- Venture capital firm Viola Capital lists Divido as leading company in its new global Contextual Fintech list.
- Viola Capital places Divido alongside big names in its Lending category including Affirm and Klarna.
- In this blog we explain Contextual Finance and how it takes Embedded Finance to the next level.
Embedded Finance took off in the payments space over the last few years. This burgeoning market – set to be worth US$588 billion by 2032 – enables non-financial institutions to offer financial services to their customers. Think making a one-click payment for a drink in a cafe.
But despite its potential, the full benefits of Embedded Finance have yet to be realised. Most existing Embedded Finance offerings incorporate banking and payments into other services via a simple API, yet many do not consider the context in which the finance is provided; they do not change their offering to suit the customer context. It’s what Viola Credit, a leading venture firm, calls, “An offer without a cause”.
This first generation of embedded finance has focussed on what the product can get out of the customer rather than what the customer can get out of the product. The next generation places the customer firmly at the heart of the decision-making process. Enter: Contextual Finance.
A new era of embedded: Contextual Finance
How often have you thought: “I’d like to take out a loan – just for the sake of it.”? Probably never. You’re more likely to consider finance when pursuing an end goal, like taking a cycling holiday with the new bikes you’ve bought, watching television on your new sofa, or sending the children off to school in their new uniforms. Finance enables these things to happen, but it is not the ‘thing’ you’re aiming for, it’s simply a means to an end.
Contextual Finance is about embedding finance in the right place, at the right price point, at the right time. It aligns financial products with the intentions and needs of the customer and recognises that taking out a loan is not always their primary goal.
“The holy grail to creating the ultimate experience is in the intersection of embedded, personalized, and on-time. Or, in a word – contextual,” says Noam Inbar, Partner at Viola Credit.
This is where Contextual Fintech like Divido come in. Our whitelabel consumer journeys offer consumers the finance they need, where they need it, and when they need it. It’s the reason we’ve been recognised among the world’s top Contextual Fintechs by Viola Credit.
Divido’s approach to Contextual Finance
Our approach is simple yet game changing. We facilitate access to retail finance from top-tier lenders seamlessly integrated into the shopping experience, whether in-store with assisted sales or online through web stores. By embedding financial solutions within everyday transactions, consumers get flexible finance for the moments that matter without the burden of upfront costs, lenders get access to a new pool of customers, merchants get a world-leading consumer journey and better sales conversions. It’s a win-win-win.
So, what makes Divido a leading Contextual Fintech?
Divido creates best-in-class retail finance journeys for its whitelabel clients, optimised to boost conversions and basket sizes. We use the latest testing and monitoring tools to analyse pain points, remove friction, and nudge customers through the process, only when necessary. We provide the technology, UX, integrations, and expertise to craft consumer journeys with timely retail finance products, so that consumers get the right finance plan based on the context of what they are buying, where they are buying, and their level of affordability.
Finance Matcher is a great example of Contextual Finance. Sometimes consumers apply for finance with monthly repayments that are not affordable for them. Other solutions would simply decline the customer, but Finance Matcher understands the customer context and gives personalised finance plans that customers can afford so that they can complete their purchases.
“Viola Credit’s recognition of Divido’s as a Contextual Fintech underscores our commitment to redefining the boundaries of traditional lending,” says Todd Latham, CEO at Divido.
“As the financial landscape continues to evolve, the need to contextualise financial services cannot be overstated. It’s no longer sufficient to offer standalone products; instead, the focus must be on delivering personalised solutions that align with consumer objectives.
“I’m thrilled to be recognised for our work in Contextual Finance. The concept captures the true benefit to consumers, where too often embedded solutions focus solely on benefiting companies through improved distribution. Point-of-sale finance presents significant opportunities to empower individuals to finance those moments in life that truly matter.”
Divido has helped some of the biggest lenders and merchants in the UK get started on their contextual finance journey. If you’d like to learn more about what contextual finance can do for your organisation, speak to a member of our team today.
Banks and lenders are great at providing finance, underwriting risk, KYC, and compliance but less adept with technology. It’s faster, cheaper, and better for the lender to use Divido’s whitelabel tech stack than it is to build a solution in-house, plus, there’s much less risk involved. Europe’s most reputable Tier 1 banks and lenders including Nordea and HSCB whitelabel Divido to offer regulated, finance products that are easy for merchants to adopt and convert sales at any point of sale.
Merchants know their products and customers, but they’re neither financial institutions nor technology experts. They must, however, keep up with demands to remain competitive, which means providing a frictionless checkout experience that seamlessly embeds financial products within the checkout journey.
You can find the full article and list from Viola Capital here: https://www.viola-group.com/violanotes/contextualfintech/
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