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Embedded Fintech Versus Embedded Finance: What Is The Difference? – Wealth Tech Digest #24

Key takeaways

✅ Embedded Fintech Versus Embedded Finance: What Is The Difference?

Our first article today comes from Forbes.com and focuses on increasing our understanding of both embedded finance and embedded fintech. These are terms that have been used a lot in recent years, but writer Ron Shevlin has taken the time to offer some clear distinctions between the two terms to help our understanding. According to Shevlin, embedded finance is the integration of financial services into NON-FINANCIAL websites, mobile apps, and business processes. Essentially, embedded finance is all about enabling non-financial service companies to provide banking services. Embedded finance, or what some people call embedded banking, is set to generate $230 billion dollars in revenue by 2025. That’s over ten times the $22.5 billion in revenue we saw for the sector in 2020. And embedded finance may be a serious threat to incumbent financial institutions. But, as Shevlin points out, banks don’t have to just roll over and play dead. Where embedded finance targets non-banks, embedded fintech targets banks. Embedded fintech is the actual integration of fintech products and services into the toolboxes and processes of financial institutions.

According to Shevlin, embedded fintech opportunities include bill negotiation services, subscription management, data breach and identity protection, wealth transfer management, and even cryptocurrency investing. These are fintech products and services that have already been created by startups. And in order to remain competitive, banks need digital product development and deployment capabilities that go beyond simply managing a checking account. Shevlin says that when it comes to digitally-native Gen Zers and Millennials, the app IS the product. This is where embedded fintech products can become a part of the digital banking platforms of incumbent financial institutions and help them to remain competitive.

✅ Will Alternative Investment Platforms Level The Playing Field?

Next today we are going to take a look at London-based Bite Investments and their mission of democratizing access to alternative investments. Bite is a technology-enabled investment platform available to high-net-worth investors, independent financial advisors, wealth managers, family offices, and even other platforms. The company is focused on allowing much smaller investment amounts than typical buy-ins when it comes to top performing alternative investments. The company makes this possible by aggregating commitments together through feeder funds. And Bite has just announced the closing of its Pre-Series A+ funding in a round led by JMP Group LLC. The amount of the funding round has not yet been disclosed, but we do know Bite has secured over $10 million dollars to date from a range of strategic institutions, VCs, family offices, and high-net worth investors.

William Rudebeck is the CEO at Bite Investments. And Rudebeck says the company continues to attract progressive partners who recognize the steady growth of both the robust platform that Bite has developed as well as the soaring global private equities market. He believes that the financial industry and investor community are gravitating toward alternative investment opportunities. And the Bite platform is expected to level the playing field by offering investors turnkey access to highly sought-after alternative asset management products that have been out of reach in the past.

✅ LifeYield: Uncovering Potential Retirement Wealth

Our final article today looks at LifeYield, a wealthtech leader powering unified managed household or “UMH” platforms. These UMH platforms help advisors and firms maximize retirement income for clients from accumulation through withdrawal. LifeYield coordinates and optimizes the levers of cost, risk, tax, and Social Security in order to produce better financial outcomes and to quantify those benefits in dollars and cents. And according to businesswire.com, the company has emerged as a growth catalyst for financial advisors of all sizes in the last year. LifeYield’s Social Security+ software is currently in use by more than 90,000 advisors in leading financial institutions around the world. And between January and March of this year, it helped uncover an average of $148,000 dollars per investor household in potential added wealth. Businesswire reports that Social Security+ is available as both a standalone solution for advisors, as well as part of LifeYield’s robust API library of UMH technology.

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