Top 3 Embedded Banking Strategies from Activate at Money 20/20
Embedded finance can be a dynamic catalyst for growth and was a major theme at Money 20/20. By integrating embedded banking products onto your platform, you can unearth new revenue streams, while also strategically amplifying existing tools. So how does that work in the real world?
Executives from three companies – construction SaaS platform Buildertrend, investing platform Republic, and aviation payments platform Tuvoli – shared how they’ve successfully deployed embedded finance at Treasury Prime’s Activate User Conference at Money 20/20. Here are their top insights:
1. Avoid a single point of failure and switch BaaS providers
Flexibility is key to building an embedded finance solution that can withstand whatever challenges may come your way, said Republic Director of Platform Operations Ally Marrone.
“Don't have a single point of failure, exercise all your options, and keep an open mind about how you can leverage different products,” she said.
That means looking for a BaaS provider that is already integrated with a full spectrum of resources. Treasury Prime’s expansive network of banks and vendor partners were major draws for Republic.
“They have all these additional integrations and they serve as that tether so that you can eliminate and reduce product and back-end work,” Marrone said.
Tuvoli had to learn about avoiding a single point of failure the hard way. Before working with Treasury Prime, Tuvoli worked with another BaaS provider, BBVA. But after the bank was acquired, they shut down the open platform, and Tuvoli had to scramble to find other BaaS solutions. Having been burned by that experience, Tuvoli connected with Treasury Prime, which has the largest network of bank partners in the industry. Now Tuvoli can connect with multiple banks. If something doesn’t work out with one bank or if they want to expand features, they can connect with other banks with the same API instead of building an integration all over again.
“We thought the migration would be a pain but apparently not,” Tuvoli Chief Operating Officer Sandeep Dalmia said. “We went from signing the contract to going live in 60 days if I'm not mistaken. And that was mind-blowing for us.”
Watch to learn more about Tuvoli’s BaaS migration? Listen to the full session: ACTIVATE - Revenue Models of Embedded Finance.
2. Identify revenue sources
Buildertrend aims to evolve from being primarily a SaaS business serving construction companies to a fintech-first organization. To that end, they have used embedded finance to help their customers open bank accounts and accept and remit electronic payments and manage overall cash flow. The platform supports payment rails including cards, ACH, and wire transfers.
“There is a significant opportunity for us to help our customers because we understand them so well in terms of their business workflows, that we can do all sorts of acrobatics when it comes to the way they run their finances,” said Buildertrend SVP & GM of Financial Services Andres Ricaurte.
He added that “there’s no such thing as banking for construction,” which means his company has an opportunity to become truly essential to the multi-trillion dollar industry it serves. Adding financial tools to enhance their construction management software makes their product more valuable to clients and also pulls in additional revenue streams.
“There's definitely the transactional revenue opportunity, whether that's transaction fees, basis points, you name it, and all the financial services revenue upside that you can generate,” Ricaurte said. More importantly, “How do we add more arrows to our quiver to show up and become really mission critical [to our clients] really quickly.”
Republic is an investing platform that curates private investment opportunities with high-growth potential across startups, gaming, real estate, and crypto. Through their platform, investors can pick and manage investments, and founders can raise capital.
“The more payment methods that we have, the more business we foster,” Marrone said. “It's incredible and very important for us to have a partner like Treasury Prime, who understands the needs of our business so intimately.”
Watch to learn more about Buildertrend and Republic’s approach to embedded finance? Listen to the full session: ACTIVATE - Revenue Models of Embedded Finance.
Own your compliance
With their previous BaaS provider, Tuvoli had a different BaaS setup that included a one-size-fits-all approach to compliance. That meant Tuvoli had little power over how long it took customers to open up bank accounts through their app — sometimes, it took up to 10 days. That was upsetting for Tuvoli’s customers, which include aviation companies and high-net-worth passengers seeking private flights.
When the company switched to Treasury Prime, they were able to customize their approach to KYC and compliance.
“Today, we can basically say that we can open a bank account in two minutes,” said Tuvoli Chief Operating Officer Sandeep Dalmia.
The difference was that Tuvoli could work with their partner bank directly on decisioning, bringing in their own expertise and knowledge of their customers.
“The way I see compliance, it's not just about KYC/KYB — it's more about business intelligence. Who are our customers? Our bank knows the customer by the legal entity, their EIN number, or beneficial owner. We know our customers more – where do they live? Or who do they work with? What are the risks involved?” said Dalmia.
Tuvoli worked with Treasury Prime to stand up a compliance program that works with their clientele and business model, to ensure that their customers have a good experience on their platform.
Watch to learn more about the benefits of owning compliance? Listen to the full session: ACTIVATE - Revenue Models of Embedded Finance.
Treasury Prime has the largest bank network in the industry. To discuss how we can help your fintech or embedded finance company scale, contact us here. Want to learn more about our process? View our API reference or play around with our Developer Sandbox.
Want more insight into embedded banking products for B2B SaaS companies? Download our ultimate guidebook.