Banking Software Innovations

Embedded finance (EF) is the biggest shift in banking in decades. Yet, most banks do not realize that the opportunity is bigger than the threat. This is how to play the game. EF is a game changer because it enables banks to compete in the experiences economy and reposition themselves within the customer journey, as both enablers and distributors. Next-gen consulting house and venture builder DefineX mapped out the new banking playbook: 1. Commercial Partnerships Direct, co-branded agreements with consumer-facing brands (e.g. retailers, airlines) let banks expand reach beyond traditional channels. Example: co-branded cards or loyalty-linked financial products. 2. Plug-and-Play Products Banks offer white-label, pre-built financial tools (e.g. lending, payments) for fast integration into third-party platforms - enabling fast, scalable distribution. Example: embedded checkout loans or instant payout APIs. 3. Bespoke Integrations Banks co-develop tailored financial solutions for specific industries or platforms, embedding deeply into partner ecosystems and building lasting B2B ties. Example: custom APIs for mobility, healthcare, or SaaS platforms. 4. Open Banking: API Aggregation Banks leverage open banking and BaaS rails to aggregate data and initiate payments - becoming enablers of multi-bank connectivity and digital finance tools. Example: account aggregation and payment initiation. 5. Bank-Exclusive BaaS Enablement Banks provide BaaS capabilities internally or to select partners - retaining control while enabling new models and monetizing core infrastructure. Example: BaaS partnerships (fintechs, digital brands). 6. Enablement Platforms (BaaS Providers) Banks commercialize their regulated infrastructure via APIs - powering fintechs and non-banks at scale and monetizing compliance, licensing, and balance sheet. Example: acting as full-stack BaaS providers behind fintech apps. 7. Super App Integration Banks embed services into high-frequency platforms (e.g. messaging, mobility, commerce) or develop their own - placing financial products directly into users’ experiences. Example: powering super apps offering finance layers. Understanding the distinction between BaaS and EF is key: BaaS is the bottom, infrastructure layer that feeds into EF on the outcome, front-end side. Banks can take on dual roles: powering EF via BaaS and embedding their products into third-party platforms. These roles aren’t mutually exclusive - banks can enable others, embed themselves, or pursue stand-alone strategies. But as the DefineX report highlights: many banks haven’t yet defined their role clearly. They invest in APIs, explore partnerships – but often without a cohesive BaaS strategy guiding these moves. Opinions: my own, Source: DefineX - Consulting, Technology & Labs, Banking-as-a-Service: Reconfiguring value chains in financial services – link in the comments 𝐒𝐮𝐛𝐬𝐜𝐫𝐢𝐛𝐞 𝐭𝐨 𝐦𝐲 𝐧𝐞𝐰𝐬𝐥𝐞𝐭𝐭𝐞𝐫: https://lnkd.in/dkqhnxdg

The Symbiotic Relationship Between Open Banking, Banking as a Service, and Embedded Finance In the rapidly evolving landscape of financial technology, three independent but interconnected concepts have emerged as drivers of innovation: 1️⃣ Open Banking and/or Open Finance 2️⃣ Banking as a Service (#BaaS) and/ or other business models incumbents will assume to monetise the opportunity, and 3️⃣ Embedded Finance. These paradigms are creating a #symbiotic #ecosystem that is starting to reshape the entire financial services industry. ⏹️ Open Banking: The Foundation Open Banking serves as the foundation of this ecosystem. It refers to the practice of banks sharing financial data and services with third-party providers through secure APIs. This initiative, often driven by regulatory changes, aims to increase competition, foster innovation, and improve customer experiences in the financial sector. 🔼 Banking as a Service: The Bridge Building upon the #infrastructure of Open Banking, #BankingasaService (BaaS) acts as a bridge between traditional banks and innovative fintech companies. BaaS providers offer a range of banking functions—such as account management, payments, and lending—as white-label services that can be integrated into other products or platforms. This allows non-bank entities to offer banking services without the need for a full #banking license or infrastructure. 🔼 Embedded Finance: The Ultimate Expression #EmbeddedFinance represents the culmination of these trends, seamlessly embedding financial services into non-financial products, platforms, or services. By leveraging #OpenBanking #APIs and BaaS offerings, companies across various industries can incorporate financial products directly into their customer journeys, creating more holistic and frictionless experiences. This symbiosis drives innovation, improves accessibility to financial services, and creates new revenue streams for both incumbent banks and non-financial companies. It also empowers consumers by offering more choice, personalization, and convenience in managing their financial lives. As this #ecosystem continues to evolve, we can expect to see even greater integration of financial services into our daily lives, blurring the lines between banking and other industries, and ultimately reshaping the very nature of finance itself. Arthur D. Little #fintech #payments #insurance #investments #loyalty #savings

