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EXCLUSIVE: “The Future of Football” – Nirav Patel, Andaria in ‘The Fintech Magazine’
Andaria CEO Nirav Patel believes embedded finance can truly unlock the fan experience
Embedded finance is one of the biggest topics in fintech and for good reason. Exact figures vary, but one thing is for sure – it’s predicted to grow significantly in the years to come. One McKinsey report suggested that revenues from embedded finance in Europe could exceed €100billion by the end of the decade, far surpassing traditional financial services. Whatever way you look at it, delivering financial products through non-financial entities is the future of finance.
There are numerous sectors this could penetrate, but one of the most interesting is sports, and, more specifically, the world’s largest sporting segment, football. The numbers here are staggering.
In Deloitte’s Annual Review of Football Finance 2024, an independent review of the business of European professional football, revenue grew by 16 per cent in the 2022/23 season to €35.3billion. The ‘big five’ leagues contributed 56 per cent of that. The largest, the English Premier League, had another record year in the 2022/23 season, with revenues from PL clubs surpassing £6 billion for the first time.
Many questions exist around how much of a positive impact this has on the wider footballing pyramid but it’s certainly the case that matchday revenues present a lucrative opportunity for financial services. Fintech writer Jas Shah, highlighted this opportunity himself, pointing out that half of football fans (54 per cent) spend more with brands if they have a loyalty card, while 47 per cent want to see more personalised offers in exchange for their support, according to research from SAP Emarsys.
In a world where brand loyalty is hard to win and easy to lose, Shah also noted how football stands out, with ‘a whopping 82 per cent of football fans remaining loyal to their club throughout their entire lives’. That’s regardless of the team’s performance or changes in personal circumstances. It’s a currency that can’t be underestimated and could be leveraged.
One technology company doing just that with an embedded finance offering focussed on the sports fan is Andaria. It provides the technology required to improve the fan experience and release financial capabilities in non-financial organisations. Founded five years ago, it has been operating as a regulated institution for over three years, in both Malta and the UK, giving it a foothold across Europe, where 229 million people attended matches last season, and in the home of the Premier League.
Andaria’s CEO Nirav Patel is a self-proclaimed ‘Gooner’ who would love nothing more than to combine his experience of being an Arsenal fan with rewards and financial incentives. He also has a lot to say about where embedded finance is heading and how clubs can leverage the true value in this technology through customer data.
Fan data is king
In a nutshell, Andaria uses payments as ‘a conduit to data’, says Patel.
Although fans have long been recognised as a vital and valued part of the club, he believes a lot of sports organisations are poor at segmenting or understanding their own. By gaining more specific data from a transaction in the club store, they can build a more complex picture of the individual, which can unlock other opportunities for them.
“For a club, it gets even more interesting if you look at sponsorships and commercial agreements,” he says. “If a club can segment the client base and say to a potential sponsor, ‘five million of our fans are 25-to-35-year-old, young professionals that live in the centre of London’, you can see how the commercial negotiation for the club becomes a different proposition. And that really starts at payments.”
The question is what does this look like for the fan? As Patel admits, branded cards are nothing new and downloading a new app to gain loyalty points has become a modern, unwanted point of friction. This may not be a problem for a devoted fan but in any case, Andaria’s offering is not a third-party app that a club has to ship out separately.
“We try and minimise disruption to the fan journey by enhancing their existing app… and make using a branded card a more attractive proposition. We have to find a mechanism to keep fans using the card; rewarding loyalty with the club that you follow is a natural choice,” he says.
“A stadium food and beverage stand gets its funds instantly rather than in two or three days’ time, which for a sports club is key”
Personalising the card with completely unique sporting moments is one way to entice fans, although he does acknowledge the desire from most organisations to reduce plastic.
“There are a few things we’re doing in that space including looking at alternatives to plastic such as the rise of the bamboo card. It doesn’t completely negate the environmental element, but it goes some way towards ensuring that clubs meet their CSR value.”
Andaria, he believes, is delivering the real deal when it comes to embedded finance, providing ‘the ability for our client base to offer banking or other financial products to their client base without having to go for a license themselves’. Looked at this way, it is not just offering the technology but taking away the regulatory burdens that come with offering financial products.
“Sometimes embedded finance is used without having any real substance,” says Patel.
Embedding payments offerings in your checkout is one thing and is usually done with the help of a third party. But actually providing a payment card with your own branding, linked to your organisation, as Andaria does, is another thing entirely.
A sports club partner would operate a technical integration, but the day-to-day operation sits squarely with Andaria, says Patel. Then there’s the revenue generation opportunity – which is substantial..
“We give our clients the ability to turn transactions into a revenue generation mechanism by charging that downstream to their client and adding a markup. We’re also focussed on liquidity. What I mean by that is if we’ve onboarded Arsenal, for example, and every Arsenal fan has an account, any transactions that happen between the two sit within Andaria’s network. So it’s peer-to-peer, but also instant.
“A food and beverage stand at the stadium would get its funds instantly rather than in two or three days’ time, which for an organisation like a sports club is key.”
The winning formula
It’s hard to dispute that embedded finance will play a key role in the future but there are some major challenges in the short term, which Andaria is hoping to alleviate. For a non-tech organisation, says Patel, a major challenge is how an organisation absorbs new technology to make this work. One concern might be that they have to tear down what they’ve got and start again.
“Instead, Andaria aims to complement any existing infrastructure with our unique SDK (software development kits) methodology, which allows clubs to absorb our solutions in a streamlined manner,” says Patel. “This removes the need to overhaul their tech infrastructure.”
Assuming they’re won over by the earning potential and they can make it work technologically, Patel believes more sports clubs of all kinds, not just in football, will take up embedded finance.
“It’s a hugely exciting space to be in. The fact that it’s nascent puts Andaria in a very strong position to grow. You can see how you might embed lending into the buying of a season ticket, for example.”
Another reason why sport is so attractive as a financial segment, is its borderless nature. As Patel says: “It creates a language of its own that is spoken everywhere.
“Irrespective of where you’re from, when you‘re at a football match, you know what that feeling is like. And that’s something that we want to harness.”
This article was published in The Fintech Magazine Issue 33, Page 24-25
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