want it to be high quality. Lighting is super important. Never shoot midday. The shadows and the light are way too harsh. Location matters. Location, much like real estate, helps improve production value. For example, someone in Austin, Texas, can drive two or three hours west to a remote landscape. It’s similar to Palm Springs or Joshua Tree, where many luxury brands shoot campaigns.

Going to obscure locations and using the natural surroundings and practical effects is a great way to elevate the production value. We were fortunate at Koio because we live in New York City. If you shoot in Tribeca, you slap a logo on the image, and suddenly it becomes luxury. With the iPhone, if you have great lighting, a good wardrobe, and an excellent location, you’ll get 90% of the way there without spending $20,000.

Bandholz: A lot of ecommerce brands struggled in 2023. What marketing channels offer the most opportunity in 2024?

Anhalt: The market is sifting out the winners and losers. There are still many winners. 2024 is about profitability, not growth at all costs.

Facebook and Google ads remain the top channels for growth. There’s a lot of optimism for TikTok, but success there depends on the product category. TikTok could be a home run if you’re a beauty product and your average order value is less than $50. However, higher AOVs have to get creative with channel allocation.

I’m pushing my team to think about visual channels, such as YouTube and television. Those are some of the best places to tell a story. Facebook can drive a ton of data, traffic, and conversions, but I question long-term brand building with Facebook alone.

If you aspire to be a household brand such as Nike or Apple, at some point you’ve got to develop a multichannel approach with retail, wholesale, and collaborations. DTC is a good strategy as a launch, you’ve got to make some bets to be a big player. Give retail a shot. It’s one of the best, if not the best, places to tell your story and your point of view as a brand. You can bring shoppers into your world.

Think about Apple. They’ve built these beautiful retail stores in amazing locations with amazing architecture. Walk in there, and you enter their world.

Brand-building is like world-building.

Bandholz: Where can people hire you, support you, follow you?

Anhalt: My website is AnhaltAdvertising.com. I’m @joefromnormal on Twitter and Instagram. You can reach me on LinkedIn, as well.

One of the most appealing areas for investment in the modern day is in real estate, however, finding a gateway into the real estate investing world can often be challenging. One organisation looking to bridge the gap to entry is Baytukum with its crowdfunding led approach.

With benefits such as low-minimum investments, diversification, automatic investing, and creating saving habits, micro investing is a great first entry point into the world of investments for a complete beginner. However, it also has benefits for seasoned veterans too. Asia Pacific is currently leading the charge for micro-investing with the sector expected to grow by 22.5 per cent CAGR between 2022 and 2032, according to Future Market Insights.

To ensure other regions do not fall behind, startups are taking new, innovative approaches to micro investing. One great example is Baytukum, the crowdfunding platform that empowers, educates, and enables individuals of all ages and income brackets towards financial prosperity by making micro-investments in real estate.

The company is leveraging its mobile app to simplify the investment journey, display portfolio dashboards, returns, and investment history. Baytukum is currently managing the operations of multiple investments and thousands of clients with the capacity of accommodating many more.

 

To get a better understanding of the company, we sat down with Latifa Bin Haider, founder and managing partner at Baytukum:

What specific challenges has BAYTUKUM encountered and how has the company navigated these obstacles to establish a strong presence in the market?

Baytukum is a regulated entity in crowdfunding for real estate investments. There were many steps that we had to take in order to achieve this although there was no guarantee we would be successful.

That was one of the first and major challenges that I faced when starting Baytukum – especially considering it was a two-year long process. Although it was a challenge, it was very rewarding to become regulated as we’re only one of a handful of companies in the entire UAE that are authorised.

Another challenge was raising awareness about crowdfunding. Even though the concept of crowdfunding is very popular in a lot of places, it wasn’t here. During the two years where I was chasing the licence, I hosted many events and workshops about real estate, the importance of personal finance, and crowd funding and how it works. This was because of its nature as a new concept, many people were risk averse and they wanted to understand if it was credible. Therefore, I had to do a lot of awareness sessions just about the concept before even introducing what my company does.

Earning the trust of first-time investors was a difficult hurdle to overcome. Many are investing for the first time ever with us, although the majority reinvest with us after their first investment process. In fact, many have told their families and friends about it. As a result, a large proportion of our clients are actually from word of mouth.

Finding the right team members to help me achieve my vision for Baytukum was crucial. Explaining the job description and how the company works, as well as our roadmap, was a bit challenging because the nature of Baytukum wasn’t very common. However, examining over 500 CVs for each role was worth it as I believe that a team either makes it or breaks a company.

How does Baytukum differentiate itself from other platforms and what unique features and strategies does it employ to attract and retain investors in a crowded market?

Despite many fintech sectors being overcrowded, this is not the case in the UAE crowdfunding market, which I’m very happy about. The way we differentiate ourselves from the rest of the market is by fully embracing the fact we’re a crowdfunding platform. We’re not just another real estate company.

What distinguishes us is our holistic family approach. We make real estate investments accessible and relatable to families. Furthermore, we’re deeply committed to educating our communities. We provide two education sessions per week in both Arabic and English that simplify the nuances of investments and personal finance.

We have a robust customer service team that is always on hand to ensure every question is answered and every concern is addressed. There’s a lot of hand holding in what we do because it works well for us and it is exactly what our clients need.

