Finance

The Hidden Risks Of BaaS And Embedded Finance: Inside Apple’s Struggle

Published

1 year ago

June 14, 2023

Press Room

The Hidden Risks Of BaaS And Embedded Finance: Inside Apple’s Struggle

Customer support plays a critical role in succesful fintech partnerships.

getty

The honeymoon between Apple and Goldman Sachs may be over. Recent complaints from Apple Savings customers about their inability to quickly withdraw funds and encountering “rude” customer support staff from Goldman Sachs have awakened the trillion-dollar company to some of the challenges of partnering with a BaaS or Embedded Finance (EF) enablers. For a company like Apple, known for its impeccable customer support, the impact of these complaints could pose a risk to the exceptional customer experience Apple provides its users.

BaaS and EF continue to revolutionize and democratize financial services, and many are taking note. The global embedded finance market valued at USD 65.46 billion in 2022 is expected to grow at a compound annual growth rate (CAGR) of 32.2% from 2023 to 2030. From the surface the benefits are clear; reduced costs, quicker time to launch, out of the box tech, with regulatory and compliance requirements met.

Having worked on both the supply and demand side of BaaS and Embedded Finance, challenges will always arise once the product is live, such as managing edge cases and restrictions on product development, as brands are tied to the BaaS or EF enablers product roadmap.

The Wild Card: Customer Support

Perhaps the most underrated challenge is handling customer support. Founders, CPOs, and CTOs primarily focus on the product and how to achieve product-market fit. They often overlook or do not prioritize the customer support function, which is critical for maintaining customer loyalty and a solid customer experience. BaaS and EF enablers are B2B companies, and their customers are not end-users. Therefore, BaaS and EF enablers tend to have customer success managers or partnership managers rather than a strong customer support team to help query end users problems.

What customers of Apple Savings experienced is not out of the ordinary. Customers who interact with the customer support team of the BaaS or EF enabler often experience waiting periods of days, sometimes weeks. Even when a fintech or brand has an in-house customer support team, sometimes the request is redirected to the BaaS or EF enabler, again leading to long response time and frustrated customers in what can feel like a disjointed experience.

Knowing The Flow of Funds and Compliance Requirements

Another challenge that fintechs and brands cannot escape is the often complex flow of funds model and regulator complexity faced by their BaaS or EF enabler. This is particularly true for multi-currency or multi-market fintechs that use multiple BaaS providers. A recent story involving a business owner chasing the fintech they used for their business account for two months. Funds meant to be returned to the user account, a German IBAN, were instead sent back to the custodial bank, an Estonian bank. It took two months to resolve the issue, without any clarification of what was wrong.

Often, customer support at the fintech and brand are not up to speed with the intricate workings of the BaaS or EF enablers’ partners and regulatory set-up. In Apple’s case, one customer complained about an “absolutely ridiculous experience where Apple Savings wouldn’t let me withdraw to one of the bank accounts on file as it wasn’t the account the funds originally came from.”

Goldman Sachs’ Nick Carcaterra commented on the recent complaints, stating, “The new Savings account for Apple Card users has received excellent customer response, exceeding our expectations. While the vast majority of customers experience no delays in transferring their funds, in a limited number of cases, a user may experience a delayed transfer due to processes in place designed to help protect their accounts. While we would not comment on specific customer interactions, we take our obligation to protect our customers’ deposits very seriously and work to create a balance between a seamless customer experience and that protection.”

The customer’s frustration could have mitigated by providing assurance around the funds, details of why the withdrawal was not approved, and why this is an important safeguard by Goldman Sachs to keep customers fund safe. The Apple user sees this as a massive inconvenience, but in the end, it is done for the customer’s benefit.

How to Create a Win-Win

Working with a BaaS or EF enabler has pros and cons. For any brand or fintech on the path to such a partnership, a customer support strategy should be an absolute priority, and the following points can be considered when building a strategy:

Always opt to staff your own customer support over the BaaS or EF enabler. This allows you to own your tone of voice and ensuring you have a complete handle on the situation. In Apple’s case, the user felt that the Goldman Sachs customer support agent was “lecturing” him, posing a considerable risk to maintaining Apple’s overall customer experience.
Provide the right amount of information when it comes to the flow of funds queries. The perception of “lost money” among customers is highly triggering and concerning. Transparency and ensuring customers that their funds are not lost will be critical to retaining customers who go through this experience. Re-assure them that measures are taken to protect their funds.
Equip your product and customer support teams with the basics of banking. Explain how inflows and outflows of funds work, what parties are involved, and when a potential delay could occur. While this may seem obvious, there often needs to be more knowledge between the product owner at a brand, and the compliance or tech teams of a BaaS or EF enabler.

