Theresa: Hi Lars, thank you for taking the time to talk with us today. Could you briefly introduce yourself and share what you do?

Lars: Hi Theresa, it’s great to be here! My name is Lars Markull, and I’ve been working in fintech for over a decade. Currently, I’m an independent Embedded Finance advisor. I primarily work with companies outside of the financial sector—like B2B SaaS providers—who want to offer their own financial products. For example, this could involve launching payment, banking, or lending solutions. I guide these companies by demystifying fintech, connecting them with the right banking partners, and supporting them in selecting the best infrastructure providers.

Beyond consulting, I also run a newsletter, host a podcast, and organize events under the brand Embedded Finance Review. My goal is to make Embedded Finance accessible to companies that often know little about fintech when they begin exploring it.

Theresa: Embedded Finance might be a new concept for some of our readers. Could you explain what it is and why it matters?

Lars: Certainly! Embedded Finance is when a company that’s not inherently a financial provider offers its own financial products directly within its ecosystem. For example, a ridesharing app might provide a driver with instant payment options or even lending services tailored to their needs.

To identify Embedded Finance, I use a simple checklist:

(1) Is the financial service seamlessly integrated within a non-financial product? (2) Does it offer entirely new solutions, not just partial integrations like Open Banking? (3) Is the customer using it for the non-financial product, with the financial service as a value-add?

For banks, Embedded Finance is a game-changer. It creates new channels for financial services—often ones where the bank itself isn’t at the forefront. While not everything will be embedded in the future, this trend is reshaping how customers interact with financial products.

Theresa: Which technologies play a key role in implementing Embedded Finance, and how do APIs fit into the picture?

Lars: APIs are the backbone of Embedded Finance. While the concept isn’t entirely new—think of car loans at dealerships—APIs make seamless integration possible at scale. They allow non-financial companies to embed financial products without needing deep expertise in banking operations.

Banking-as-a-Service (BaaS) providers are crucial here. They’ve shifted from targeting fintech startups to supporting non-financial brands, which requires a different approach. These companies often lack financial expertise, so APIs need to handle complex processes, enabling easy integration for their core business.

Theresa: Which industries stand to gain the most from Embedded Finance?

Lars: Almost any industry can benefit, but success often depends on a few factors:

B2B Focus: Business customers are easier to monetize than consumers.
Touchpoints with Financial Processes: If the company already interacts with payments or invoicing, it’s a natural fit. Data-Driven Services: Adding financial products becomes more valuable when paired with existing data. Customer Stickiness: The more time users spend on a platform, the easier it is to introduce additional services.

Vertical SaaS is an excellent example. These companies target niche markets—like hospitality or construction—and combine multiple functionalities, such as CRM and billing. Adding financial products is a logical next step, as it aligns with their customers’ needs.

Theresa: What challenges should companies be aware of when implementing Embedded Finance?

Lars: The biggest challenge is tightly integrating the financial product with the company’s core offering. It’s not about launching a generic financial product—it’s about solving specific customer problems and adding real value. For instance, a bank account tied to a company’s core product should enhance the overall experience, not just exist as an add-on.

Theresa: Where do you see Embedded Finance heading in the next five years?

Lars: I think we’re just scratching the surface. Angela Strange once said, “Every company will be a fintech company,” and while we’re not there yet, the momentum is building. Over the next five years, we’ll see more players entering the space and new use cases emerging. This evolution will likely feel gradual but transformative in hindsight.

Theresa: Is there anything else you’d like to share with our readers?

Lars: Embedded Finance spans a vast range of industries and financial products—payments, banking, lending, insurance, and investment. Not all Embedded Finance solutions are created equal, so it’s essential to dive into the details to understand the true potential.

For anyone interested in exploring this space, I’d recommend checking out Embedded Finance Review. It’s a great resource for learning more through newsletters, podcasts, and events.

Theresa: Thank you, Lars, for the insights. This was incredibly informative!

Lars: My pleasure, Theresa. Thanks for having me