Why Do Embedded Finance Tech Providers Exist?

Embedded finance is the technology that allows companies to “connect” to a bank’s systems.
Headshot of Remy Carole
Remy Carole
Chief Operating Officer
June 13, 2024
Why do Embedded Finance Providers Exist

Why do we exist? When I say we I’m talking about Treasury Prime, but I’m also talking more broadly about companies like Treasury Prime and the role we collectively play as technology providers to banks. 

We provide software to banks so they can more easily run and manage embedded finance programs that integrate financial services like payments and lending directly into non-financial platforms or products. Consider how Shopify, a commerce management system, partners with several financial institutions to offer customers free business financial services, including banking, bill pay, and lending. This makes it easier for small business owners to efficiently manage their finances and expenses from a centralized hub.

That’s embedded finance at work — it enables companies to enhance customer experiences by offering seamless financial solutions in tandem with other services. 

A big part of embedded finance is the technology that allows companies to “connect” to a bank’s systems. Our platform includes developer friendly APIs that can be used to perform various financial actions like opening bank accounts, issuing cards, or sending wire transfers. 

The Evolution of Bank Technology Partnerships

Over the years, I’ve been asked by both large financial institutions and tech savvy companies why they wouldn’t just build either an API platform or a direct integration into bank systems themselves. I usually tell them, “You can do whatever you want. But how much time do you have, how many resources do you have, and how committed are you to supporting this technology indefinitely?”

There are some banks that have built out an embedded finance platform of their own, and some of the larger fintechs integrate directly into their partner bank’s systems. However, these examples are few and far between. They take a lot of time and effort on both sides—on the order of 18+ months and investments in the millions. Banks and fintechs with the most established solutions got started before companies like Treasury Prime existed, so they didn’t have any choice but to forge their own path.

But that doesn’t mean others should have to do the same. 

The Treasury Prime team has collectively worked on solutions that enable streamlined integrations between banks and fintechs since 2013. The seeds were planted at Standard Treasury and then Silicon Valley Bank before we launched Treasury Prime, where we’ve been helping banks partner with the right fintechs for more than six years.

During this time, experience has taught me that banks aren’t tech companies—and they shouldn’t have to be. They serve their customers best when they focus on creating and delivering innovative financial products. And the reverse is also true of companies looking to offer financial services. Banks have already perfected financial offerings. Why should other companies try to reinvent the wheel?

How We Go Beyond Basic Integrations

Treasury Prime’s mission is to modernize banking in the U.S. That means our solution must be reliable and scalable to support banks as they grow. To achieve this, we’ve developed software that integrates directly into banks’ core systems so they can connect seamlessly with embedded finance partners.

Why is that important? A direct integration provides a level of insight that isn’t achievable by simply reconciling files on a daily basis. Our solution facilitates real-time money movement within banks and enables them to see transactions as they happen. They can monitor any program intraday and be confident about the activity and the reconciliation.

Beyond integration into the bank’s core, there are several bank systems that need to be connected with the right integrations and workflows to make embedded finance systems work properly. These include payment gateways, transaction monitoring systems, card processors, and more.

Building these connections and maintaining them as systems evolve or are replaced requires ongoing resources and investment. It’s a big commitment for a bank to set up and continuously develop an embedded finance platform. Likewise, it’s a big commitment for partner companies to build integrations that connect to bank systems, and keep those integrations updated as systems change.

This hurdle is why many embedded finance partnerships ultimately fail to get off the ground. So, we made overcoming it our business.

The Need for Specialized Tech Providers

We want to modernize banking by making it simple for banks to extend their services through technology.

If a bank wants to enable companies to embed their services, working with a software company like Treasury Prime just makes sense. If a company wants to offer financial products, working with a bank that has a platform like Treasury Prime’s just makes sense.

That’s why Treasury Prime exists. We create a software bridge so banks and their partner companies can build better products for customers that embed financial services—allowing everyone to focus on what they do best.

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