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We often hear that “data is money,” but how often do we talk about the fact that money is data?
Is the statement “data is money” equally true as “money is data”? Not exactly. And here’s why: during my days in the telecom industry, I realized that while the global economy relies on the financial ecosystem, the financial industry itself depends entirely on communication networks to move data globally.
Every financial transaction is essentially a data stream. Whether it’s a credit card swipe or a cross-border payment, data is being transmitted across multiple stages and entities, including:
Consider this: the global telecommunications industry processes over 4.3 zettabytes of data annually, much of which enables financial transactions.
Networks like Mastercard, Visa, SWIFT, and local platforms like FedNow, RTP, and Interac process trillions of dollars every year, often faster than the blink of an eye. For instance:
We’re making strides toward a future where money moves as fast as data—but we’re not there yet. Why? The challenge isn’t just in enabling faster data transfer for financial transactions but in making this data accessible and actionable for non-financial stakeholders—the businesses and consumers who initiate or receive transactions.
As digital transformation accelerates, financial transactions are becoming almost entirely digitized. The world is moving away from cash and traditional paper methods. In the U.S. alone, cheque usage has fallen 75% over the last 20 years. In this new age, speed and data accessibility are no longer just competitive advantages; they are survival tools.
Businesses capable of leveraging financial data in real time will define the next era of innovation and customer value.
Embedded finance addresses these challenges by centralizing both business and financial operations within the software applications that businesses already use. It creates a seamless bridge between financial data and operational platforms, enhancing efficiency and accessibility.
To put it simply, embedded finance is the connective tissue between vertical SaaS (VSAAS) and financial platforms.
In financial systems, speed and precision are critical. A one-second delay in financial trading can cost firms $4 million per millisecond, underscoring how crucial real-time data is. Embedded finance leverages automation to eliminate inefficiencies and minimize errors in data movement.
Financial data does not move in a straight line. For example:
Embedded finance simplifies these complexities by unifying disparate systems—banks, accounting software, SaaS platforms, and more—into one cohesive workflow.
The value of time in today’s economy is higher than ever. According to ACI Worldwide, real-time payment systems are projected to drive an economic boost of $285.8 billion of additional global GDP growth by 2028. Businesses that can automate payment processes and deliver near-instantaneous results will retain their competitive edge.
The future isn’t just about innovation for its own sake. It’s about achieving faster, more accurate, and more accessible data movement. Embedded finance plays a critical role here, enabling businesses to access validated, processed data in real time. This empowers smarter decision-making, operational efficiency, and new opportunities for growth.
To illustrate, consider this: A business leveraging embedded finance solutions can save up to 80% of the time previously spent on manual reconciliation, compliance checks, and financial reporting.
Let’s embrace a future where data movement defines success and embedded finance becomes the enabler of speed and accuracy in an increasingly complex world. Together, we can drive innovation, redefine customer value, and build a more interconnected digital economy.
Curious to learn more? Feel free to contact us here.
Why Thinking of Money as Data Changes Everything was originally published by Hamed Arbabi on Medium Dec 27th, 2024.
