ANEXT Bank taps embedded lending to grow SME credit reach

Workflow data reshapes underwriting as banks move closer to small businesses.

ANEXT Bank is sharpening its small business credit strategy around embedded lending, as digital banks seek to serve cross-border micro, small and medium-sized enterprises within the workflows they already use.

Philip Tan, Chief Financial Officer of ANEXT Bank, said deposits remain important because they give banks the funding base to grow. But he said the bigger question is how banks deploy those deposits.

“Deposits provide the fuel, lending quality determines the returns,” Tan said.

He said not all deposits carry the same value. Banks need stable and sticky funding rather than balances attracted mainly by the highest rates. Sustainable value comes from building a quality lending book based on customer understanding, reasonable capital allocation and support for businesses that can perform across economic cycles.

For cross-border micro, small and medium-sized enterprises, Tan said profitability starts before financing. Business owners are focused on customers, suppliers, inventory and growth rather than banking products.

The opportunity for banks is to understand customer needs earlier and become part of the customer’s workflow. For cross-border small businesses, this could mean supporting collections, payments, foreign exchange and cash flow visibility before financing is required.

Tan said the more closely banks understand how customers operate, the more opportunities they have to support multiple financial needs rather than a single transaction. This is where profitability comes from: becoming relevant earlier, building deeper relationships and creating value beyond the loan itself.

Embedded lending is central to that shift. Tan said it allows banks to meet customers where financing needs arise, lowers acquisition costs and improves customer experience.

It also changes underwriting. Rather than relying mainly on historical financial statements, banks embedded in customer workflows can build a more continuous understanding of business activity. Tan said this can lead to more relevant solutions, better customer outcomes and stronger risk decisions.

But the model also carries a strategic risk. If customers only see the platform, Tan said the platform owns the relationship and the bank becomes a utility behind it.

For ANEXT Bank, the test is whether embedded lending can help banks acquire customers through ecosystems whilst deepening relationships through banking.