The Disappearing Bank

Once financial services were digital, they no longer needed to exist as discrete products; they could become embedded in software that consumers and businesses use all day long, and with which they have a durable and data-rich relationship. We are early in that process, and it requires imagination to see where it ends. For a while, it’s just going ... See more

Despite strong technology players like Stripe, Square, PayPal, and Robinhood, traditional banks are still dominant.

Even category-defining influencers face these hurdles. Many lack access to credit, loans, and a business bank account. Some float five-figure sums for production costs on PayPal. Others are unable to prove income requirements to secure a lease. What’s more, the metrics that define a sustainable digital business – subscription growth, audience engag... See more

Ultimately, leading players want to take over the rest of the finance space leveraging their user base, technology and brand. Payment companies doing loans. Payroll providers starting to act like aggregators of services. Accounting solutions doing planning. Expense management platforms doing procurement.

Vertical neobanks are an emerging flavor of embedded finance, that happen to be on the issuing side rather than the acquiring side. They offer a product with core financial benefits, that differentiate them from the majors (Chase, Wells, BofA, Citi).