FinTech
What is embedded finance and why is it growing?
Embedded finance integrates financial services (payments, lending, insurance, banking) directly into non-financial software platforms through APIs. Instead of redirecting users to a bank, the financial product lives inside the SaaS app where the user already is. The market is growing because BaaS (Banking-as-a-Service) providers have made it possible to embed regulated financial products without obtaining your own banking license.
Key Considerations
- BaaS providers (Unit, Treasury Prime, Column) supply the bank partnership, licensing, and infrastructure — you build the user experience
- Revenue model is compelling: embedded finance generates 2–5× more revenue per user than SaaS subscription fees alone
- Compliance responsibility is shared but not eliminated — your platform still has obligations even when using a BaaS provider
- Start with the simplest embedded product (payments or cards) before expanding to lending or deposit accounts
- Regulatory scrutiny on BaaS partnerships increased significantly after 2023 bank partner failures — vet your provider's regulatory standing