Executive Interview with Miriam Wohlfarth, Co-Founder and Co-CEO of Banxware and Martin Brinckmann, Head of Small and Medium Corporates at HVB/UniCredit

Introduction

Could you both briefly introduce yourselves, your respective roles, and how Banxware and UniCredit are partnering in embedded lending?

Miriam Wohlfarth (Banxware): I’m the Co-Founder and Co-CEO of Banxware. At Banxware, we enable companies to offer financing solutions directly to small and medium-sized businesses through their existing platforms and customer journeys.
We work with marketplaces, software providers, payment companies, manufacturers and wholesalers. These are businesses that already have strong relationships with SMEs and want to expand their offering with embedded financial services. Our partnership with UniCredit combines different strengths. Banxware brings the technology, integrations and embedded finance expertise. UniCredit brings banking infrastructure, funding capacity and deep experience in risk and regulation. For SMEs, financing should be available where they already run their business. That is really the core idea behind embedded lending.

Martin Brinckmann (HVB/UniCredit): I am responsible for the Small & Medium Corporate segment at HypoVereinsbank in Germany, part of UniCredit Group. Our mission is to support the German SMBs throughout its client journey – with tailored solutions, increasingly digital and embedded along their value chains.
Our partnership with Banxware is a strategic extension of this approach. Together, we are enabling embedded lending solutions where financing is seamlessly integrated into digital platforms. UniCredit contributes its long standing expertise in credit underwriting, risk management, and funding, while Banxware provides the technology layer and data driven orchestration.
The result is a fast, flexible, and fully integrated financing experience for our clients exactly at the point of need.

Embedded Lending: Framing the Market Opportunity

Why do you believe SMEs and micro merchants remain underserved today across Europe, the UK, and the US?

Banxware: A lot of lending processes for SMEs were built for a very different economy.
Today, many small businesses operate digitally, across multiple channels and with very fast business cycles. Traditional lending models are often still relatively slow and document heavy.
And there are different reasons why SMEs remain underserved. For some businesses, especially newer or smaller ones, access to financing is still difficult in general. But even companies with strong banking relationships often run into situations where they need liquidity quickly and traditional processes are simply not built for that speed.
Timing matters a lot for SMEs. If a business needs liquidity for inventory, marketing or cash flow, waiting several weeks for a decision is often not realistic.
That is one of the reasons why embedded lending is becoming much more relevant. Financing moves closer to the actual operations of the business and decisions can happen much faster.

HVB/UniCredit: In Germany, SMEs and micro businesses are generally well served by banks, particularly in established lending relationships.
However, there are specific situations where traditional models are not always fully aligned with evolving client expectations. Smaller financing needs, short-term liquidity requirements or context-specific use cases often require faster, more integrated solutions than conventional processes are designed to deliver.
At the same time, many businesses increasingly expect financing to be embedded into the digital platforms they already use in their day-to-day operations.
This is where embedded lending complements traditional banking – by providing seamless, situation-based access to financing, enabled through partnerships such as the one between HypoVereinsbank and Banxware.

Why are SaaS platforms, marketplaces, PSPs, and fintechs well positioned to distribute lending products?

Banxware: Because they already sit very close to the operational side of SMEs.
These companies see payment flows, revenues, customer activity and business behaviour in real time. That creates a much better understanding of how a business is actually performing.
They also have something banks traditionally did not have in the same way, which is daily interaction with SMEs inside digital products.
And distribution matters a lot in lending. Financing works best when it appears in the right context and at the right moment.
I think this is one of the biggest changes happening in financial services right now. Distribution is increasingly moving into software and digital business environments.

Right-to-Win of Banks in Embedded Lending 

Where do traditional banks still have a strong right to win in embedded lending?

HVB/UniCredit: Traditional banks have clear strengths in embedded lending – and these become even more important as models scale.

• First, we bring deep experience in risk management and credit underwriting across economic cycles.

• Second, we have access to stable and scalable funding, which is essential once volumes grow. 

• Third, we operate within a highly trusted regulatory and governance framework.

The key is not to protect these strengths in isolation, but to deploy them in new digital models. This is where partnerships such as the one with Banxware are powerful: they allow us to combine financial resilience with technological innovation.

Why are partnerships between banks and fintechs becoming increasingly important?

Banxware: Because both sides bring something important to the table.
Fintechs are usually very strong in product experience, integrations and speed. Banks bring funding, regulatory expertise and decades of experience in risk management.

I also think the old discussion around banks versus fintechs is becoming less relevant.
The more important question is who can build products together that actually work well for SMEs.

