Tapping into the Potential of Embedded Finance & Embedded Fintech

Embedded finance: the insertion of banking products, such as bank accounts or debit cards, into the suite of existing products commonly offered by fintechs or brands.

Embedded fintech: the insertion of fintech products into the digital banking channel via a platform solution.

Embedded finance and embedded fintech are two developments within the finance space that have enabled a whole new set of solutions for customers. Embedded finance, also known as banking as a service (BaaS), has opened up banking opportunities for many underserved, underbanked communities by allowing for new, targeted banking products to be built. Whereas embedded fintech has enhanced the ease of access to fintech products through a trusted channel like digital banking, giving people and companies the ability to consolidate their portfolio of financial tools.

While each shares the term “embedded,” they are quite different in their strategy and execution. To explore these differences and dive deep into the benefits and challenges of both strategies, Q2 has enlisted the help of Ron Shevlin, Director of Research at Cornerstone Advisors and author of the Fintech Snark Tank blog at Forbes. We’ve put together a joint interview series where Ron holds discussions with leaders of fintechs and financial institutions. Below, we’ve listed each of these discussions and provided a summary of the points they touch on. We invite you to check them out!

Episode 1
Derik Sutton
VP of Marketing at Autobooks

  • The advantage of financial institutions getting fintech services from an embedded fintech perspective instead of directly from the fintech.
  • How superior access to data through embedded fintech benefits financial institutions, fintechs, and end-users alike.
  • Compliance considerations that arise from an embedded fintech relationship and what accreditations financial institutions should look for in a fintech partner.

Watch the full episode here.

Episode 2
Thomas Novak
Chief Digital Officer at Visions Federal Credit Union

  • The fintech partnership results Visions has achieved using Q2 Innovation Studio.
  • Visions' strategy for overcoming the "procurement barrier" with their fintech partnerships.
  • How Visions determined their game plan for core and digital modernization.

Watch the full episode here.

Episode 3
Jonathan Price
EVP of Emerging Businesses, Corporate & Business Development at Q2

  • How Q2 Innovation Studio allows third parties to develop sticky services on top of Q2's digital banking platform, improving the speed and cost effectiveness of reaching the digital banking channel.
  • The types of businesses for whom embedded finance makes sense and the viability of white-label banking as a strategy for financial institutions.
  • What distinguishes the various providers in the embedded finance platform space.

Watch the full episode here.

Episode 4
Tomer London
Co-Founder and Chief Product Officer at Gusto

  • What Gusto is trying to achieve by providing financial products and services to its small business customers.
  • What Gusto has learned about offering financial products that other interested brands should know.
  • How Gusto decided which banking as a service provider to work with given the number of providers in the space.

Watch the full episode here.

Episode 5
Melissa Eggleston
Chief Deposit Officer at nbkc Bank

  • How nbkc determined that embedded finance was a good strategic opportunity for the bank.
  • The methods nbkc uses to determine potential embedded finance partners.
  • Compliance and regulatory concerns that nbkc has faced with its embedded finance efforts and how they overcame them.

Watch the full episode here.

If you’re interested in Q2’s fintech offerings, we invite you to check out this page and to reach out if you have any questions.