Panorama: On Embedded Financial Services

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We recently had the opportunity to interview a great visionary - Daniel Schutte, Managing Director, Accelerators Programs at the The Venture Center. Finzly was part of The Venture Center’s accelerator program ICBA ThinkTECH Accelerator, and had a great head start into new horizons from the participation. Here are some snippets of the interview on Embedded Financial Services.

There are a lot of entrepreneurs who are looking at embedding financial services. Do you see that the fear of competition has been dispelled in banks? Are banks adapting to the new demands for fintech collaboration?  

Banks are very open to collaboration with fintechs and most now understand that there is a breed of fintech founder (like Booshan) that understands banking values, understands the obligation that banks have to their customers and shares those same convictions.  We're seeing another wave of innovation in financial services...if the initial disruptive wave was focused around direct to consumer and largely built upon improving the experience of individuals, those customer expectations of a seamless experience are moving into the business market, banks are necessarily at the center of that movement and absolutely listen to their customers.  It is a difficult question to answer specifically because there are SO many things going on as it relates to embedded financial services, or even flat out bank-enabling technology.  Willingness to partner grows by the day across all banks.  

 

Embedded payments is a 7T market by 2030. A lot is going on there. Do you see the bustle in banks in preparation for this?  

We see the bustle in some banks to prepare for this, but not enough given the potential impact of innovations in this area, specifically around things like RTP. 

The ones who are prepared to connect quickly and enable for other things like lowest cost routing rapidly will be the big winners from this movement. 

It will continue to heat up over the next couple of years re: banks adapting to not only embedded payments, but also generally faster, cleaner payments with metadata. Banks are in a position in this case to benefit tremendously from this opportunity.

There is likely still, fairly, some uncertainty around what banks will look like in the coming years.  We are both unbundling and rebundling financial services. Candidly, we don't know what it will look like either, but we do know that banking (even through banks themselves) will take place through myriad ancillary platforms and services, this is the real opportunity for banks, to provide their existing and perhaps some new products via new channels.