Embedded lending only scales if technology, distribution, funding and regulation work together properly. That is why partnerships are becoming much more important.

HVB/UniCredit: Embedded lending prime example of how complementary capabilities create added value.

Fintechs are exceptionally strong in technology, speed, and client centric innovation, often with direct access to platform ecosystems. Banks contribute balance sheet strength, regulatory expertise, and the ability to scale responsibly.

When these capabilities are combined in a well governed partnership model, the result is not only better products, but also sustainable business models. For us, such partnerships are therefore not tactical add ons, but a core element of how we want to serve our clients going forward.

What role do transaction, payments, and platform data play in underwriting and risk management?

Banxware: This type of data changes underwriting quite significantly because it creates a much more current picture of a business.

Traditional SME lending has often relied heavily on historic documents and static financial information. Platform and transaction data allows you to see ongoing operational developments instead.

You can understand revenue patterns, customer behaviour, seasonality and growth trends in a much more dynamic way.

That makes underwriting faster and much more automated. At the same time, data alone is not enough. Good lending still requires strong risk management and responsible governance structures. The strongest models combine both.

What are the biggest operational, regulatory, or technical challenges in scaling embedded lending? And how can banks help?

HVB/UniCredit: Scaling embedded lending comes with several challenges.

On the regulatory side, full compliance with requirements such as AML, KYC, and client protection must be ensured. Operationally, the integration of systems and the automation of credit processes remain complex. Technically, the secure and consistent use of data is critical for sound decision making at scale.

Banks can play a central role in addressing these challenges by providing strong governance, regulatory expertise, and resilient infrastructure. Combined with technology partners like Banxware, this creates models that are innovative, robust and scalable.

Maturity of Embedded Lending Use Cases

Which embedded lending use cases are currently the most mature (e.g., working capital, invoice financing, B2B BNPL, MCA/revenue-based financing)?

Banxware: Working capital is still the most established use case because the demand is very operational and very immediate.

Small businesses constantly need liquidity for inventory, supplier payments, growth or short-term cash flow management.

Revenue-based financing also works very well because repayments adapt more closely to actual business performance.

And B2B BNPL will continue growing as more B2B commerce moves into digital environments.

In general, the embedded lending products that work best are the ones solving a very concrete operational need for SMEs.

HVB/UniCredit: The most mature embedded lending use cases today are those addressing short term liquidity needs, particularly working capital and revenue based financing.

These solutions are closely linked to day to day business activity and cash flows, which makes them highly relevant for clients and well suited for data driven assessment within platform environments.

At the same time, we see growing momentum in areas such as B2B Buy Now Pay Later and invoice financing, especially where digital ecosystems create transparency and transaction data that can be leveraged responsibly.

Which verticals/horizontals or platform ecosystems are furthest ahead in adopting embedded lending?

Banxware: E-commerce and payments are still among the most advanced areas because transaction data is very strong and financing demand is very visible there.

At the same time, we increasingly see adoption across vertical software platforms as well.
Hospitality, retail, logistics, healthcare and mobility are all areas where software platforms already play a central role in the day-to-day operations of SMEs.

I think this will become much broader over the next years. Embedded lending will simply become a normal capability inside many business platforms and software products.

Outlook & Closing

Looking ahead 3–5 years, how do you see the embedded lending ecosystem evolving and what role will banks, fintechs, and marketplaces/platforms each play?

Banxware: I think financial services will increasingly move into software and digital business environments instead of traditional banking channels.

Many people still underestimate how much distribution in financial services is changing right now.

Platforms are becoming much more important because they are very close to the actual workflows of SMEs. Fintechs will continue driving technology and product innovation. Banks will remain essential because funding, trust and regulation still matter enormously. What is changing is the role each player has in the value chain. And in the end, most SMEs do not really care whether a financing product comes from a bank, a fintech or a platform. They care whether it is fast, transparent and useful for their business.

HVB/UniCredit: Over the next three to five years, embedded lending will move from a differentiated offering to a standard component of many digital business models.

Platforms and marketplaces will increasingly act as primary access points for financing. Fintechs will continue to drive innovation in technology, data analytics, and user experience. Banks will remain central as risk managers, funding providers, and the regulatory backbone of the ecosystem.

Ultimately, success will depend on how well these players work together. We expect a highly interconnected ecosystem in which partnerships are decisive – and where those who consistently focus on client relevance, trust, and scalability will emerge as long term winners. This is exactly the path we are pursuing at HVB/UniCredit together with Banxware.

Please do not hesitate to contact Charlotte Al Usta at Charlotte@FlagshipAP.com for any questions or comments.