12 - Fraud, regulation, customer expectations, Kevin McAdam on what it actually costs to scale embedded finance

In this episode, we’re joined by Kevin McAdam, CEO of Andaria, to talk through the realities of building and scaling in embedded finance.

From Andaria’s evolution into a full embedded finance provider to the operational pressures of fraud, regulation and customer expectations, Kevin shares what it actually takes to build trust in today’s landscape.

We get into why partnerships are becoming non-negotiable for growth, where regulation is helping (and where it’s not), and the leadership mindset needed to keep moving forward in a fast-changing industry.

A practical conversation on how businesses evolve, collaborate, and stay relevant as the space continues to shift.

Transcript

SPEAKER_00 0:06

Well welcome back to Tel Talks where we speak to the people shaping our digital economy. Today we're joined by Kevin McAdam from Andaria. For anyone who isn't familiar with Andaria, give us your elevator pitch.

SPEAKER_01 0:19

Well, uh Andaria uh was formed about five years ago and initially started really offering payment accounts, you know, dedicated I bands and what have you. Um and then over the last five years, I suppose what is done is evolved. Okay, so the first thing is that become an EMI both in the UK and in Malta, so offering us the capability for it within the EEA. But then we've we've sort of like uh developed further from that, um which is where I've sort of been involved, which has been very much our cards infrastructure. So we've as well as becoming uh you know payment accounts, we've then moved on to uh embedded finance through basically offering a card proposition. So we've you know gained membership with um Discover, MasterCard, and Visa all principal membership, which has enabled us to sort of then evolve our issuance capability, which has also enabled us to do bin sponsorship. So the company has sort of over that five years has moved from a sort of a dedicated payment accounts really into a fully embedded finance solution.

SPEAKER_00 1:27

I I love how you um you alphabeticalise the schemes there discover, mastercard, and visa. So there's no preference shown here whatsoever. What does being an EMI mean in practice and what what do people sometimes misunderstand about it?

SPEAKER_01 1:43

Well, an EMI in in practice really is it gives uh a company the capability to sort of issue uh towards card programs in very simplistic terms. But what does it really do? It gives credibility to the business, you know, in terms of you know, we have to follow very rigid controls. Uh you have to make sure you've got appropriate steps in place.

SPEAKER_00 2:06

The fraud landscape looks completely different today than it did even two years ago. Uh customer expectations are higher, regulators are firmer, and the liability is shifting. How has Andaria adapted operationally to ensure trust stays front and centre?

SPEAKER_01 2:22

So we're working from a solid base. Fraud has, as you rightly say, changed dramatically. You know, the speed of trying to manage uh the problems out there, how you tackle them. So we we've sort of like um constantly, you know, looked at how can we evolve that, how can we make our our roles uh tighter. So we've got situations, you know, we have a uh an MLRO, we have a compliance head, we have a risk head.

SPEAKER_00 2:51

I mean regulation obviously evolves over time and it's it's it's there to make sure um you know there's trust and safety to to um and end users, consumers, businesses alike. Do you do you think it's do you think regulation's moving fast enough or too slowly or or or just right?

SPEAKER_01 3:10

And I do think actually that that things are moving at a reasonable pace. I just think the challenge is is that there's not enough consistency, you know. So I think that is going to be the the big problem. I mean, obviously different jurisdictions have different ways of operating, but I think I'd like to see regulators be more sort of like collaborating. A lot of you know, yeah, uh and that would really help the industry because at the end of the day, you know, the challenges that we face in the UK are not that dissimilar to what you face in Europe as what not that dimension similar you're gonna face in Asia. So I I think that's quite important, you know, that I would probably say that they are on a uh a you know a a sort of a good position in terms of the way that they're operating, what have you. And generally I think they're in tune with what's going on. But I I just think there's a chance for them to be much more collaborative globally, because this is a globe fraud is a global problem. It's not you know, it's not something that's sort of isolated to one area. Yeah, totally agree.

SPEAKER_00 4:15

Partnerships I think are a must, especially from a from a growth past perspective. How how do you see partnerships shaping the next stage of embedded finance and and ultimately your your growth?

