How Procounter is Making Neobanks Useless: Embedded Banking at Scale with Juho Putkonen

Procounter, Finland's dominant accounting software provider, is quietly revolutionizing how small and medium businesses handle their banking. Serving over 100,000 Finnish companies and processing an estimated 13.5% of Finland's GDP through invoices, the company has identified a critical flaw in traditional business banking: excessive costs and poor integration. In this podcast episode, Juho Putkonen, Commercial Product Manager at Procountor, reveals how they're building banking services directly into accounting software, making standalone neobanks irrelevant for their customer base.

The Finnish Banking Problem: €80 Monthly Data Transfer Fees

• Traditional Finnish banks charge approximately €80 per month for basic data transfers between business accounts and accounting software

• Account opening process takes 3+ weeks with extensive documentation and face-to-face meetings

• Data synchronisation is often limited to once a month due to high costs, preventing real-time accounting

• Large banks control 90% market share (Nordea and OP), with little incentive to reduce profitable data transfer fees

Procounter's Embedded Banking Solution with Alisa Bank

• Partnership with challenger bank Alisa Bank to offer business accounts at €10 monthly fixed fee

• 10% of new Procounter customers adopted the banking product within 7 months of launch

• Instant data integration between bank transactions and accounting software

• Finnish IBAN requirement crucial for local market acceptance and customer comfort

The Strategic Partnership: Why Local Banking Matters

• Alisa Bank's focus on banking-as-a-service made it an ideal embedded finance partner

• 90% of Finnish SMBs require FI-prefixed IBANs for credibility and customer acceptance

• Traditional banks approached but declined due to their profitable existing data transfer business

• Future credit card products may use international providers due to different customer perceptions

Invoice Financing: Hidden Success with Visibility Problems

• The existing invoice financing service is automated and operationally excellent, but has only 1% customer adoption

• Over 10% of Procounter's customer base uses invoice financing elsewhere, unaware of the internal option

• Key lesson: embedded finance requires embedded sales and marketing, not just embedded functionality

• Upcoming UI overhaul to make financing options visible during invoice creation and cash flow review

Future Roadmap: Cards, FX, and Real-Time Accounting

• Corporate debit/credit cards launching post-summer 2024 to serve 80% of the potential customer base

• Foreign exchange payments and international transfer capabilities in development

• Goal of transaction-level, real-time accounting integration

• October 2024 EU regulation mandating real-time B2B payments will accelerate the need

Organizational Structure and Team Setup

• Embedded banking operates within the "Ecosystems" unit, managing 150+ software integrations

• Two-person team currently handling banking and finance services

• Ecosystems unit focuses on non-core features that enhance customer service

• Expected team expansion as banking services prove business impact and scale

Key Lessons for Non-Financial Companies Building Financial Services

• Network extensively within FinTech and banking - crucial partnerships often emerge from personal connections

• Embedded finance is now considered the "sexiest area of Fintech" with high industry interest

• Don't hesitate to approach major players - timing and mutual benefit often align unexpectedly

• User experience and sales process are equally important as operational functionality