Embedded Finance: How Banks Can Win in the New B2B Ecosystem

Embedded finance is rapidly reshaping the landscape of business banking. By integrating financial services directly into non-financial platforms—such as ERP, e-commerce, and supply chain systems—banks have a unique opportunity to serve business clients, especially small and medium-sized enterprises (SMEs), in ways that are more seamless, relevant, and scalable than ever before. As the B2B and B2B2C embedded finance market accelerates, banks that move decisively can unlock new revenue streams, defend against fintech disruption, and become indispensable partners in their clients’ digital journeys.

The Embedded Finance Opportunity

The market for embedded finance is experiencing explosive growth. Global product revenues in embedded banking are projected to rise from $66 billion in 2022 to $160 billion by 2025, with B2B and B2B2C models leading the charge. This growth is driven by the digitization of business processes, the proliferation of cloud-based platforms, and the demand for frictionless, context-aware financial services. For SMEs—who often face fragmented banking experiences and limited access to tailored financial products—embedded finance offers a way to access credit, payments, and working capital solutions directly within the tools they use to run their businesses.

Banks are uniquely positioned to capitalize on this shift. They bring regulatory expertise, risk management capabilities, and established trust—critical assets in a landscape where compliance and security are paramount. However, to seize the embedded finance opportunity, banks must rethink their operating models, technology stacks, and partnership strategies.

The Modular Capability Stack: Building for Scale and Flexibility

At the heart of scalable embedded finance is a modular capability stack. This architecture enables banks to efficiently serve multiple distribution partners and adapt to diverse partner and customer needs. The key layers include:

Customer Proximity (Distributor/Partner): Non-financial platforms (e.g., ERP, e-commerce, supply chain) that own the customer relationship and embed financial services into their journeys.
API Layer: Provides standardized, secure, and resilient APIs that allow partners to access banking services. Multi-tenancy is essential to serve multiple partners efficiently.
Financial Product Manufacturer: Designs and manages the financial products (e.g., lending, payments, insurance) offered through partners.
Banking Infrastructure Provider: Delivers the underlying processes and systems required to support financial products, optimized for speed, risk, and cost.
Regulated Entity/Balance Sheet Provider: Holds the regulatory license and manages risk and capital exposure.

Banks can play multiple roles in this stack—from regulated entity and infrastructure provider to API platform and even product manufacturer. The most successful banks will be those that can flexibly adapt their role based on the needs of each partnership and the strategic value of each layer.

Commercial Strategies: From Pilot to Scale

To win in embedded finance, banks must move beyond isolated pilots and build propositions that can scale across multiple partners and customer segments. Key commercial strategies include:

Partner-Centric Proposition Development: Co-create solutions with partners, blending financial and non-financial services to deliver differentiated value to end users.
Agile Operating Model: Establish cross-functional teams that can rapidly design, launch, and iterate embedded finance offerings, incorporating feedback from both partners and customers.
Modular Technology Architecture: Invest in cloud-native, API-first platforms that enable rapid integration, efficient customization, and real-time data sharing.
Ecosystem Orchestration: Build and manage a network of fintech and technology partners to extend capabilities, accelerate innovation, and reduce time to market.
Outcome-Based Funding Models: Shift from traditional project funding to outcome-based, iterative investment approaches that allow for rapid scaling and course correction.

Publicis Sapient’s Approach: Designing and Launching Embedded Finance at Scale

Publicis Sapient has partnered with leading banks globally to design, build, and scale embedded finance propositions. Our approach is grounded in:

Strategic Planning: Define clear commercial objectives, target segments, and partnership models. Identify the right balance of build, buy, and partner for each capability.
Rapid MVP Development: Launch minimum viable products with initial partners in as little as six to nine months, leveraging modular architectures and fintech ecosystems.
Iterative Scaling: Refine propositions based on market feedback, expand the partner base, and continuously enhance organizational capabilities.
Digital-First Delivery Model: Operate with multidisciplinary DevOps teams, agile product governance, and a relentless focus on customer and partner experience.

Real-World Case Study: Building a BaaS-First SME Bank in Nine Months

In one recent engagement, Publicis Sapient helped launch a BaaS-first commercial SME bank targeting 350,000 SMEs. The solution was fully functional in nine months, orchestrating 22 fintech partners and delivering:

End-to-end cloud-native platform
Real-time data lake for analytics and insight
API-driven integration with ERP and finance systems
Fully automated operational processes
Flexible partner ecosystem, enabling rapid onboarding and customization

This approach enabled the bank to offer embedded payments, lending, and working capital solutions directly within SME clients’ business platforms—dramatically improving customer experience and operational efficiency.

Practical Steps for Banks: From Pilot to Full-Scale Deployment

Define Your Strategic Ambition: Identify target markets, partners, and value propositions. Decide which roles in the embedded finance stack you want to own or share.
Build the Modular Foundation: Invest in cloud-native, API-first architecture and data platforms. Ensure compliance, security, and scalability from day one.
Co-Create with Partners: Engage early with non-financial platforms to design propositions that blend seamlessly into their user journeys.
Launch and Iterate: Start with a focused MVP, gather feedback, and refine the offering. Use agile methods to accelerate time to market and adapt quickly.
Scale Efficiently: Develop partner onboarding playbooks, automate integration processes, and build a robust partner servicing model.
Orchestrate the Ecosystem: Cultivate relationships with fintechs, technology providers, and data partners to extend capabilities and drive innovation.

The Path Forward

Embedded finance is not just a new distribution channel—it’s a structural shift in how business banking is delivered and experienced. Banks that embrace modularity, agility, and ecosystem thinking will be best positioned to lead in the new B2B landscape. By leveraging embedded finance, banks can become the invisible engine powering business growth, delivering value at the point of need, and forging deeper, more resilient client relationships.

Publicis Sapient stands ready to help banks navigate this transformation—designing, launching, and scaling embedded finance propositions that win in the new B2B ecosystem.