On May 11, the Fintech Firm FIS and the Banking-as-a-Service startup Treasury Prime revealed through a press release that they are partnering to launch an embedded finance tool. One of the main reasons they cited was the growing need for financial institutions to provide digital banking experiences to their customers, a necessity that is exacerbated by the digital transformation of the global economy.
In their statement, FIS remarked on embedded finance being a key trend in the finance industry, as it allows companies the ability to provide FinTech services through their digital channels such as payments, banking, investments, credit, and insurance.
This news comes just a month after FIS unveiled its Banking-as-a-Service Hub, on April 12. Back then, FIS said this tool would provide institutions of all sizes a full suite of banking and payment capabilities, as well as allow them to configure new financial service offerings with ease.
FIS’ aim with this tool is to provide small to medium-sized financial institutions with the necessary tools to complete, thanks to improved digital banking services. According to FIS’ release, this tool would allow the institutions to provide new methods for managing deposits and accounts payable transactions, as well as other banking functions, remotely and digitally.
FIS’ Head of Payments, Kelly Beatty, stated in the release that embedded finance is growing as a trend due to the way it empowers businesses to quickly implement innovative ideas through the combination of financial services with user experiences. One example she mentioned was how embedded finance allows commercial services like lending and insurance to be handled with the same convenience as regular app purchases.
Beatty also stated that the needs of the customers was the focus of these services. In the release, she said that customer’s expectations could be reached through the integration of financial services into business software, new channels can be created that can reach even more financial services.
On their end, Treasury Prime’s CEO Chris Dean said that the banks that take advantage of these embedded services can become the foundation for a new generation of financial institutions, and that embedded finance could bring them new potential revenue streams.
In the press release, it was also revealed that Grasshopper, a digital commercial bank, would be the first financial institution to use FIS’ embedded services tool.
The market for embedded finance experiences continues to rise, with one study finding that 23% of consumers had used buy now pay later (BNPL) to split large purchases into smaller installment payments at the point of sale (POS).