What happened: Dutch bookkeeping provider Snelstart has launched an embedded banking product in partnership with Flow and Adyen (Flow). Snelstart targets freelancers and small and medium-sized businesses, offering services ranging from invoicing to inventory management. It’s not the beginning of a new partnership, as Snelstart and Flow already partnered when Flow was offering a finance-management app for freelancers.
My comment: Another bookkeeping tool launches an embedded banking product. We have seen this trend for some time, but it also feels like we have seen a substantial uptick in such partnerships in the past few months. Probably the most interesting angle of this announcement is the companies behind it. Adyen is probably known to many as the popular payment service provider for large enterprises, and with its Balance platform, the Dutch company also offers banking and financing products. However, Adyen remains focused on large enterprises. Even mid-sized companies are often too small for Adyen. This brings us to Flow, which is significantly smaller than Snelstart. However, as a potential aggregator of different customers, Adyen believes that the future size of all of Flow's partners is sufficient for them. You might want to argue that Flow has opened the door to Adyen for Snelstart, but it is important to highlight that Flow also offers a front-end product and other workflow features for companies like Snelstart. Consequently, the value chain is Adyen (BaaS) → Flow (Frontend and features) → Snelstart (Bookkeeping with embedded banking).
When looking at the market of embedded banking products, this remains a rather uncommon approach since most non-financial brands would build the front end themselves on top of the banking-as-a-service provider APIs. I would say there are pros and cons to this strategy. Most likely, Snelstart might think they would take very long to build such an embedded banking product themselves or perhaps not at all if the right tech teams are not in place. Therefore, Flow provides them with the required front end and access to Adyen’s platform.
