I invite you to read Matt Brown’s post about the iron triangle of Embedded Finance where he describes the complexity of finding a Fintech infrastructure provider that checks all your boxes.
While the post is great, my favorite statement is right at the beginning when Matt describes that product innovation is a necessary condition but not a sufficient one.
To put it simply, the best product will not always win, and actually, non-financial brands with an existing business and customers could be in a good position to win over young players entering their market who focus on the perfect product.
But the split is hard, as this doesn’t mean non-financial brands can win with bad products. Especially when it comes to financial products, there are often certain features that we as potential users (consumer or commercial) request, and we will not be willing to use a new service if it is missing an important feature for us. Non-financial brands have to find their (!) answers to the golden questions: (1) how good does the financial product need to be and (2) how to create an unfair advantage by combining this financial product with the core business.
From what I am seeing in my activities in the Embedded Finance world, there are more and more non-financial brands who understand this; however, I think many more are currently still standing on the sidelines because they believe that they can only win with a superior product.