I know it's tempting... but loyalty programs don't have to be the default paint-by-numbers points, tiers, and refer-a-friend. Here are four interesting loyalty plays that have caught my eye in the past week. Adore Beauty Group changed its program from Adore Society to Adore Rewards to move beyond being online-only. Surprise, surprise, it included a quarterly gift box, but the differentiator to the MECCA Brands loyalty masterclass is that customers get to choose their products rather than it being a mystery. McDonald's partnered with Snap Inc. to allow MyMcDonald's users to redeem points for a month of Snapchat+. It's the first time they've done a digital subscription redemption. Very smart lifestyle integration and huge trial opportunity for Snapchat+. Costco Wholesale upgraded its top-tier Executive Membership. It costs $120 USD, but Executive customers can access the store one hour earlier than other customers and an hour later on Saturday. Plus 2% cash back. A brilliant combination of convenience with middle-class exclusivity. Walmart rewarded pre-orders of the Nintendo Switch by ensuring all orders were delivered by 9am on launch day... and included surprise Pringles and Cokes. At such a heightened and anticipated moment, that retailer has left an deep emotional footprint. So next time you think loyalty, don't settle for ordinary. Put yourself in your customers' shoes. Think outside of the normal. Create lasting value and impactful moments. Don't expect to turn tech on and loyalty to happen. If worse comes to worst... add Pringles to all orders.

What if the ₹69 lakh crore MSME credit gap could be solved without building new infrastructure? We just shipped India's first deep-dive playbook on MSME verification & underwriting. While many people were debating data availability, we have spent months with lenders who've almost cracked the code. They're not throwing more capital at the problem; they're fundamentally rethinking their understanding and approach to this sector. But here's what fascinated me most: the winners aren't just digitising more, they're also automating the "messy middle." - Think unified KYC/KYB through one API layer. - Seamless NACH & AutoPay mandates. - AI-powered fraud detection that actually works. - Clean audit trails with every workflow. At Decentro, our team interviewed 50+ lenders, analysed 1M+ data points, and found some great patterns that separate the leaders from the laggards. It's based on on-the-ground intelligence of modern SME lending, and I am super happy to be collaborating with Shrikant from DigiAlly on this. You can download the whitepaper via the link in the comment. #MSMELending #Fintech #DigitalLending #API #Verification #Infrastructure #India

