bedded finance adoption is moving fast, according to a recent World Economic Forum op-ed, which asserts that the financial services industry’s future leaders will be those who “embrace collaboration, intelligence and inclusion.” These points are powerfully reinforced by a Dealroom and ABN AMRO Ventures report showing that the global market is on course to grow to $7.2 trillion in size by 2030.

For established financial institutions, joining the embedded revolution offers numerous benefits. These include the potential for new revenue streams generated by seamlessly offering financial services like payments, lending, or insurance within non-financial platforms. Embedded finance also allows banks to tap into partner companies’ existing client bases, increasing customer acquisition at a reduced cost. Additionally, financial institutions can enjoy higher conversion rates for their products.

Beyond customer acquisition, embedded finance streamlines operations, enabling banks to go-to-market faster with new products and offer improved customer experiences which, in turn, enhances customer loyalty. Banks also gain valuable access to new customer data, leading to greater product personalization. Furthermore, the model can support compliance if partner platforms understand the regulatory landscape and share a commitment to managing risk. 

These combined benefits make embedded finance a powerful tool for banks and other financial entities seeking to innovate, extend their reach, and enjoy greater efficiency.

Navigating entry: options for capturing the embedded finance opportunity

Given the clear and compelling case for entering the embedded finance market, the strategic question for financial institutions then becomes: how to effectively, compliantly, and efficiently capture this opportunity? There are three possible routes:

1. Build your own embedded finance platform and APIs. This avenue involves investing in developing your own technology platform and open APIs. But it requires significant internal technology investment, resourcing in-house development expertise, and a strategy for marketing your APIs to potential partners.
2. Partner with an embedded finance platform provider. Instead of building everything internally, banks can partner with technology companies that specialize in enabling embedded finance. However, propositions vary across the market, with some providers offering everything from connections and systems integrations to program management, while others might only deliver the tech.
3. Become a sponsor bank: This is a highly effective primary model where an established financial institution strategically leverages its banking license. By partnering with a comprehensive enabler like Atelio, which provides the essential tech platform, expert program management, and access to fintech partners, the sponsor financial institution can optimize the value of its regulated financial infrastructure (including deposit accounts, card issuing, and payments processing capabilities). This integrated approach allows the bank to empower partners to offer financial services directly under their own brand, opening up valuable new distribution channels and revenue streams. While the sponsor bank retains core regulatory responsibility, this partnership model offers a streamlined and powerful path to market expansion. That’s because it maximizes the utility of the bank's core assets, distinguishing it from less integrated sponsorship arrangements.

And now to dig deeper into the sponsor bank approach

Atelio for Brands: your trusted program manager for seamless embedded finance enablement

FIS’s embedded finance platform, Atelio, enables established financial institutions to leverage their banking licenses and technical capabilities to act as sponsor banks - facilitating financial innovation in new, untapped markets. 

Atelio is much more than a technology provider: we offer the structure, systems, expertise, and program management needed to deliver secure and compliant embedded finance products and services. 

Our proven methodology is encapsulated in our structured sponsor financial institution lifecycle, ensuring a clear and supported journey through three distinct phases:

• Discovery & diligence: Becoming an Atelio sponsor financial institution involves, as you’d expect, a rigorous discovery and diligence process across technical, operational, and compliance domains. This entails detailed questionnaires, a proprietary scoring model, and cross-functional collaboration - all of which sets the stage for a streamlined implementation with assigned resources ready to "hit the ground running."
• Implementation: With dedicated project teams secured, Atelio will meticulously guide your financial institution through crucial workstreams, including corporate and functional diligence reviews, and setup for initial products like card issuance, money movement, and accounts. We’ll then establish robust processes for data sharing, reconciliation, compliance, and operations before preparing for the launch of an Atelio test brand program.
• Scale & growth: During this phase we will actively present you with a pipeline of qualified brands, facilitating crucial tri-party meetings for direct engagement as needed. We also manage the workflow for finalizing brand program approvals and documentation, oversee testing, and support successful pilot launches leading to general availability and scaling. Through dedicated relationship management by our Partnerships team - supported by, Compliance, Product, and Financial Operations, and regular business reviews, and open communication - we ensure the partnership remains sustainable, while you achieve ongoing value. 

Beyond this structured lifecycle management, Atelio provides crucial operational support that differentiates its offering. For instance:

• Comprehensive compliance management: At Atelio, we lead with a "compliance first” mindset, managing robust transaction monitoring, and conducting comprehensive KYC/B and OFAC screening. We also operate a rigorous brand diligence process to vet potential partners against defined risk tolerance. At the same time, you will be provided with access to tools for oversight and transparency into these processes.
• Robust data sharing and reconciliation: Atelio ensures accurate and compliant data exchange and reconciliation by managing standard data files shared with our sponsor financial institutions. We hold ourselves to a higher standard of reconciliation, using in-house software that automatically detects variances. Following a collaborative process with defined timelines, Atelio guarantees timely resolution.
• Testing support: Atelio develops comprehensive test scenarios and testing processes to deliver platform reliability and brand compliance before any program launches. This expertise and methodology are leveraged throughout the implementation and scaling phases to ensure you always work from a solid operational foundation.

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Partnering with FIS Atelio: ready to take the next step?

Through dedicated cross-functional teams, robust data sharing, and access to key tools, Atelio will accelerate your time to market and simplify ongoing program management. 

A partnership with FIS means collaborating with experienced personnel and leveraging a proven platform to enter the world of embedded finance with confidence. We provide the technology infrastructure, operational support, and market expertise needed to move from initial interest to scaling robust programs. Our structured lifecycle ensures clarity and support at every stage, and is purposely designed to help you realize the full benefits of this transformative opportunity.

Atelio will empower your financial institution to confidently deliver innovative embedded finance experiences, ensuring a smooth, compliant, and profitable journey in this transformative market. 

To explore how your financial institution can become an embedded finance market leader and open new growth avenues by partnering with Atelio, we invite you to learn more.

Talk to an Atelio embedded finance expert today atelio.com/contact-us