While BaaS and EF hold immense potential, recent issues between Apple and Goldman Sachs underscore the importance of prioritizing customer support and understanding the complexities of fund flows in such partnerships. By addressing these challenges head-on, brands and fintechs can navigate the embedded finance landscape while delivering exceptional customer experiences.

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Finance

Hyundai Capital Services Marks Another Major Milestone, Launches Hyundai Finance in Australia

Published

3 hours ago

November 24, 2024

Press Room

SEOUL, South Korea, Nov. 25, 2024 /PRNewswire/ — Hyundai Capital Services (“Hyundai Capital” or the “Company”), the financial subsidiary of the Hyundai Motor Group, announced today launch of its finance options for Hyundai Motor Company in Australia. This launch marks another significant milestone for the Company, with Australia being the 12^th overseas financial subsidiary of Hyundai Capital.

Hyundai Capital Australia Pty Ltd (“HCAU”) aims to offer products tailored to the passenger vehicles of Hyundai dealerships and Genesis showrooms in Australia. HCAU has started servicing and providing exclusive financial solutions for Genesis in October. This launch of Hyundai Finance, together with Genesis Finance, marks the beginning of HCAU’s drive of auto financing business in Australia.

Leveraging the global credit ratings of Hyundai Motor Company, HCAU designed competitive rate loan products for its customers and introduced flexible and personalised financial services tailored to each vehicle.

For example, the Guaranteed Future Value* (“GFV”) is HCAU’s premier offering for the Australian market. The GFV loan guarantees a minimum resale value of the vehicle, which enables to lower monthly payments compared with traditional financing, making Hyundai vehicles more accessible with flexible end of term options. When the loan matures, customers can choose to:

Trade-in: the vehicle’s value is used towards repaying the loan. If the trade-in value is higher than the GFV, the positive equity can be used towards a new vehicle.
Keep: pay the GFV amount to own the vehicle outright.
Return: return the car with no further payments, provided it meets the agreed upon fair wear and tear and kilometres driven conditions.

HCAU seeks to lead the auto financing market in Australia with its seamless and convenient digital financing services. With the global IT system developed and implemented by Hyundai Capital, HCAU offers a streamlined, digital finance application process. HCAU has improved the efficiency of its underwriting process through online document submission and system auto-approval functionality. Furthermore, HCAU introduced an AI chatbot service that operates 24/7, enhancing customer convenience to the next level.

“We are proud to introduce our full offering of auto financing products and services to our Australian customers who are already using or looking to purchase a Hyundai or Genesis vehicle at their respective dealerships,” said Hyung-Jin David Chung, CEO of Hyundai Capital. “With our strong partnership with Hyundai Motor Group, Hyundai Capital Australia will offer highly differentiated products and services to meet all of our customers’ needs.”

He added, “Hyundai Capital will continue to expand its business reach in key strategic markets to promote Hyundai Motor Group’s global sales growth.”

* GFV is for approved applicants only and is subject to fair wear and tear and kilometres driven conditions. Applicable terms, conditions, fees, charges and lending criteria apply.

SOURCE Hyundai Capital

Finance

Fed’s preferred inflation gauge highlights holiday-shortened trading week: What to know this week

Published

12 hours ago

November 24, 2024

Press Room

Fed’s preferred inflation gauge highlights holiday-shortened trading week: What to know this week

Stocks drifted higher leading into the shortened trading week that includes the Thanksgiving holiday.

The Dow Jones Industrial Average (^DJI) gained nearly 2% for the week while the S&P 500 (^GSPC) and tech-heavy Nasdaq Composite (^IXIC) added over 1.5%.

In the week ahead, a fresh reading on the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, will highlight the economic calendar. Updates on third quarter economic growth and housing activity are also on the schedule.

In corporate news, quarterly results from Zoom (ZM), Dell (DELL), Best Buy (BBY), CrowdStrike (CRWD), and Macy’s (M) are likely to catch investor attention.

Markets will be closed on Thursday for Thanksgiving, and Friday’s trading session will end early at 1 p.m. ET.

Recent sticky inflation readings have raised questions about whether the Fed will cut interest rates in December and how much the central bank will lower rates over the next year.

Earlier this month, the “core” Consumer Price Index (CPI), which strips out the more volatile costs of food and gas, showed prices increased 3.3% in October for the third consecutive month. Meanwhile, the “core” Producer Price Index (PPI) revealed prices increased by 3.1% in October, up from 2.8% the month prior and above economist expectations for a 3% increase.

On Wednesday, Federal Reserve governor Michelle Bowman expressed concern that the Fed’s progress toward 2% inflation has “stalled” and the central bank should proceed “cautiously” when lowering interest rates.

