Connect with us

Business

Are SaaS platforms challenging banks for a piece of the payments pie?

Source: Finance Derivative

Attributed to: Ralph Dangelmaier, Global CEO of BlueSnap

The finance industry is at a tipping point with software firms on the brink of becoming banks. This may seem like a farfetched idea, but now that software platforms come equipped with payment capabilities, their SME customers may want to receive more financial products from these platforms.

This is part of the wider trend of ‘embedded finance’ – when companies which aren’t banks incorporate financial services such as lending, insurance, and payments into their product.

Software firms are particularly leveraging ‘embedded payments’ – where the ability to accept and process payments comes with the software itself. Think of a school consolidating all the payments a parent would make for their children – tuition, books, extracurricular activities – in one software platform. This trend has exploded in popularity because there’s a desire among companies, and their customers, for everything from products to payments to happen under one roof.

With the market value of embedded payments expected to reach £2.08 trillion by 2026 and customers becoming increasingly married to their software, let’s look at how we ended up at this turning point in payments.

How chasing convenience puts money in platforms’ hands

The growth of embedded payments is propelled by the need for ease, trust, and convenience. As platforms are selling payments hand-in-hand with their software, customers don’t need to integrate with additional service providers just to accept payments. And they’re already bought into using the platform for its other functions.

Not only is this kind of back-end reconciliation easy and convenient but it helps software platforms generate revenue too. That’s because software companies that embed payments become Payment Facilitators (a.k.a PayFacs) – allowing them to monetize transactions that happen within their platform.

By selling payments, software firms can see up to a fivefold increase in value per client. Rather than depending on software subscriptions alone, these platforms now receive a cut of every transaction that’s facilitated using their software too. This provides them and the businesses they serve with a mutual incentive – shared profits.

Software platforms are passionate about helping their customers create the most easy-to-use experience to drive a higher volume of transactions. Of course, there are many ways to launch new revenue streams, but why leave money sitting on the table when all you have to do is become convenience-obsessed?

Why finance teams want software and payments in one  

As a payment expert who’s worked in a bank’s back office, I know how important a financial software stack can be. In its highest form, it can steer a business’ entire financial strategy.

Often these stacks are well curated, but the biggest drawback is the manual collection of data across platforms. Trying to build a financial picture of a business using your ERP, CRM, human resource and billing system can involve hours of laborious data entry.

For everyday finance teams, this isn’t an efficient use of time. They need to be able to pull data swiftly to advise their executives on financial strategies. CFOs are also under pressure to choose the right software stack to streamline processes and ensure payments ROI.

That’s why payment technology that removes the manual work for finance teams – to get from A to B more quickly – is growing in popularity.

Software firms using embedded payments are saving them hassle and time. Not only that, it helps the key financial decision makers of SMEs stay in a constant state of financial planning, where they can change their strategy whatever the market conditions may be.

The end of traditional banking for SMEs?

Increasingly, SMEs are struggling to get the payments support they need from traditional banks. The ‘higher risk, lower return’ view of the small business market among banks leaves software platforms in a ripe position for a takeover.

There are over 90,000 software companies in the UK alone. With nearly half of software platforms (48%) turning to embedded payments to gain a source of competitive advantage, this figure could represent a threat to corporate banking as we know it.

SMEs don’t have the deep pockets that multinational businesses have. The Amazons and BMWs of the world have long reaped the benefits of a corporate account with a large bank – and the round the clock support this offers.

But SMEs face high conversion fees and often receive minimal support chasing late payments, leaving them between a rock and a hard place. If these businesses can save money by moving from banks to software platforms, then banks are at risk of losing their position over the middle market.

Looming regulation

Until now banks have been able to defend their position because safety and security is key. Once platforms become regulated, then what? It won’t be long before regulators eye up the software industry as their next big focus.

But regulatory bodies like the FCA, PRA and more favour ‘controlled innovation’, so this will take time.

Currently, to process transactions in Europe, businesses must go down the lengthy and costly process of becoming Payment Service Providers (PSPs). That’s why many software platforms are choosing to partner with a licensed payment provider which sells the payment package to them, instead.

In fact, 89% of software platforms choose to work with PSPs rather than become a PayFac themselves. It makes sense when it’s taken more than a year for some platforms to begin processing payments on their own.

Given the sizable financial risk of processing your own payments and the administrative burden this brings, it’s no wonder software firms are looking to fintech for a better way.

After all, it’s not just about processing the payments. A partnership with a payment technology partner comes complete with support in onboarding, underwriting, compliance, risk, payouts and customer support.

