It doesn’t take long to spot embedded finance in the wild. Financial services are becoming part of the stack for non-bank technology companies of all shapes and sizes – from NetSuite and Spotify to gaming company Razor and ride service Lyft. But building a FinTech product from scratch is no easy task. That’s why Envestnet |Yodlee and FinTech startup Productfy are now partnering to offer a single platform to enable quicker development of financial products and solutions.
We recently co-sponsored a webinar to explore how this new partnership will make it possible to launch a FinTech app in as little as three weeks. Titled “Accelerating FinTech Development with Embedded Finance”, this webinar included leaders from both firms. The following insights represent this conversation featuring:
• Duy Vo, Founder and CEO of Productfy
• Jeff Cain, VP, Strategic Partnerships, Envestnet | Yodlee
• Seb Taveau, VP, Developer Experience, Envestnet | Yodlee
1. FinTech is the ecosystem that underpins all other tech ecosystems
Lots of other “tech” ecosystems are grabbing the headlines lately – InsureTech, PropertyTech, InvestTech – but FinTech, including embedded finance apps, will still provide the foundation. “Account aggregation and verification are kind of the base of FinTech in the same way your program won’t work without an operating system“ said Jeff Cain, Vice President of Strategic Partnerships, Envestnet | Yodlee. Seb Taveau, VP of DevX for Envestnet | Yodlee, agreed, noting “all these other ecosystems at some point in time will need a way to either link accounts, move values or access data that will make their experience better.”
2. Embedded finance ultimately is about removing complexity
Embedded financial products can be complex for everyone involved – from the company offering the product to the end user relying on it. According to Taveau “embedded finance is when you havethe financial components removed from the complex equation of delivering the user experience, butpart of the full flow of the experience that you need to do.”
Productfy’s CEO Duy Vo equates removing complexity to accelerating businesses processes, adding functionality and removing risk. “We are, in effect, building the first ever distributed financial infrastructure where we’re able to route transactions and deposits and create this entire ecosystem that enables any company to launch a financial product in as little as three weeks and wrap it all inside a unified layer of technology, API widgets, program management, compliance and due diligence,” he said. “So out of this, our clients get a breath of functionality because we're able to distribute this infrastructure across this network of partners that we have underneath and redundancy so that we remove the systematic risk of a single point of failure.”
3. Today’s embedded finance apps will need to offer a full picture of someone’s financial life.
“Today, we are in a new world” said Taveau. “There was clearly an acceleration of digitalization as consumers started looking at their finances very differently during the pandemic.” He noted it’s critical that embedded finance applications leverage as much data as possible “because you want to give (users) actionable insights, as there’s nothing worse than giving the same, plain vanilla advice to everyone”.
4. Tools like open-source GraphQL and Envestnet | Yodlee’s FastLink are important.
GraphQL is gaining traction because of the way it can speed up app development. Both Envestnet | Yodlee and Productfy are fans of this open-source query language. Said Envestnet | Yodlee’s Taveau, “GraphQL is a layer that removes the complexity of dealing with APIs and data access. Plus it’s super simple to use.” Profuctfy’s Vo agreed saying, “GraphQL enables you to build the data you want, rather than have it be something that’s fixed.”
Vo also called out Envestnet | Yodlee’s own FastLink as he demoed the Productfy platform during the webinar, showing how this tool – which can be easily added to any FinTech app – gives users the ability to aggregate their accounts and view their finances all in one place.
5. This partnership is more than the sum of its parts.
What started in an incubator program has quickly grown into a full-fledged partnership. “Two years ago when I was running Envestnet | Yodlee’s incubator, Duy came to me with an idea to build a single platform with all the “OS” stuff underneath it. And today we’re built deep into the Productfy solution” explained Cain.
Through the partnership, FinTech developers who use Productfy’s platform will have immediate access through a single interface to Envestnet | Yodlee’s best-in-class data aggregation and account verification services. Which are “absolutely critical because without them a lot of the magic doesn’t happen” said Vo. “That includes everything from being able to do instant account verification for better money movement, to using the data add to work through micro-deposit verification.”
“There’s a huge breadth and depth of data that Envestnet | Yodlee provides us. You can pull down credit transaction amounts, asset types, asset IDs, whether or not a person’s identify has been verified through KYC , their credit line, their trade line and so on” said Vo. “Envestnet | Yodlee, having been around for a long time and having this huge network, allowed us to really build this great platform.”
For more details and additional insights , we invite you to listen to this 60-minute conversation in its entirely by visiting Accelerating FinTech Development with Embedded Finance.