Embedded finance surges: Here’s what credit unions need to know

If it seems like the biggest news and boldest moves in financial services have come from everywhere but traditional banks and credit unions, you’ve spotted the tremendous growth in embedded finance. To help explain why non-financial companies seem to be running wild through industries including payments, credit, and insurance, we asked Karan Maini, Vice President of Banking, Financial Services and Insurance at Persistent Systems to join us on The CU Lab podcast.

He shared with us the many opportunities for credit unions to form valuable partnerships, particularly on the back-end where embedded finance entrants frequently lack the scale and structure to keep up with demand in the long term. I recommend listening to the entire podcast but collected some other highlights from the conversation below.

  1. The embedded finance explosion is fueled by data. Customer data is the raw material that feeds the embedded finance flames. The recent entrants are doing more with alternative and long-overlooked data sources. And those first-mover advantages are helping them sew up market opportunities. For example, Maini points out that everyone had access to the same public homeownership data that Zillow harnessed, but it an aggressive startup to flip that data into a multi-billion dollar real estate enterprise. Non-financial services companies have seized the data advantage and are continuing to capitalize.


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