In short, software platforms see the benefits of selling payments and are primed to become the next big financial players.

Not only is there revenue for the taking but their customers benefit as well. With software platforms ready to offer SMEs a banking alternative and a superior customer experience, they’re offering a truly win-win solution for all involved. And it’s payment technology partners that can help them make this vision a reality.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

The Quiet Strength of Being Clear – Why Assertiveness Matters More Than Ever for Founders

By Rebecca Sutherland, CEO and Founder of HarbarSix

There’s a word that often makes people shift a little in their seats. Assertiveness. It can sound sharp, maybe even a bit harsh, like something that belongs in boardrooms filled with ego or in negotiation books gathering dust on someone’s shelf. But in truth, assertiveness, when you really understand it, is one of the most compassionate tools we have as leaders.

Because at its core, assertiveness isn’t about being pushy. It’s about being clear.

And when you’re building something, a business, a team, a dream that lives outside the ordinary, that kind of clarity becomes essential. Without it, you end up drifting, making decisions that don’t feel quite right, saying yes when you mean no, and slowly watching the thing you once felt lit up by become a source of tension or exhaustion.

I’ve seen it happen more than once. A brilliant, creative founder full of drive and vision, slowly ground down by too many compromises, too much people-pleasing, too little space to breathe. They don’t lack skill or ambition. What they’re missing is that anchor, the ability to be assertive without feeling like they have to apologise for it.

So, let’s unpack that, because I think we need to talk about how to lead from a place that’s both strong and soft. Firm but open and rooted in who you are.

Assertiveness starts with self-trust

Before you can speak clearly to others, you must be clear with yourself. What do you stand for? What kind of culture are you trying to build? What do you value, not just on a branding level, but deep in your bones?

Because if you don’t know that, you’ll find yourself pulled in all directions. You’ll agree to partnerships that don’t serve you, hire people based on panic rather than alignment, and find it hard to hold boundaries when the stakes feel high.

But when you do know—when you’ve taken the time to understand what really matters to you—it becomes easier to communicate it, calmly and confidently, even when it’s uncomfortable.

Saying what you mean isn’t unkind—it’s respectful

There’s a misconception, especially among founders who want to be “good” leaders, that being direct is somehow abrasive. That if you’re too clear, you might upset people. But in my experience, the opposite is true.

When you wrap your truth in too many layers of softening or delay saying the hard thing because you’re worried about how it will land, you actually create more confusion, not less. People want to know where they stand. Your team, your investors, your clients—they respect leaders who can speak with warmth and certainty.

You don’t need to bark orders or dominate a room. But you do need to be able to say, “This isn’t working for me,” or “This direction doesn’t feel right,” or even, “I’ve changed my mind.” That kind of honesty is a form of care. It protects your energy, and it gives everyone around you a clearer playing field.

Boundaries aren’t barriers—they’re invitations to trust

One of the most powerful forms of assertiveness is knowing when to say no. Or not yet. Or not like this.

As founders, we’re often wired to keep giving—to clients, to our team, to the business itself. But that constant giving, without boundaries, leads to burnout. And more than that, it models a kind of unsustainable leadership where overextending becomes the norm.

Boundaries, when set with intention, are not walls. They’re signals. They say, “This is how I work best,” or “This is what I need to stay at my best,” or “Here’s the line where my role ends and yours begins.” And far from pushing people away, they create the safety and trust needed for real collaboration.

Not everyone will like it—and that’s okay

Here’s the part that might sting a little: not everyone will like your assertiveness. Some people will bristle when you stop bending over backwards. Others may be used to you saying yes to everything, and might struggle when you start to reclaim your space.

Let them. Your job isn’t to be liked by everyone. Your job is to build something honest, sustainable, and true. And the people who are meant to walk alongside you? They’ll stay, in fact, they’ll probably thank you for the clarity.

Practice before you need it

Like any skill, assertiveness gets easier with practice. Start small. Have that conversation you’ve been avoiding. Say no to the next thing that doesn’t feel aligned. Express a need clearly without over-explaining. And then do it again. Not perfectly, just consistently.

If you’re not used to it, it might feel clunky at first. That’s okay. Clarity is a muscle. The more you use it, the stronger it gets.

The most powerful leaders are not the loudest

They’re not the ones who dominate meetings or chase visibility for its own sake. They’re the ones who know who they are. Who can sit in discomfort without losing their footing. Who can say the hard thing with softness and stay true to their vision when the noise gets loud.

Assertiveness isn’t about power over others—it’s about being in your own power. And when you lead from that place, it changes everything.

For your business. For your team. And most importantly, for you.

