What is embedded banking and why does it matter?

In a feature by The Bank Director, BankiFi Americas CEO Keith Riddle, wrote an article outlining the definitions of Embedded Banking and why this should matter to financial institutions across North America.  

You can explore the article in full here, or continue reading to delve into highlights from Keith’s article with The Bank Director. 

Embedded Banking: The latest ‘golden’ opportunity in the industry for banks. 

The fintech space is an ever-changing industry. An industry that can be shifted at the drop of a hat by technological advancements and economic fluctuations. Embedded Banking is the latest phenomena to ‘rock the boat’ of the fintech industry. But what is Embedded Banking? 

“Embedded banking is a model where banks can provide purpose-built digital services to their customers, including retail and small- to medium-sized businesses (SMBs). Embedded banking enables banks to offer a bespoke technology solution through an open framework that can meet the expanding business requirements of their SMBs customers.” – Keith Riddle  

This is not to be confused with Embedded Finance. This involves the ability for businesses to access financial services through a third-party platform which is not a specific solution provided by a financial institution.  

The concept of Embedded Banking is one that should be looked at by financial institutions as a golden opportunity to serve their SMB customers the way they need to and deserve to be served as it places the bank right at the heart of the SMB’s day-to-day running of their business. 

“Embedded banking both helps strengthen an SMB’s technology and its relationship to their bank.”- Keith Riddle 

From ‘Inside Out’ to ‘Outside In’ Embedded Banking 

Embedded Banking is currently undergoing a shift from an ‘Inside Out’ model to an ‘Outside In’ model. When we talk about inside out to outside in, we’re talking about shifting from an embedded banking model that siloes SMB customers, for example, into a separate digital channel; to an ‘outside in’ approach where a financial institution can offer their SMB customers a single, secure environment and a unified digital experience tailored to each customer within this segment.  

“Outside in embedded banking is the perfect solution for banks that want to provide top-of-the-line financial services in a constantly changing economic environment that requires small businesses everywhere to adopt more efficient technology.” - Keith Riddle

Outside in Embedded Banking doesn’t just provide an opportunity for SMBs to manage their financial workflows and grow their business all from one place within the bank’s digital channels. This is also an opportunity for financial institutions to become the ‘front door’ for the SMB vertical and avoid the existential threat placed on them by the expansion of non-bank providers into the financial services space who are currently speaking the SMB’s language. 

To dive deeper into our explanation of Inside Out vs Outside In Embedded Banking, you can download your copy of our latest whitepaper here. 

Book your meeting with Keith 

Of course, the above is just a taster of Keith’s article with The Bank Director, so check out the article in full by clicking here. 

If you’re interested in learning more about our Embedded Banking solutions for financial institutions across North America, get in touch with Keith below.