Banking has certainly evolved over the last centuries or since its origin more than 4,000 years ago in Mesopotamia but at its core you can abstract banking into three core services (also covered in a previous piece “The Great Unbundling of Banking”). These 3 core services are
- Cash warehousing: Enabling cash to be stored
- Lending: Providing credit to the economy
- Payment: Facilitating the money movement in the economy
In short, cash is either stored, lent out or moved and historically banks have played a major role in those three functions.
Of course there are other related services that banks can provide, especially the larger ones, but if you look at the vast majority of the 4,000 banks currently operating in the U.S. they essentially fulfill and monetize those 3 functions.
What is Embedded Finance?
Now there are Fintechs which are directly providing each of those core banking services via API, enabling payment, lending and cash warehousing services to be embedded into financial or non financial platforms. This is why embedded finance is now at the forefront of Fintech because it enables its reach to a wide audience of builders and users. With embedded finance any platform can provide financial services to generate better services and user experience to their customers. This is particularly useful given how prevalent financial services are in the economy (How would the Uber app be without the ability to pay for your ride inside of it?).
Treasure map of Embedded Finance
Given the rise of embedded finance we did some research in terms of the different players and are happy to share our initial map of the growing Embedded Finance field. This work is in progress so don't be offended if you are not mentioned in here and by all means please reach out as we want to keep improving this map: ben at treasure . tech).
Embedded Cash Management
- Treasure
- Apex *A partner of Treasure
- DriveWealth
- Alpaca
Embedded Lending
Embedded Payment
- Priority Commerce *A partner of Treasure
- Exact Payments
- Astra
- Stripe
- Adyen
- Rainforest
- Ansa
- Checkbooks
- Trice
- Sila
- Dwolla
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