February 2, 2024

Will every company be its own bank by 2034?

Thanks to the proliferation of embedded finance, any company can now offer financial services. But could embedded finance enable a company to act as its own bank?

Sarah Drumm

4 min read

Sponsored by


Embedded finance products like Buy now, pay later (BNPL) have exploded in the consumer space, and companies are increasingly looking to embedded finance to augment their product offerings. 

It’s gaining traction with an estimated $7trn of transactions to be made via embedded finance by 2026. 

But as software is becoming easier for companies to use, will it soon be possible for any company to function as its own bank?


“We’re already starting to see that, with [solutions] that offer you accounts, payment capabilities or anything you would need to transact with the exception of lending,” says Harsh Govil, a principal at Motive Ventures. 

The value of embedded finance now 

Many businesses share a common financial frustration. They have their accounting software and they have their bank accounts, but the two seem to have no way to speak to each other. 

The result is a lot of time-consuming admin: checking if payments have come in, updating internal accounting software, finding invoices and entering numbers manually to make payments via online banking portals. 

A manual payment process might take 30 minutes, whereas it can be done in seconds [with embedded finance software].

Embedded finance makes these tasks seamless, giving companies more control over their cash flow. “A manual payment process might take 30 minutes, whereas it can be done in seconds [with embedded finance software],” says Feargal Brady, the cofounder of NoFrixion, an Ireland-based scaleup that provides digital current accounts that can be embedded into businesses. “For many of the businesses we have spoken to, there is no way for them to grow without automating their financial workflows.”

One of NoFrixion’s customers, the accounting platform Klyant, uses the company’s MoneyMoov API to help its estate agent and law firm clients spend less time on banking admin. 

“Our typical estate agent client will manage hundreds of properties,” says Klyant’s CEO, John Gilmartin. “They receive monthly rental payments from tenants, and each month their admin teams have to pay tradespeople, transfer agent management fees and remit money to landlords. An agent with 500 properties might be processing 2,500-plus transactions throughout the month.”

For many of the businesses we have spoken to, there is no way for them to grow without automating their financial workflows.

Chris Adelsbach, the founding partner of Outrun Ventures and one of Europe’s most prolific fintech investors, says banking-as-a-service (BaaS) products offered by fintechs have a far lower cost than traditional banks, which have “cost-to-income ratios that are often in excess of 50%”. 

“Embedded finance, facilitated by technology, allows for more cost-efficient delivery of financial services, making it an attractive investment option,” he says.  

Becoming your own bank

Aaron Clauson, NoFrixion’s cofounder and CTO, says the company is currently working on adding additional features, including Treasury, Money Market funds access and automated accounts payable/receivable.

Clauson adds that the goal is to provide a better banking experience through ‘MoneyMoov for Business. This is built using the MoneyMoov API and aims to demonstrate how a company can build the banking experience they need. 

The adoption curve is headed in the right direction.

It’s not quite the same as a company being its own bank — but it is certainly getting closer. As embedded finance APIs become more widely adopted, Brady says that more companies outside of the world of fintech could start offering regulated business banking services within the next 10 years. 

“Enabling this requires every business to have its own core banking system embedded within its own [management software], enabling direct connectivity to the global payments rails. Treasury functions, credit and other banking services will be obtained from third parties — perhaps banks, perhaps not.”

Before they can get there, embedded finance firms need to focus on getting more companies to use their services. According to one recent survey, while 83% of small and medium-sized businesses want to start using embedded finance services, only 9% actually do. 

“The adoption curve is headed in the right direction,” says Govil. “But outside of tech and software, it’s going to take time to get [companies] on board. With large enterprises, you’d be shocked by how much is still on-premise versus cloud.”

Embedded finance startups will need to convince companies they can not only make their lives easier, but do it without falling foul of regulators. In recent years, several BaaS providers have had restrictions placed on them, including UK fintech Railsr and Germany’s Solarisbank.

“A big challenge is regulatory compliance, which is demonstrated by the sheer number of BaaS players who have had to upgrade their compliance standards recently,” says Adelsbach. “This is increasingly challenging when an embedded finance firm gets overly ambitious and expands into diverse geographies.”

In September, NoFrixion announced it had secured Electronic Money Institution authorisation by the Central Bank of Ireland, allowing it to move funds on behalf of customers and giving it the green light to roll out across Europe.