Will you choose embedded fintech or embedded finance?
Each offers different but important strategies to future-proof your financial institution.
As financial institutions move into a new technology era, they realize that existing innovation cultures are broken. New fintech competitors are gaining market share while banks and credit unions are, on balance, losing deposits.
There’s much discussion within the industry about embedded finance and fintech as a technology strategy but not enough understanding to appreciate it as a future-proofing business strategy. The need to act quickly is essential as new competitors gain ground on traditional financial institutions.
Strategy had historically been around product innovation, then products became commoditized. The shift was then to innovate around service, then service became commoditized, too. Now, FIs must innovate around products and service as the center of the overall strategy.
As a result, they now face existential challenges. The consumption of banking services is increasingly unbundled from the traditional financial services industry. Niche players in mortgage, student lending, small business services and payments have long exposed the slowness of traditional banks and credit unions to respond to changing customer expectations—at a monumental cost.
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