Fleming, a German financing provider for doctors and other medical professions, has launched a bank account and debit card product in cooperation with embedded banking provider Swan. And before you wonder, yes, this is not a true embedded finance product, since we cannot classify Fleming as a non-financial brand. Fleming launched its original financing product in 2021 when it partnered with embedded lending provider Banxware. Doctors could apply digitally for a loan for example, to take over a medical practice or for other expenses up to five million euros. The banking product is likely aiming to increase touch points with their customers and might enable Fleming to launch other adjacent products in the future.
But coming to the question, why do I cover this story in the newsletter if it’s not truly embedded finance? You might remember that I have blogged about vertical vs. embedded banking in the past and I believe that vertical fintech solutions can succeed in certain areas. It doesn’t have to always be a non-financial company that is winning by combining financial activities with non-financial activities. It can be the other way around as well.
Especially in Germany, we have seen a number of startups launched in the past few years that are aimed at medical professionals, from startups that offer banking products (Cure Finance) and invoices and payments providers (Nelly) to treatment planning tools (Roger) and, of course, financing (Fleming). All of them are new tools for a doctor in addition to their medical practice management software, the main software a doctor is using. This software is old-school and, for us digital natives, probably very hard to use; nevertheless, it contains all the necessary features and functionalities a doctor’s practice needs. Startups will have a hard time winning against these software providers since they cannot offer all the functionality from day one (and some startups don’t even want to compete with these providers for other reasons). Thus, they need to start somewhere else and likely integrate this practice management software in order to succeed. They have to pick their wedge (click here to understand this better) before broadening their scope.
I am not an expert when it comes to medical professionals. But if it’s true that practice management software is impossible to replace but already covers many of the non-financial activities, then a vertical fintech product might be the best way into the market before extending into non-financial activities.
