A growing number of non-traditional financials, from the large neobanks of the world to small and mid-sized corporates, are looking to fashion new user experiences on the front end — whether that end user is a business or a consumer.
As Jeff Nowicki, VP of Banking at Treasury Prime told PYMNTS, embedded finance might be just the thing to drive innovation and change within the financial services sector, especially for smaller community banks that want to bring embedded finance to FinTechs and enterprise clients.
And the faster they can do so, the better.
While he said the urgency is there to help shepherd those innovations to market, a plug and play approach is critical to make it actually happen.
“The most simple use cases are the ones where corporate clients are looking to access their business banking in a different way,” he said. “and API banking is the next frontier.”
Embedded finance, he said, lets FinTechs and enterprises offer up checking accounts or business accounts across non-traditional channels, which in turn opens up new revenue streams and business lines and increases deposits for smaller banks.
The conversation came in the wake of Treasury Prime’s announcement Monday (Sept. 19) that it had been accepted into the Jack Henry Vendor Integration Program.
According to Nowicki, Treasury Prime’s inclusion into the program means that all banks on the Jack Henry core are able to adopt Treasury Prime’s BaaS technology in standardized fashion, and in turn, offer embedded finance to their FinTech and enterprise customers.
“This gives us a ‘direct line’ with Jack Henry and takes our mutual clients out of the middle, out of the game of playing ‘telephone,’” he said, “and allows us to more seamlessly deliver the end products that our clients need and want.”
Request for Access
In terms of the mechanics, once a partner bank requests access to the Treasury Prime work system, they can quickly begin using the new services and building revenue streams across embedded finance or banking as a service offerings, as the BaaS technology can now be onboarded and fully integrated in just a few weeks — and then start delivering those services immediately.
“We’re unlocking that access point for them,” he said of the smaller banks, adding that these new business lines are opening up a larger subset of community banks that would not have had these opportunities without technology partners.
Drilling down a bit, he said, for those smaller enterprises, being able to initiate their bill pays or ACH transactions through APIs and payment rails instead of logging into online banking systems (sometimes several times a day) can save time and money.
The Jack Henry vendor integration news follows the news earlier this year that Treasury Prime had entered into a partnership with FIS to offer the latter’s banking clients embedded functionality that helps manage deposits, accounts payable and other banking functions. Of the Jack Henry and FIS partnerships, he said, “they’re definitely complimentary.”
Looking ahead, he said, embedded finance will slowly make its way out into the mass market – and for the providers, he told PYMNTS: “It’s going to be table stakes over the next five years for every bank in the country to have some form of API banking.”