Continue Reading

Business

Innovation in banking must go hand in hand with security, and here’s why

Dean Clark, Group Chief Technology Officer for GFT

The banking sector is transforming more and more, with banks under pressure to meet customers’ evolving expectations. This means that even the most traditional institutions have to move away from legacy systems and adopt modern technologies such as cloud computing and AI. The aim of this shift is not just to keep pace with digital-native competitors, but also to improve operational efficiency and deliver better customer experiences.

However, innovation brings new challenges. Transitioning from centralised mainframes to cloud-based platforms is a complex process that can’t happen overnight. Amid this transformation, banks must ensure that security remains a top priority. Striking the right balance between modernisation and robust security is essential to building and maintaining consumer trust in the digital age.

Balancing agility with security

Multicloud is a key component of digital transformation strategies in the financial sector. Many banks are relying on hybrid multicloud to modernise and keep up with the evolving tech landscape. In the meantime, new digital banks are launching entirely on cloud-native platforms, which helps support agility and scalability from day one.

Cloud technologies offer many advantages, including improved performance, flexibility and faster innovation. However, despite these benefits, they do come with security challenges. Cloud infrastructure, often built and managed using Infrastructure as Code (IaC), can include some vulnerabilities and give an entry point into a bank’s system to malicious actors. As such, ensuring that IaC adheres to best practices is essential to avoid misconfigurations or exploitable vulnerabilities as early as possible.

The protection of consumer data must also be central to any digital transformation strategy. Security must be deeply embedded not only in backend infrastructure but also in the user-facing layers such as web portals and mobile applications. This is critical to maintain consumer trust and improve retention.

Why a unified security platform is essential

When undergoing digital transformation, financial institutions need a unified security solution to help streamline the security management process by having all the necessary tools in one place. In fact, a unified security solution is built on three interconnected pillars. First, security must be embedded directly into development pipelines. This integration helps identify and mitigate risks and misconfigurations early, before they can impact production. Second, through continuous monitoring and management of cloud assets, banks can gain more visibility and control over their security posture. Third, runtime protection safeguards cloud workloads, web applications and APIs through tools like cloud threat detection, host security, container security, serverless security, and web application & API protection. Together, these pillars help to establish a robust security framework. This way, digital banks can minimise risks, streamline operations and ensure compliance with regulatory demands.

The benefits of ‘zero trust’

Modern cloud-native banks rely on ‘zero trust’ security models more and more. ‘Zero trust’ refers to the principle according to which every request to access an organisation’s system should be carefully reviewed. This means that no user or system is trusted by default. They’re all subject to identification and authentication checks. This helps set clear boundaries between the applications the users are accessing and the resources available in the cloud. And even after access has been granted, all activity is monitored on an ongoing basis to identify potential malicious behaviour that could compromise digital banking systems. This continuous verification enhances visibility into potential threats and facilitates compliance with regulatory standards.

To further reinforce security, mutual transport layer security (TLS) can be implemented as a core design principle, enabling secure authentication with third-party entities over the internet. By adopting such measures, digital banks can build a resilient security foundation that safeguards against evolving threats whilst preserving customer trust and operational integrity.

The example of Salt Bank

Salt Bank is a next-generation digital bank launched in Romania. It serves as a good example of a financial institution that embedded security into its digital banking platform from the start. Salt Bank was built and launched in under 12 months, showcasing the power of an approach to innovation that heavily relies on security.

Salt Bank implemented a range of advanced security measures, including zero trust architecture, threat modelling, cloud security posture management, and automated security operations, guided by this security-by-design philosophy. These tools helped the bank implement a strong defence against cyber threats whilst still focusing on improving customer experience.

Central to Salt Bank’s strategy was Engine by Starling, a SaaS platform designed specifically for digital banking, paired with Palo Alto Networks’ Prisma Cloud. Prisma Cloud played a key role in securing the bank’s cloud infrastructure, offering capabilities such as misconfiguration monitoring, risk detection, remediation and compliance management. Together, these technologies provide a unified and efficient approach to managing security in a complex cloud environment.

The future of modern banking is all about security

As digital transformation accelerates across the financial sector, companies must keep security at the top of their agenda. Whilst innovating is key to keeping up with evolving trends and changing customer expectations, it can’t be done without prioritising security. If security isn’t embedded in every layer of an organisation’s digital infrastructure, vulnerabilities may be introduced within the system and easily exploited by malicious actors. And once cyber attackers are in the system, everyone knows it can lead to chaos.