We have investors of all ages and income brackets, ranging from 18-year-old college students using their savings to invest, to people in their 80s. We’re very proud of this. We also have entire families investing together. Ultimately, we’re not just a platform, we’re a partner for our clients on their financial journey and we’re dedicated to providing an unparalleled quality of service.

How does Baytukum address the challenge of catering to different investors and their needs and expectations while maintaining a cohesive platform and investment strategy?

The most important thing for us is to address potential investors’ fears and concerns, and understand their hopes and dreams about becoming a property owner.

However, there are hurdles. To overcome these, I started the process of meeting up with people either in group settings or in one-on-one situations to understand their goals. Even with roughly 3,000 users today, we continue to meet with each client individually.

The most common issue we hear is ‘I don’t have sufficient funds to purchase a property on my own.’ Furthermore, potential investors are hesitant to take out a loan for a property if it is only an investment and not a forever home. With other issues ranging from fears of scams to monitoring their investment properly, to restricting themselves financially, there are a lot of hurdles that are stopping people from getting involved.

For those that are worried about funds, if they invest one per cent or 10 per cent, they still earn seven per cent back per annum on their investment. This is a better financial decision that leaving the funds in cash form, which lose value over time. Furthermore, buying a share is a one-time payment, meaning users are not left to pay monthly instalments over a long period of time.

If a potential customer is worried about a lack of experience, we have an expert team that manages the properties and is able to find the perfect entry point for each consumer. To help further calm any concerns, customers are provided with all the reports they need conducted by third parties so they can make an informed decision. We are able to show the valuation of the property and how often it is occupied to ensure consumers feel the utmost confidence when investing.

Additionally, each investor is assigned a relationship manager, which caters to needs on an individual basis. Whether they are a first-time investor that needs to be walked through the steps or someone who is already comfortable in the investment space, our team is able to help any need of our customers.

In a micro-investment space, how important is education?

It’s extremely important. It’s one of core values that we follow. We want to be completely transparent with our customers but in order for us to do this, they need to understand what is going on. For example, if we say the average returns are seven per cent, our customers need to know if this is good or not for a property in Dubai.

We do a manual background check in our sessions with clients to understand their level of knowledge in the investment sector. Throughout the customer’s journey, we constantly stay beside them to help in any way that we can to educate them on any concerns they may have.

Education is a very important part of what we do. We help our customers understand the value of investing in having assets and diversifying their portfolio. However, they need to first have a basic understanding of what personal finance is – this is where Baytukum can really step in and help.

How does Baytukum ensure accessibility for small scale investors?

The majority of our clients are first time investors with many dealing with small scale investments. The smallest investment someone can make is 5,000 Dirham, so many of them start with this amount. In some cases, this is all they can afford while for others, it is an amount they feel comfortable testing the waters with. If they enjoy it, they can put in a much bigger chunk in the next property.

We want to democratise access to real estate investments and crowdfunding. When the clients themselves become ambassadors, that’s how you know that you’re doing a good job as a company. Our user base is increasing rapidly by word of mouth more than anything else and we are seeing emerging user groups across the world.

We already have international investors – the app is not limited to UAE residents. You don’t have to even be here to invest.

The next step would be to provide investment opportunities or properties in different countries as well so that their portfolios are not limited to Dubai or UAE properties.

Actor Jonathan Goldsmith, who appeared as ‘The Most Interesting Man in the World’ in an advertising campaign for Dos Equis beer, is reviving his persona to promote Bitcoin (BTC) exchange-traded funds (ETFs) for Bitwise Asset Management.

In a Dec. 18 post on X — formerly Twitter, Bitwise released an ad spot with Goldsmith showing the ‘Most Interesting Man’ in an upscale bar as he often did in the beer commercials. However, rather than saying his signature “Stay thirsty, my friends” over a Dos Equis bottle, the actor had a crypto-focused message for viewers:

“You know what’s interesting these days? Bitcoin. Look for Bitwise, my friends.”

A word to the wise, from a man of few words. #bitcoinisinteresting pic.twitter.com/x5MPbElEev

— Bitwise (@BitwiseInvest) December 18, 2023

Goldsmith appeared in multiple ad spots, portraying himself as ‘The Most Interesting Man in the World’ from 2006 to 2018. The commercials included humorous ‘facts’ about his character, including “he is the only man to ever ace a Rorschach test” and “he’s on the upgrade list for flights he hasn’t even checked into.”

The actor, age 85, revived the character for a Super Bowl commercial in 2019 and a tequila brand, but the ‘Most Interesting Man’ has largely been out of the spotlight for years, with the exception of recirculated memes. His promotion of Bitwise came as the asset manager has a pending Bitcoin ETF application with the United States Securities and Exchange Commission (SEC).

Related: Bitwise announces Ethereum ETF launch on Oct. 2

The SEC has never approved a spot BTC or Ether (ETH) exchange-traded product for listing and trading on a U.S. exchange. The commission delayed a decision on a spot BTC ETF from Bitwise in August, leading to the asset manager amending its application in September.

Large crypto firms sometimes hire prominent figures like Goldsmith to promote their products and services. Although many campaigns are successful, the actors are occasionally subject to lawsuits after a collapse or enforcement action, as was the case with soccer star Cristiano Ronaldo promoting Binance and Tom Brady appearing in ads for FTX.

Magazine: BlackRock revises BTC ETF filing, El Salvador’s crypto citizenship trending, and more: Hodler’s Digest, Dec. 10-16