“We have seen considerable progress in lowering inflation since early 2023, but progress seems to have stalled in recent months,” Bowman said in a speech at the Forum Club of the Palm Beaches.

Read more: Jobs, inflation, and the Fed: How they’re all related

Economists expect more signs of that stalling in Wednesday’s Personal Consumption Expenditures (PCE) release. Economists expect annual “core” PCE — which excludes the volatile categories of food and energy — to have clocked in at 2.8% in October, up from the 2.7% seen in September. Over the prior month, economists project “core” PCE at 0.3%, unchanged from September.

Bank of America Securities US economist Stephen Juneau wrote in a research note that a print in line with expectations will “certainly lead Fed participants to reassess their inflation and policy outlook.”

“That said,” he added, “we still expect the Fed to cut rates by 25bp in December, but the risk appears to be tilting towards a shallower cutting cycle given resilient activity and stubborn inflation.”

On Friday, markets were pricing in a 44% chance the Federal Reserve doesn’t cut interest rates at its December meeting, up from a 29% chance seen a month prior, per the CME FedWatch Tool.

While a holiday-shortened trading week will limit stock action, one of Wall Street’s hottest trades since election night is likely to keep surging. Bitcoin has shot up nearly 50% since Donald Trump won the election as crypto enthusiasts have cheered a changed regulatory outlook.

On Thursday, SEC Chair Gary Gensler announced he will be stepping down on Jan. 20, and bitcoin quickly rose to nearly $100,000 per coin for the first time ever. FedWatch Advisors chief investment officer Ben Emons told Yahoo Finance the rise of bitcoin is another sign of the risk-on mood in markets present since Trump won the election.

“We may not be so much in an environment like 2021 when it was frothy,” Emons said. “This is more about we’re going to potentially really go into a different environment next year with the economy, with faster growth, and more liquidity. [So] then, yes, bitcoin should be trading at higher levels. So breaking $100,000 [per coin] is quite likely here.”

Read more: Bitcoin clears another record: Is now the time to invest?

Wall Street research firms are beginning to issue 2025 outlooks for the equity market. Largely, these reports have been bullish. Research teams tracked by Yahoo Finance have projected the benchmark index will finish as low as 6,400 next year or as high as 7,000.

But as DataTrek co-founder Nicholas Colas pointed out, many of the current targets fall in line with the traditional average annual return of the S&P 500 over the last century. And that roughly 11% annual return rarely ever comes over a one-year period.

“While the mean long run return is a comforting anchor for expectations, much less discussed is that the range around that average is very wide,” Colas wrote. He pointed out that the standard deviation from the 11.7% average annual return is 19.6 percentage points meaning any return from a 7.8% decline to a 31.2% increase could be considered “entirely consistent with historical norms.”

This brings Colas to the true takeaway from Wall Street’s recent bullish calls. It’s more about the direction of the market than the actual projection strategists slap on the S&P 500. And Colas largely agrees with the upside many have been pointing to for 2025.

“The most important issue for anyone invested in the US equity market is the stability of the US economy in 2025,” Colas wrote.

He cited the US labor market’s solid footing, lower interest rates, and an incoming administration that’s expected to bring tax cuts and deregulation as reasons the economy will remain resilient in 2025.

“We remain positive and believe the S&P 500 can rally more than its long-term average over the coming year,” Colas wrote. “The setup going into 2025 more closely resembles exceptionally strong years rather than weak ones. We therefore expect the S&P 500 to gain around 15 percent in 2025, ending the year at 6,840 based on [Thursday’s] close.”

Economic data: Dallas Fed manufacturing activity, November (-3 prior)

Earnings: Bath & Body Works (BBWI), Zoom (ZM)

Economic data: S&P CoreLogic 20-city year-over-year NSA, August (5.20% prior); New home sales month-over-month, October (-1.8% expected, 4.1% prior); Conference Board Consumer Confidence, November (112.5 expected, 108.7 prior); Richmond Fed manufacturing index, November (-14 prior); FOMC Meeting Minutes (November meeting)

Earnings: Abercombie & Fitch (ANF), Autodesk (ADSK), Best Buy (BBY), Burlington Stores (BURL), CrowdStrike (CRWD), Dell (DELL), HP (HPQ), Kohl’s (KSS), Macy’s (M), Manchester United (MANU), Urban Outfitters (URBN), Workday (WDAY)

Economic data: Personal income, October (0.3% expected, 0.3% prior); Personal spending, October (0.4% expected, 0.5% prior); PCE index month-over-month, October (0.2% expected, 0.2% prior); PCE Index year-over-year, October (2.3% expected, 2.1% prior); Core PCE Index month-over-month, October (0.3% expected, 0.3% prior); Core PCE Index, year-over-year, October (2.8% expected, 2.7% prior); MBA mortgage applications, Nov. 22 (0.5% prior); GDP annualized quarter-over-quarter, third quarter second estimate (+2.8% expected, +2.8% prior); Core PCE Price Index quart-over-quarter, third quarter second estimate (2.2% prior); Wholesale inventories month-over-month, October (+0.8% prior); Initial jobless claims, week ending Nov. 23 (213,000 prior); Pending home sales month-over-month (7.4% prior)

Earnings: No notable earnings releases.