Congrats to Joe Lu ✈️ and his team at HeyMax on raising US$11M to unify Asia's fragmented travel loyalty ecosystem. The round was lead by Peak XV Partners and is a signal that investors are betting big on infrastructure-layer solutions for the region's rapidly growing travel economy. The fragmentation problem they're solving If you're a frequent traveller in Asia-Pacific, you know the pain: points scattered across airline programs, hotel chains, credit cards, and merchants. Different expiry rules. Complex transfer ratios. Blackout dates. Value left on the table. HeyMax is building the connective layer to solve this. Founded in 2023 by four former Meta engineers, the platform aggregates loyalty earning and redemption across ecosystems using its own currency, Max Miles. Users earn across merchants and cards, then redeem across 30+ airline and hotel programs or convert to flights, hotels, and gift cards. The traction is impressive Since their US$2.7M seed round in July 2024: → 150,000+ users → 500M+ Max Miles issued annually → US$6M annualized revenue (5x YoY growth) → Acquired Hong Kong fintech krip for market entry Why this matters for APAC The regional loyalty market is projected to hit US$60 billion by 2029, yet over 75% of consumers struggle with fragmented programs. APAC passenger traffic now exceeds 120% of pre-pandemic levels. As Peak XV's Rohit Agarwal put it: "More than 40% of global card revenues, over US$100 billion, are spent on loyalty and rewards. HeyMax is using technology to turn that spend into actual consumption." What's ahead Expansion into Japan, Taiwan, and Australia by end-2026, plus deeper partnerships across airlines, hotels, and card issuers. Their AI features position them as programmable infrastructure for regional loyalty flows. The shift from "loyalty as branding" to "loyalty as infrastructure" is happening. This is worth watching. https://lnkd.in/gVA_FGDs

Overdue Open Banking post (#EmFi has been using all my 🧠 power recently!) What’s happening in the US right now deserves a spotlight. JPMorganChase has introduced a steep rate card for accessing customer data via API. It’s a direct attempt to squeeze fintechs and their customers. 🔷️ Context 🔷️ The Trump administration is working to roll back the Open Banking rule implemented by the CFPB. Not because they’re ideologically opposed to Open Banking, but because they want to reduce the size of the agency. While banks are suing it they can't reduce the headcount. They've indicated they’ll “do it better” eventually. 🔴 Impact 🔴 Fintechs and Open Banking platforms will face significantly higher costs to access consumer-permissioned data. This isn't theoetical. The cost of a new loan from an alternative lenders will go up. Pay-by-Bank payments will cost merchants more meaning less money to invest. Will budgeting apps survive? 🟤 JPM's Logic 🟤 Data is costly to maintain, secure, and serve. If others are going to monetise it, they should pay. But this justification is thin cover for a broader goal: restrict the portability of banking data so that it’s harder for competitors to serve customers or reduce payment costs. ⚠️Why is this problematic? ⚠️ Three reasons: 1️⃣ Data belongs to the customer. Your transaction history is yours. If you want to share it with a third party, you should be able to. The institution is merely a steward of your information. 2️⃣ Access to data drives competition. Fintechs rely on real-time data to underwrite loans, manage risk, and provide tailored services. Making that harder raises barriers to entry and reduces market efficiency and ultimately growth. 3️⃣ Raising API prices makes screen scraping more attractive. That’s bad. It’s insecure, unregulated, and less transparent. Ironically, the very thing Open Banking was meant to improve is being undermined by misaligned incentives. 🔭 The Big Picture 🔭 Large banks are protected by implicit government guarantees. They're essential to the system and so regulated accordingly. But that safety net also reduces pressure to innovate. Instead of building better products, they raise prices and resist change. That’s why Open Banking matters. It levels the playing field. It introduces real competition. And it ensures that innovation in financial services doesn’t come solely from protected incumbents. If the US rolls back #OpenBanking, the result is clear: consumers and businesses lose out, #GDP is lower than it could be, and innovation slows down. That’s why this isn’t just a technical debate. It’s an economic one. (Views my own, not those of any current or former employer.) #payments #openfinance #innovation #OpenEconomyConsulting

