Embedded Finance in Commercial Banking: Unlocking Value for SMEs and Corporate Clients

The New Frontier: Embedded Finance for Business Banking

Embedded finance is rapidly transforming the landscape of commercial banking, moving far beyond its consumer roots to become a strategic lever for banks serving small and medium-sized enterprises (SMEs) and corporate clients. By integrating financial services directly into the platforms and workflows that businesses use every day—such as enterprise resource planning (ERP) systems, accounting software, and digital marketplaces—banks can deliver seamless, context-aware financial solutions that address the unique needs of business customers. This shift is not just about convenience; it’s about unlocking new value, driving operational efficiency, and enabling growth for both banks and their clients.

Why Embedded Finance Matters for Commercial Banks

The commercial banking sector is at a pivotal moment. Traditional product-centric models, characterized by siloed systems and fragmented customer experiences, are increasingly out of step with the expectations of digitally savvy business clients. SMEs and corporates now demand real-time access to working capital, integrated cash management, and frictionless onboarding—all within the digital tools they already use to run their businesses. The rise of embedded finance, powered by open banking APIs and advanced data integration, offers commercial banks a path to meet these expectations and differentiate themselves in a competitive market.

Key Drivers of Embedded Finance Adoption

• Digital Transformation: The digitization of business operations has lowered the barriers to integrating financial services into non-financial platforms, making it easier for banks to reach clients where they work.
• Enhanced Client Experience: Embedded finance eliminates the need for clients to toggle between banking portals and business applications, streamlining workflows and improving satisfaction.
• Access to New Segments: By embedding services in platforms used by underbanked or underserved businesses, banks can expand their reach and tap into new markets.
• Monetization and Growth: Embedded finance creates new revenue streams through transaction fees, lending, and value-added services, while deepening client relationships.
• Regulatory Support: Open banking initiatives and evolving regulations are enabling secure data sharing and fostering innovation in financial services.

Transforming Working Capital Management and ERP Integration

One of the most impactful applications of embedded finance in commercial banking is the integration of banking services directly into ERP and treasury management systems. This approach addresses longstanding pain points for businesses, such as fragmented cash visibility, manual reconciliation, and slow access to credit.

The Embedded Finance Advantage

• Unified Cash Management: Businesses often maintain multiple banking relationships, making it challenging to gain a consolidated view of liquidity. Embedded finance solutions aggregate account data across banks, providing real-time dashboards within the ERP environment.
• Seamless Payments and Reconciliation: Open banking APIs enable direct initiation of payments and automated reconciliation from within business platforms, reducing errors and administrative burden.
• Faster Access to Working Capital: AI-powered embedded lending solutions can analyze real-time business data to offer pre-approved credit, accelerating decisioning and funding—sometimes reducing time to cash from weeks to less than a day.
• Proactive Financial Insights: Embedded AI tools can forecast cash flow, alert clients to potential shortfalls, and recommend tailored financial products, all within the context of the client’s daily operations.

Real-World Innovation

• Plug-and-Play ERP Adaptors: Solutions that connect client ERPs to banking platforms without custom coding, enabling rapid deployment and integration.
• API-Driven Treasury Services: Direct integration with treasury workstations for real-time payments, reconciliation, and liquidity management.
• Digital Working Capital Platforms: Automated credit assessment and onboarding, leveraging real-time data for faster, more accurate lending decisions.

Addressing the Challenges: Legacy Systems, Data Quality, and Client Expectations

While the benefits are clear, commercial banks face significant hurdles in delivering embedded finance at scale:

• Legacy Technology: Siloed, outdated systems hinder the integration of modern APIs and limit scalability. Banks must invest in coreless, cloud-based architectures to enable flexible, modular service delivery.
• Data Quality and Accessibility: High-quality, accessible data is essential for AI-driven insights and automation. Breaking down data silos and implementing robust governance are critical steps.
• Client Experience Gaps: Many business clients still report average-to-poor digital experiences, with onboarding and KYC processes cited as major pain points. Embedded finance can streamline these journeys, but only if banks prioritize user-centric design and seamless integration.
• Talent and Culture: Successfully delivering embedded finance requires new skills and a shift toward agile, cross-functional teams that can co-create solutions with technology partners and clients.

The Role of Generative and Agentic AI in Embedded Finance

The next wave of embedded finance will be powered by advanced AI capabilities. Generative and agentic AI can:

• Automate Complex Workflows: From underwriting to compliance, AI agents can execute multi-step processes autonomously, reducing manual effort and accelerating service delivery.
• Personalize Client Interactions: AI-driven dashboards and conversational interfaces can deliver tailored insights, proactive recommendations, and real-time support within business platforms.
• Enable No-Code Integration: AI-powered app builders allow clients to create custom dashboards and workflows without engineering resources, democratizing access to advanced financial tools.
• Enhance Risk Management: AI models can continuously monitor transactions, flag anomalies, and support regulatory compliance, all while adapting to evolving business needs.

Building the Future: A Roadmap for Commercial Banks

To unlock the full potential of embedded finance for SMEs and corporate clients, commercial banks should focus on several strategic imperatives:

1. Modernize Technology Foundations: Invest in cloud-native, API-first architectures that support rapid integration and scalability.
2. Prioritize Data and AI Readiness: Establish unified data platforms and governance frameworks to fuel AI-driven innovation and insights.
3. Adopt Agile, Customer-Centric Operating Models: Organize around client needs, leveraging cross-functional teams and co-creation with partners.
4. Develop Embedded Finance Partnerships: Collaborate with fintechs, ERP providers, and technology partners to deliver integrated solutions.
5. Embrace Responsible AI and Compliance: Build ethical, transparent AI systems with robust controls to ensure trust and regulatory alignment.
6. Scale Through Modular, Repeatable Solutions: Design offerings that can be efficiently customized and deployed across multiple partners and client segments.

The Publicis Sapient Advantage

Publicis Sapient brings deep expertise in digital business transformation, helping commercial banks design, build, and scale embedded finance solutions that deliver measurable value. Our approach combines strategy, technology, and customer experience to:

• Accelerate time to market with proven frameworks and agile delivery models
• Enable seamless ERP and platform integrations through open APIs and modern architectures
• Harness the power of generative and agentic AI for hyper-personalized, automated client experiences
• Support banks in navigating regulatory complexity and building responsible, scalable AI solutions

Conclusion: Unlocking Value for the Next Generation of Business Banking

Embedded finance is redefining what it means to serve business clients in the digital age. By integrating financial services into the heart of business operations, commercial banks can move from selling products to solving real business problems—driving growth, efficiency, and loyalty for both banks and their clients. The future belongs to those who act boldly, invest in modern capabilities, and embrace the power of embedded, intelligent finance.

To learn how Publicis Sapient can help your organization unlock the value of embedded finance for SMEs and corporate clients, visit publicissapient.com/fs.