Embedded finance

CMS has advised in the fintech innovation and alternative finance space (finance available outside of traditional financial institutions) for more than 15 years. We have built a specialist Embedded Finance industry team as part of our FinTech practice, providing bespoke advice to a breadth of clients including: lending platforms and embedded finance companies, as well as to institutional investors, UK, European and US banks, and funds that finance embedded finance businesses.

Our clients work with us because:

• We understand embedded finance and how it works for our clients: we have a lot of experience advising clients across a range of embedded finance products including: B2B buy-now-pay-later, B2C buy-now-pay-later, embedded lending and payments, revenue-based financing, income share arrangements, and embedded insurance.
• We understand the upcoming challenges anticipated in the market, in terms of the economic outlook and the substantial changes anticipated in the regulatory environment in the coming years.
• We understand embedded finance clients: we started working with many of our existing clients in this space when they were start-ups or scale-ups. We invest time and effort to understand our client’s business models, what they want to achieve, and their expectations. We have worked alongside them to the public debt and equity markets. We offer a relationship team, not just a transactional team.
• We have the right experience: we know how to guide and support businesses at each stage of their financing needs. For example:
  • we understand that embedded finance fundings require bespoke advice in structuring and documentation – there is “no one size fits all” model (for example, venture debt funding may require a more typical corporate debt security and guarantee package);
  • we work with embedded finance companies at all stages; we have seen quick growth and legal documentation must be flexible to support the requirements of expanding businesses (from friends and family bonds, venture debt, bank debt, through to securitisation structures); and
  • we understand that business innovation in this space requires financing structures that can accommodate it (for example, use of e-money accounts and payment processor arrangements are typical).
• We are leading advisors in FinTech, electronic money, distributed ledger technology, artificial intelligence, cyber security, privacy, and the use of social media by financial institutions.
• We have deep sector expertise: we sit on a number of working groups including those of the European Commission, Financial Markets Law Committee, the British Bankers Association, the Intellectual Property Office, Creative England, and the All-Party Parliamentary Groups on AI and on Blockchain.

We work:

Podcasts

Publications

We regularly publish legal briefings, research reports and opinion pieces. The below feed contains links to some of our most recent embedded finance and fintech publications. If you would like to discuss any of the articles in more depth, please feel free to contact us.

Further reading

• July 2023 - FCA new Consumer Duty
• June 2023 - Embedded Finance: Dear CEO, Butterworths Journal of International Banking and Financial Law
• June 2023 - Embedded Finance: risks, opportunities, and regulatory pathways, The Paypers
• May 2023 - Embedded finance providers: friend or foe?, Financier Worldwide