Embedded finance is poised to surge as multiple players integrate financial services, such as payment processing and lending, into a variety of new mobile applications, executives on a panel hosted by Cross River Bank said Thursday.
“Embedded finance will explode in daily life experiences,” Adam Goller, head of fintech bank, said in leading a virtual discussion on predictions for the coming year. “That could be social media apps, it could be things that we utilize while we're driving – any app that we’re using on a regular basis will become where we do our finance activities.”
Embedded finance also helps brands in “meeting the customer where they’re doing their finances,” said Noah Cooper, the bank’s chief investment officer.
“So it creates this really nice mutual stickiness, where the lender, the platform and the brand are all acquiring the customer once, and not acquiring the customer at disparate times,” he said.
In other areas, the executives predicted that more fintechs are likely to apply for banking charters as President Donald Trump’s administration seeks to encourage financial innovation with leaner regulation.
Multiple companies – including Affirm Holdings, Checkout.com, Fiserv, PayPal Holdings and Stripe – have sought bank charters over the past two years, including applications within the past two months from Affirm and PayPal.
However, the movement of fintechs that want to become banks isn’t “rampant,” said Hillel Olivestone, Cross River’s chief strategy officer.
“It really depends on the type of situation, what you're looking to achieve,” he said of companies considering one of the various banking charters. “It’s not a one-size-fits-all. The regulators are not going to accept every single company to be a bank, and just because you want to become one doesn't mean you’re going to get the approval.”
Cross River, based in Fort Lee, New Jersey, is an FDIC-insured bank that works with a variety of financial tech companies including Affirm, Stripe and Coinbase, the cryptocurrency platform.
The executives also predicted that agentic finance will spread more into the consumer world to provide guidance on personal finance, such as identifying interest-bearing accounts, credit card payment scheduling and financial product recommendations.
The executives also saw more digital tokenization of financial assets but a continued slower pace for consumer adoption of stablecoins.
The lack of consumer use cases for cryptocurrencies and blockchains have hobbled wider adoption of those technologies, said Benjamin Melnicki, the bank’s chief risk and compliance officer.
“One of the challenges that we face as a marketplace is in the user interface and user experience,” he said. “With traditional financial services, when something goes wrong, you pick up the phone and call customer service. I think we're getting there.”
When there’s a problem in digital asset technology, Melnicki said, “it’s immutable, it’s irreversible. And I think that’s a friction point to a lot of the adoption.”