SPEAKER_01 4:28

Well, I think partnerships are absolutely critical. Um, you know, and um first of all, you know, I I feel um, you know, we're very privileged that we have a great partnership with with Telbunny, you know, and they've helped us both in terms of COP and VOP, but also it's very evident on as we move into different verticals. And I think partnerships are essential, you know, and and you know, with w when you go into partnerships, you want to have make sure you're on the same values. You you need to use the expertise that you have in the room and the people that you're working with, and and that will make it successful. So I think I think partnerships are absolutely critical to future business, and you know, and the the the greater the collaboration and the the more that people work, you know, across expertise and support each other, the chances are you've you'll be you'll have a more successful product and a solution.

SPEAKER_00 5:24

100%. Let's let's bring it back to you for a moment. What's what's the biggest leadership lesson you've learned in your career?

SPEAKER_01 5:32

Probably never to be afraid of making the odd mistake. From a leadership point of view, you've got to be prepared sometimes from the front, sort of, you know. You can't be too risk-adverse, you've got to sort of take chances and you've got to look at what's the next big thing that's going to drive your business forward. So I would probably say my learning is that I've been very fortunate across 25 plus years, uh, you know, to sort of work in lots of different companies, different areas, and I've been able to do lots of different things, you know. Um, but I've always looked at the innovation, and sometimes when it's innovation, you've got to take a bit of a risk.

SPEAKER_00 6:10

Yeah, and I mean people often talk about failing fast, so it's it's just it's known when to stop, right? Yes, you know, yes, let's act, let's uh let's pivot, let's evolve, let's do something else. What excites you the most about the next phase of embedded finance?

SPEAKER_01 6:28

Well, I think, you know, uh it it's staggering. I I remember what you know when I first got into prepaid, okay, uh, which it's uh sadly go back to to 2006, is that everything was I remember it took me two years to actually develop something on the web, right? Okay, to actually get something set up. So what I look at now and I think, you know, and at that time, um, you know, we we offered, we produced a prepaid solution with one currency on it, you know, and now you know you look at how fast things have evolved. Now, you know, in the last two years, even things have developed. Um, you know, there's a lot of um talk obviously about AI, how will that influence, how will that change, uh, you know, how will it how will it change behaviour, you know, as well. So I I think, you know, from a payments perspective and from an embedded finance perspective, it's really exciting all the new concepts that you can bring into your proposition. So I think it's about you know exploring those and seeing what's gonna best work and making sure it's value for the customer. There's no point just having a another solution, which actually doesn't add any real value, you know, and also making sure that you don't actually part something into a customer that isn't gonna be what they want. So I think it's about evolving products, evolving solutions, which really excites me. And I and uh, you know, and that's what gets me out of bed. I think you know, this is what's exciting at the moment about you know where we are in our journey in terms of that, you know, we're now at a point where we're actually finally, you know, uh bringing clients on board, the products evolving quickly. You know, that's the sort of thing that's um is is, you know, you do the groundwork, you make sure that's right, but you know, we're now at an exciting stage where it's about how can we evolve this quickly and move and as well and develop new solutions all the time.

SPEAKER_00 8:19

If you could pass the mic to one person in the broader fintech ecosystem, um someone who deserves a spotlight, who would who did the?

SPEAKER_01 8:29

This is a really tough question, uh Rob. I mean, I I I've been very fortunate I've worked with some great people, okay, over the years in lots of different industries, different parts of the world. Um but I think really what makes the payment ecosystem work so well is is the way that people get together, right? So whether I would put one person in front of them, I'd probably put several. Do you know what I mean? Because I think the thing that uh has always struck me about the payment system is is the collaboration, right? Um, you know, we go to events, you know, um, and we see lots of different individuals and what have you, and they've all worked with you in some cases, and it's absolutely fantastic you've networked. People never sort of like lose sight of the fact you've worked with them at some part of your career, and and I so I it's very hard to sort of pick one individual because I've been very fortunate that I've worked with some great people, right? Um uh, but they've all brought different assets to that, you know. And so I would probably have to bring, I don't know, 20 people in the room and say these have all influenced my career, but they've also, you know, been a pivotal part of the payment ecosystem.

SPEAKER_00 9:44

20 people in the room. Let's let's make that happen. Kevin, the thank you. Fantastic deep dive into modern EMI infrastructure, what's coming next. Thanks to everyone for listening. We'll see you on the next episode of Tell Talks.