Is embedded finance dead? Ahon Sarkar said your answer depends on where you fit into the ecosystem. Sarkar is the general manager of Q2’s Helix division. Helix works with companies to make personalized banking products.
In news of cross-selling financial products across categories, roboadvisor Wealthfront has gathered a nifty $1 billion of deposit assets for its 2.29% interest-yielding non-bank cash account. Given that the firm has a little over $10 billion in managed investment assets, charges somewhere between 0 and 25 bps on those assets, and took years of wiggly pivoting to get to the current stage, it is fair to consider this influx a big win in terms of client traction. It is also $22 million of annual interest payments. A couple of things come to mind that are worth pulling apart.
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Galileo’s CPO, David Feuer, said AI and improving infrastructure allow financial services innovators to create more responsive products, including in BNPL.
Pinwheel’s partnership with payroll provider Workday company One Source Virtual (OSV) ushers payroll into the same convenience levels as other areas of finance. It will also help banks achieve primacy with their customers.
I dig deeply into the $5.3 billion acquisition of data aggregator Plaid by $500 billion payments network Visa. We examine why this deal is worth 25-50x revenue, while Yodlee's sale to Envestnet was priced much lower. We also look at how Plaid could be an existential threat to Visa, and why paying 1% of marketcap to protect 200 million accounts may be a good bet. Broader implications for product manufacturers across payments, investments, and banking also emerge -- the middle is getting carved out, and infrastructure providers like Visa or BlackRock are moving closer to the consumer.
digital transformationEmbedded Financeenterprise blockchainexchanges / cap mktsmega banksneobankOpen Bankingopen source
·In this analysis, we focus on Goldman Sachs launching an institutional embedded finance offering within Amazon Web Services, and Thought Machine raising a unicorn round for its cloud core banking platform. We explore these developments by focusing on the emerging role of cloud providers as distributors of third party software, think through some of the implications on standalone fintechs and open banking, and check in on AI company Kensho. Last, we highlight the difference between Web3 and Web3 approaches to “cloud”, and suggest a path as to how those can be rationalized in the future.
Pipe is launching a new embedded finance product to help small businesses. Their Capital-as-a-Service product has three launch partners.
Findings from AI-powered tax-filing product april’s 2023 customer impact study suggest customers are receptive to a self-guided, mobile-first process.
This week, we consider the impact of financial infrastructure collapse and who really gets hurt through the lens of Wirecard, Enron, and Lehman Brothers. Yes, there are investors in the entity that will lose value. But there are also clients and counterparties of Wirecard, like Curve, Revolut, and Crypto.com. In the case of Lehman, there was a $40 trillion derivatives notional amount that took twenty years to wind down. We also consider the most recent $500,000 hacking in DeFi of an automated market maker to see if there are common threads to be drawn between the two worlds.
Embedded consumer lending offers many benefits over BNPL. Working with a BaaS provider like Finastra allows banks to control their roadmap.