The Death of Traditional Banking Relationships
How embedded finance is making every company a potential competitor
The ways in which consumers access and purchase financial services are expanding, not only due to new fintech entrants but also through the explosion of cross-sector partnerships and embedded solutions at the point of sale. This isn't just about convenience—it's about the fundamental redefinition of what a bank is and where financial services live.
Visa, Fiscal third quarter 2024 financial results, July 23, 2024. Lynne Marek, "Visa preps for US pay-by-bank services," Payments Dive, May 28, 2024, and payment companies are becoming the invisible infrastructure that enables any company to offer financial services. We're witnessing the "financialization" of every consumer touchpoint.
Digital trailblazers have been creating a fresh new wave of products and services that use blockchain-powered distributed ledger technology, particularly in banking and more recently capital markets. The technology infrastructure is democratizing access to financial services creation, allowing non-financial companies to offer sophisticated financial products.
Think about the implications: your ride-sharing app offers insurance, your coffee shop provides micro-loans, your streaming service manages investments. As a younger demographic gains more financial power, they're increasingly demanding digital experiences and convenience at the standard that's offered to them in other sectors.
Traditional banks aren't just competing with other banks anymore—they're competing with every company that touches their customers' daily lives. The winners will be those that either become platforms enabling this embedded finance trend or those that create such compelling direct relationships that customers actively choose traditional banking over embedded alternatives.
Sources:
Docusign Financial Services Trends 2024
Deloitte Banking Industry Outlook 2025
Broadridge Financial Services Trends 2024