Markets are closed for the Thanksgiving holiday.

Friday

Economic data: MNI Chicago PMI, November (41.6 prior)

Earnings: No notable earnings releases.

Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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Finance

Weekly finance Horoscope November 24 to November 30, 2024: Aries find success in investments; Cancer sees long-held goals materializing – Times of India

Published

20 hours ago

November 24, 2024

Press Room

Aries
Though things would get better with time, the first half of the week might not deliver any appreciable cash benefits. Some entrepreneurs could find now to be the perfect time to launch fresh projects. You might pay off a bank loan and even clear outstanding bills. Though be sure to have professional guidance, success is probably in the stock market and speculative projects, so it is a good time to think about major investments.
Taurus
Your financial condition will be strong, which will help you to reach significant targets. This is the right moment to proceed with ideas to buy a new car or house. Some ladies might also buy jewellery. Resolve any money issues with a friend or sibling in early part of the week. It’s also a good time to raise money for your company; entrepreneurs might come across chances to land financial agreements with promoters.
Gemini
Your financial situation will let you make wise selections. You probably will find riches arriving from many different sources. For sound financial management, think about speaking with a professional. Women might inherit land or pay off all outstanding debt. You could also have to budget for your child’s schooling. Before completing any new partnership agreements, business owners should wait one day or two.
Cancer
Today you will find a decent wealth flow. You could realize several long-cherished goals when money pours in. These days you might get a car as well as some electrical appliances. Good time to donate money to a charity is the second part of the day. Investors in stock, trade, and speculative company will make good profits.
Leo
Though there won’t be any major financial issues, you should nevertheless keep careful with your expenditure. Good returns on previous investments will let you employ this money to seize fresh prospects. Some Leos will work out a financial problem with a pal. Talk about money carefully with siblings to avoid possible conflicts. Business owners will be successful in today’s fund raising and clearing of all outstanding debts.
Virgo
You can run with small financial problems that might compromise wise financial decisions. Think of wise trade, stock, or land investments. You can also get an inheritance meant to help with your finances. For money management, speaking with a financial professional could help. A few Virgos will work out a financial dispute with a brother. Later in the day you could perhaps decide to buy a new house or renovate your current one.
Libra
You might have small financial problems, so you should control your expenditure closely. Steer clear of costly goods and be careful while handling money for others. Some Libras can come across family conflicts about land today. You might also donate money for charity, especially in the afternoon. Dealing with assets and investments, be deliberate and patient.
Scorpio
You will not run out of money, which will help you to readily handle daily problems. New commercial alliances will provide consistent financial flow. Your spouse’s family might provide financial help as well as probably approval for a bank loan. Now is a fantastic moment to follow your ideas for trying your luck in stocks or trade.
Sagittarius
Today your financial situation will be strong, which will let you think about purchasing or selling real estate. Donations for charities would be best during the second half of the day. Now is a great time to start trying your luck in stocks, trading, or speculative enterprise. Some women will take care of family finances. Those in business selling technology, fashion accessories, or transportation will find good profits.
Capricorn
Expect financial possibilities today with reasonable returns on past investments. Buying electronic gadgets is best done in the later part of the day. Though you should perform careful study before making any major decisions, think about investing in property or speculative projects. Usually with the aid of their partners, entrepreneurs will find money; clients may pay any outstanding debts, therefore relieving financial burden.
Aquarius
Feel free to buy basics like household appliances. Businesspeople might get money from overseas, and right now real estate is a good investment. Anticipate more costs; so, it would be advisable to see a professional financial advisor. You could also settle a legal matter; the later part of the day is appropriate for giving someone in need cash assistance. Get ready for potential legal issues that can call for a big financial outlay.
Pisces
Today you won’t run across any significant financial problems. Given your means, you could think about looking for jewellery or gadgets. Still, this is hardly the day for speculative business. You could buy or sell real estate; the later part of the day is good for helping a friend financially, provided you make sure the money will be returned right away. Using promoters, business owners will effectively raise money.
This article is written by, Sidhharrth S Kumaar, Registered Pharmacist, Astro Numerologist, Life & Relationship Coach, Vaastu Expert, Energy Healer, Music Therapist, and Founder of NumroVani.