Turning Payments Into Deposits: The New Frontier in Embedded Banking

The evolution of financial technology continues to reshape banking, turning its focus towards deposits—a traditionally stable segment—as new opportunities emerge for embedded banking, as stated in PYMNTS. As Jon Briggs, EVP of Commercial Products and Innovation at KeyBank, highlights, “Money is becoming more mobile and will be living in different ecosystems. You need to be in that game to attract, grow and retain deposits.”

At a recent panel, Briggs and Ingo Payments CEO Drew Edwards discussed how technology and partnerships between banks and FinTechs could drive deposit innovations, enhancing money mobility within integrated financial ecosystems. For instance, FinTech solutions now allow deposits from digital transactions to be stored in newly created accounts—whether it’s a customer loyalty program or a closed-loop payment ecosystem. Edwards notes, “It takes money mobility and enables it to be embedded in these software experiences.”

Regulatory adjustments are also at the forefront, with the CFPB’s Rule 1033 introducing new compliance expectations. Briggs anticipates that the coming years will reveal the impact of regulatory changes on deposits. Compliance and robust risk management, he suggests, will be crucial for FinTechs looking to thrive in this evolving space. “These large, sophisticated enterprises want to know where that money is, who’s standing behind it, and they want to understand the risk wrapper,” Briggs said.

Embedded banking is more than a trend—KeyBank has invested heavily in it over the past four years, foreseeing new business models and growth. As demand for deposit accounts grows, especially those integrated into clients’ enterprise systems, banks and FinTechs will likely partner to build efficient, regulated, and flexible solutions.