🚨 Deep Dive: How Zelle Scaled to $1.2 Trillion by Embedding Into Banking The Zelle network owned by Early Warning Services handled over $1.2 trillion in 2025 (20% growth) on roughly 4.2 billion transactions, far outpacing the 3–4% pace of U.S. consumer spending. Roughly 30% of that volume is payments to or from small businesses, underscoring Zelle’s role in everyday commerce. Banks are now expanding Zelle globally: in late 2025 Early Warning announced a stablecoin-based cross-border initiative “to bring speed and reliability” to international payments, to be offered on equal terms to all Zelle banks. Integration of Zelle typically means partnering with a sponsor bank or vendor (e.g. Alacriti’s Orbipay) and using ISO20022-based APIs. Key trade-offs include security and fraud: regulators note hundreds of millions lost to scams (CFPB cited ~$870M since 2017), while Early Warning touts that 99.95% of transactions have no reported fraud. Consumer protection laws (EFTA/Reg E) do not easily reverse Zelle’s instant transfers, so banks emphasize fraud mitigation and user education. For fintechs, the decision to integrate with or compete against Zelle hinges on infrastructure and strategy: partnering with a bank or fintech provider offers real-time P2P liquidity and access to Zelle’s 2,300+ FI network, but imposes network fees and compliance duties. Alternatives like FedNow (free real-time ACH), card-rail push payments, or crypto rails each carry different cost, speed, and risk profiles. In this article, I unpack integration options, technical flows, security/regulatory issues, and strategic product and go-to-market considerations. In short, Zelle integration can deepen customer relationships and expedite B2C/B2B payouts, but requires balancing irreversible payment risk against speed and reach. https://lnkd.in/eqm9PTT7

Your AI project will succeed or fail before a single model is deployed. The critical decisions happen during vendor selection — especially in fintech where the consequences of poor implementation extend beyond wasted budgets to regulatory exposure and customer trust. Financial institutions have always excelled at vendor risk management. The difference with AI? The risks are less visible and the consequences more profound. After working on dozens of fintech AI implementations, I've identified four essential filters that determine success when internal AI capabilities are limited: 1️⃣ Integration Readiness For fintech specifically, look beyond the demo. Request documentation on how the vendor handles system integrations. The most advanced AI is worthless if it can't connect to your legacy infrastructure. 2️⃣ Interpretability and Governance Fit In financial services, "black box" AI is potentially non-compliant. Effective vendors should provide tiered explanations for different stakeholders, from technical teams to compliance officers to regulators. Ask for examples of model documentation specifically designed for financial service audits. 3️⃣ Capability Transfer Mechanics With 71% of companies reporting an AI skills gap, knowledge transfer becomes essential. Structure contracts with explicit "shadow-the-vendor" periods where your team works alongside implementation experts. The goal: independence without expertise gaps that create regulatory risks. 4️⃣ Road-Map Transparency and Exit Options Financial services move slower than technology. Ensure your vendor's development roadmap aligns with regulatory timelines and includes established processes for model updates that won't trigger new compliance reviews. Document clear exit rights that include data migration support. In regulated industries like fintech, vendor selection is your primary risk management strategy. The most successful implementations I've witnessed weren't led by AI experts, but by operational leaders who applied these filters systematically, documenting each requirement against specific regulatory and business needs. Successful AI implementation in regulated industries is fundamentally about process rigor before technical rigor. #fintech #ai #governance

Robinhood's CEO just said the most important financial infrastructure of the next decade will look less like a bank branch and more like a developer platform. He's right. But he's only describing half the stack. Vlad Tenev is talking about the transactional layer. Tokenization, blockchain rails, developer APIs for trading and payments. And he's correct - the future of that layer is clearly programmable infrastructure. But transactions are only half of what financial institutions do. The other half is servicing. A borrower calls about a late payment. A collector reaches out about a delinquent account. An applicant needs help completing their application. A customer in hardship needs a payment plan. Most of that is still handled by humans, using the same infrastructure it ran on twenty years ago. If you automate the transactional layer but still need a floor of human agents to handle every inbound call, every outbound collection, every payment reminder - you're only halfway there. You've modernized the plumbing but left the most expensive, most customer-facing part of the operation untouched. The real unlock is fully automated, intelligent servicing. From origination through collections, powered by omnichannel AI agents handling inbound and outbound across voice, email, SMS, and chat. And all powered by an intelligent layer that knows which channel to use, when to reach out, and what offer to make for each individual borrower. That's what we're building at Veritus. Not just voice agents - a servicing brain that automates the entire communication layer of consumer lending with the same precision that Robinhood is bringing to the trading layer.