From Transactions to Experiences: Embedded Fintech and the New Era of Banking

Technical Considerations

Older community banks may use legacy systems that aren’t directly compatible with embedded finance solutions. To take full advantage of embedded fintech, you may need to upgrade to newer systems, including a modern, integration-ready core. These platforms make it easier to connect with third-party partners, support new digital products, and eliminate security vulnerabilities of your legacy software.

Regulatory Compliance

You already know compliance inside and out, but embedded fintech introduces new terrain. From data sharing with non-bank partners to managing services through unfamiliar channels, the rules are still evolving. While current frameworks may cover much of what you offer, it’s smart to keep an eye on upcoming regulatory developments. A proactive approach now helps ensure you’re ready when the rules catch up to the innovation.

Partnership Management

Choosing the right partner is one of the most important steps in your embedded fintech journey. Before you start shopping vendors, it’s helpful to clarify what you want to offer and what your current systems — including your core — can support. That way, you can focus on providers that align with your vision and budget.

When it comes to quality control, setting expectations early and choosing a partner who understands community banking can make all the difference. You’ve worked hard to build trust with your customers, and your embedded finance experience should reflect that same high standard.
Finally, don’t hesitate to ask detailed questions about how your prospective partners handle security, risk, and fraud prevention. Especially in lending, you want assurance that the systems behind your offerings are as thoughtful and reliable as your in-branch experience.

Embedded Payments

When customers shop online, whether with national chains or local boutiques, they expect to pay seamlessly. This is made possible through embedded payment APIs that integrate directly into a platform’s checkout process.

For banks, this opens up opportunities to support the rails behind those transactions. By partnering with platforms or enabling these capabilities through an embedded fintech provider, you can position your bank to support your customers’ everyday spending in new ways.

Embedded Banking

This functionality enables customers to store payment details or access digital wallets, thereby streamlining the checkout experience. Apple Pay is a prime example. Customers can make contactless payments in-store or online using saved credentials.

For community banks, embedded banking presents an opportunity to connect with customers across new channels — especially when paired with a flexible core that supports tokenization, digital wallets, and modern authentication protocols.

Embedded Lending

Whether it’s buying a bike or financing home upgrades, customers want the ability to apply for credit in real time, without jumping through hoops. Embedded lending makes this possible by integrating credit decisioning and disbursement into digital platforms.

With the right embedded fintech partnerships and an integration-ready core, community banks can be the trusted lender behind these platforms, offering fast, responsible credit in the moments customers need it most.

Embedded Insurance

Some platforms go a step further by offering insurance at the point of purchase. For example, Airbnb offers travel coverage during checkout.

This is another avenue where banks can support their customers, either as the partner providing the coverage or by facilitating the infrastructure behind the transaction. A modern core helps make these connections seamless, compliant, and secure.

Successful Embedded Fintech Examples

If you’re exploring how embedded finance could align with your bank’s mission and goals, here are a few areas where community banks can (and already do) play an essential role:

• Investment tools connected to debit accounts
• Employer-partnered wage access via specialized bank cards
• Retailer-branded apps with integrated wallets or savings tools
• Marketplaces offering curated financial product bundles
• Embedded cross-border payment capabilities
• Automated regulatory compliance reporting
• Integrated fraud detection and prevention

Many of these opportunities are already being piloted or rolled out in collaboration with fintech partners. Your bank’s role in embedded finance doesn’t have to be limited; it can evolve to fit your values, customer base, and capabilities.

For Your Bank

Community banks that partner with fintech companies or integrate embedded finance into their offerings can diversify and create new revenue streams. Instead of relying solely on traditional loans or in-branch products, your bank can power financial services behind the scenes, reaching more customers in more places with minimal friction.

It also positions you as a trusted partner to fintechs and businesses who want to offer white-labeled financial services. Your name may not be front and center, but your reliability, compliance, and local expertise will be at the core of the experience.

For Your Customers

Customers stand to benefit from speed, access, and convenience. Instead of visiting three different providers to complete a transaction, they can apply for credit, make a payment, and secure insurance all in one place.

These experiences are becoming the norm. By participating in embedded finance, your bank helps ensure your customers are served where and how they want without sacrificing the trust you’ve worked so hard to build.