Over the past year, I’ve spoken with dozens of banks and credit unions, many of which are already partnering – or planning to partner – with fintechs to drive growth. We’re certainly in a golden age of fintech innovation, but I was struck by how differently the term “fintech” is defined depending on who I was speaking with.
One Word, Two Meanings
It didn’t take long to recognize that the varying interpretations of “fintech” aren’t isolated to clients – they reflect a broader industry challenge. I recently started a new role, partnering with the Victor Technologies team – our newest acquisition – and our Payments team. I’ve seen firsthand how our perspectives on fintechs can differ markedly.
-
In Digital Banking, fintechs are typically providers of specific features or capabilities that integrate into the bank or credit union’s digital banking platform to broaden their offering.
-
In Payments, the model flips and financial institutions embed their banking services into the fintech’s solution – typically a standalone platform – to help the fintech expand what it can offer.
To distinguish between the two approaches and eliminate confusion, it’s best to refer to fintechs as either integrated or embedded.
Integrated Fintech Partnerships Strengthen Digital Banking
Banks and credit unions partner with integrated fintechs to expand their digital capabilities, giving accountholders greater financial clarity while reinforcing trust, engagement, and long-term loyalty. Ideally. These partnerships lead to greater share of wallet and incremental revenue opportunities.
At Jack Henry, our clients can choose from over 250 integrated fintechs to expand and differentiate their digital offering on the Banno Digital Platform™.
Some terrific examples of fintechs integrated with Banno include:
-
Array: to bring credit scores into digital banking
-
Bits of Stock: to bring fractional stock investing and rewards into digital banking
-
Autobooks: to bring accounting and invoicing capabilities for business accountholders into digital banking
Embedded Fintechs Expand Your Reach and Revenue
On the flip side, banks and credit unions partner with embedded fintechs to integrate essential banking capabilities – like payments, deposits, and lending – into the fintech’s offering, supported by the financial institution’s regulatory rigor.
For our FIs, this provides access to new markets and revenue opportunities.
Jack Henry’s recent acquisition of Victor Technologies, for example, strengthens our embedded fintech offering, allowing clients to embed payments (via ACH, wires, RTP Network, etc.), deposits, cards, and remote deposit capture into innovative fintechs.
These services are all supplemented by virtual accounts, end-user support, and the FI’s compliance oversight.
In addition to providing the payment rails supporting embedded fintech, Jack Henry can also help connect suitable fintechs to our network of interested banks and credit unions.
Popular examples of embedded fintech include:
-
Venmo: in partnership with Bancorp bank
-
Acorns: in partnership with Lincoln Savings Bank
-
Apple Credit Card: in partnership with Goldman Sachs
Embedded or Integrated – Jack Henry Is Here to Support You
If you are a fintech looking to integrate your services into an FI's ecosystem, you can learn about our Fintech Integration Network here. If you’re a fintech looking to embed payment services, click here to learn more. If you are a financial institution looking to embed payments with businesses, contact us at businesspayments@jackhenry.com.
.svg)