But security isn’t just for defensive purposes, it’s also a strategic advantage. In a climate of growing digital distrust, the most secure bank doesn’t just win compliance, it also wins customers. By choosing to turn advanced security into a visible product feature, not just an internal practice, banks can build marketable trust and differentiate from fintech challengers who may cut corners in pursuit of speed.

Continue Reading

Business

Why heat pumps are the future of heating and cooling

Drew Tozer

We live in a technologically advanced world with artificial intelligence, electric cars, and advancing space travel.

But our primary strategy for heating homes is still “burning stuff”.

We pump gas, propane, or oil into a traditional furnace and light the fuel on fire to keep houses warm. It’s an archaic solution—like sending a fax instead of an email.

Furnaces are popular because the majority of HVAC is replaced in emergency “no heat” situations. The default option becomes a like-for-like replacement (swapping an old furnace for a new furnace) because it’s quick and easy.

HVAC is a top 5 most expensive purchase that a homeowner will make in their lifetime, and we rush the decision by ignoring equipment until it breaks.

Choosing the right HVAC system is an opportunity to improve homes. HVAC is the biggest factor for indoor comfort and air quality, and the chance to pick the right system only comes around every 15 to 20 years.

Heat pumps operate like two-way air conditioners. In the winter, they take heat (energy) from the outside air and use it to heat homes.

So, what makes heat pumps the right decision?

Because electric products are just… better

Consumer experiences matter, and electric products create better experiences. The quality of electric appliances (like heat pumps, electric vehicles, induction cooking, and electric yard tools) surpassed gas alternatives in recent years.

For now, there continues to be a place for gas appliances in niche situations. But the overwhelming consensus is that electric products are better than gas products

A few examples:

  1. Oversized furnaces are the primary cause of comfort issues. Heat pumps are the direct solution—they can be properly sized to match the heating and cooling needs of a house, improving comfort and eliminating hot and cold rooms.
  2. EVs are more fun to drive, while being quicker, quieter, more convenient, and lower maintenance. The stress of “range anxiety” has largely disappeared with better infrastructure and battery performance.
  3. Electric yard tools are quieter, safer, and lower maintenance than gas tools.
  4. Gas stoves increase the risk of asthma in children. Induction is safer and healthier while offering similar control and faster boiling times.

The performance gap of electric over gas is growing. Every generation of electric products takes a leap forward while gas appliances stay largely the same.

Over the last decade, gas furnaces have increased from 90% to 97% efficiency. That’s the only change.

By comparison, cold climate heat pumps achieve efficiency ratings above 300% by moving heat instead of burning fuel to create heat. Heat pumps continue to improve, both in efficiency, reliability, and cold weather performance. They’re a proven success in cold climates like Canada, Sweden, Denmark, and Norway.

Heat pumps can also be sized to provide the right amount of heating and cooling at any given time, and the lack of combustion eliminates the risk of carbon monoxide poisoning, gas leaks, and explosions.

A sustainable world is an electric world

The cost of ignoring climate change continues to grow.

There’s no way around it. Ignoring climate change won’t solve it.

The frequency and severity of wildfires in North America are a key example. Large parts of the US are becoming uninsurable as the damage risk becomes untenable for banks and insurance companies.

These aren’t political choices, it’s the free market working: climate change is bad for business.

When we choose to not take action, it increases pain and suffering without decreasing the economic burden. We’ll have to implement the same solutions, but we’ll have to pay more to rebuild and replace more infrastructure and homes along the way.

Delaying action is the more expensive choice.

Heat pumps are part of the solution because they create a path to sustainable heating. They can be powered by renewables, either on-site or within grids.

We have access to the cheapest source of electricity in human history: solar. We choose not to embrace and scale renewables for political reasons. It’s a people problem, not a technical one.

We’re fortunate that the sustainable option (heat pumps) is also the choice that improves the comfort, health, and safety of homes.

Energy (in)dependence matters

Heat pumps and renewables allow homeowners and countries to heat and power their homes with local energy. It makes homes and communities resilient against geopolitics and global energy costs.

A house can be entirely energy independent by combining a heat pump and electric appliances with rooftop solar and battery storage.

Conversely, you can’t extract and refine oil in your backyard. If you rely on combustion heating, then you’re dependent on the person or country that supplies your oil and gas. A situation that played out with Europe’s reliance on Russian gas.

In the tenuous landscape of global politics, energy dependence is a risk.

Heat pumps are the future of heating and cooling because they create a path to sustainable heating powered by renewables. They create comfortable, healthy, sustainable homes that benefit from energy independence and improve consumer experiences.

Continue Reading

Copyright © 2021 Futures Parity.