Fierce Competition in Digital Banking to Attract Deposits; How To Build Stablecoin Routes; Why Embedded Small Business Lending Makes Sense;
This week’s edition is packed with fresh insights into embedded lending, AI’s transformation of business process outsourcing, the fintech IPO pipeline
Insights & Reports:
1️⃣ Why Embedded Small Business Lending Makes Sense
2️⃣ The Impact of AI on BPOs and Where the Opportunity Lies
3️⃣ These fintech players could be next to hop on the IPO train
4️⃣ Fierce Competition in Digital Banking to Attract Deposits
5️⃣ How To Build Stablecoin Routes
7️⃣ The Three Different Approaches in Global Payments
8️⃣ Voice AI has not only reached par with humans; in some cases, it’s better
9️⃣ Ramp secures $13 billion valuation in deal allowing employees, investors to sell shares
🚀 By the way, my team and I are working on an AI-powered financial infrastructure for fintechs
We want to help companies in fintech vertical with automated reconciliation, bookkeeping, and operational ledger management, on top of all financial products.
But before we launch, I’d love to hear from you! What challenges do you face, and what solutions would make a difference for you?
📩 Drop me a message on LinkedIn or Twitter, or Book a Slot with Me if you’d like to learn more or get an early peek!
TL;DR:
This week’s fintech landscape is buzzing with fresh developments. Embedded lending is becoming a no-brainer for small businesses as platforms like QuickBooks and Square integrate financing directly into their ecosystems. Instead of seeking external loans, business owners can now access credit where they already manage their operations, giving lenders better insights and reducing underwriting risks. This trend is only getting stronger.
AI is shaking up the business process outsourcing (BPO) industry. Customer service is getting a serious upgrade with AI agents that handle queries instantly, across any language, without the long waits. Meanwhile, back-office tasks like reconciliation and fraud detection are being streamlined with AI-driven automation, cutting operational costs and boosting efficiency.
On the fintech IPO front, the market is finally warming up. With $7.4B in fintech exits last quarter, companies like Stripe, Ramp, Gusto, and Brex are emerging as top contenders. Stripe’s recent acquisition of a stablecoin firm hints at a major crypto push, while Ramp is expanding into digital banking. Even Revolut is considering a Nasdaq listing. If momentum holds, 2025 could be a big year for fintech public offerings.
Digital banks are going all-in on deposits. Openbank tripled its deposit base last year, bringing in €22.5B and significantly boosting Santander’s earnings. Chase UK, launched just three years ago, has already attracted £15B in deposits. As interest rates rise, digital banks are leveraging high-yield accounts to compete with traditional institutions, but the real challenge is sustaining long-term growth beyond just deposit incentives.
Stablecoins continue to reshape global payments, but setting up a reliable payment route is more than just tech — it’s about compliance, KYC, and seamless fiat conversions. A new guide from Dfns breaks down the essentials for businesses looking to integrate stablecoins into their operations. On the institutional side, J.P. Morgan’s Kinexys system is making waves by enabling real-time cross-border settlements without prefunding, potentially revolutionizing treasury operations.
Looking at payment infrastructure globally, three distinct models are evolving. Traditional card networks like Visa and Mastercard still dominate, but closed-loop ecosystems such as WeChat Pay and Alipay have become the backbone of digital payments in Asia. Meanwhile, open public systems like India’s UPI and Brazil’s PIX are setting new standards for real-time, low-cost transactions. With regulators pushing for more open networks, traditional card rails may soon have serious competition.
Voice AI is also making serious strides in financial services. With improved latency and contextual understanding, AI-powered voice agents are reaching human-level capabilities, and in some cases, customers actually prefer them. The challenge for financial institutions is ensuring compliance, integrating legacy systems, and building domain-specific expertise. As AI adoption scales, expect to see a growing role for voice-driven banking and support services.
A few key fintech updates to wrap up: Taktile raised $54M to scale AI-driven decision-making in financial services, Green Dot and Marqeta are partnering to expand cash deposit services across 95,000+ locations, and Ramp’s valuation hit $13B in a secondary sale, signaling strong investor confidence in B2B fintech.
That’s it for this week. As always, fintech is evolving fast, and I’ll be here to keep you updated.
Insights & Reports
Why Embedded Small Business Lending Makes Sense
A very insightful article by Alex Johnson
Small business owners start their businesses to focus on their craft, not administrative work. However, managing finances and operations is an unavoidable part of running a business. To minimize time spent on these tasks, many small businesses turn to Small Business Operating Systems (SBOSs) — software platforms that consolidate essential business functions. Companies like Intuit QuickBooks, Square, and Shopify have built successful SBOSs by streamlining administrative tasks and offering integrated solutions
👉 The Competitive Landscape of SBOSs
Acquiring small business customers is notoriously difficult due to their short lifespan (8.5 years on average) and lack of centralized communities. This gives established SBOSs like Intuit and Square a competitive advantage as their well-known brands naturally attract new business owners. Their broad product offerings further help maximize customer lifetime value (LTV) while keeping acquisition costs (CAC) low
For new entrants, the best strategy is to build vertical-specific SBOSs that cater to niche industries. Brightwheel, for example, provides tailored solutions for childcare providers, offering integrated curriculum development and digital admissions. While it lacks mass-market brand awareness, its industry-specific features drive strong customer loyalty and word-of-mouth growth. These vertically focused SBOSs, like their larger counterparts, handle multiple business functions, leading to high LTV:CAC ratios
The Impact of AI on BPOs and Where the Opportunity Lies
🔹 Front-office customer experience
One of the clearest opportunities for AI startups is in customer support and customer experience, which makes up the largest subsegment — over $100 billion — of BPO spend.
Everyone has felt the pain of an automated customer service experience gone wrong. If your request doesn’t have an easy, pre-defined answer and resolution, you’re almost always shunted into a flow that involves calling an automated number and then demanding to speak to a human agent, futilely emailing a customer service email alias, angrily arguing with a chatbot that has no context, or some combination of the three.
With AI agents, companies can now provide first-class, in-house customer experiences across all modalities (text, email, voice) at the speed, quality, and scalability of software. These agents can work 24/7, resolve queries in any language, and respond instantaneously without queues or wait times — all without needing to hire, train, and retain in-house headcount against inconsistent demand.
Industry-specific AI agents are also successfully productizing their industry’s core BPO use cases. In home services, Avoca allows customers to productize the off-hours or overflow calls their own in-house staff can not handle (which they previously handed off to outsourced call centers). These vertical use cases are especially interesting because of the product complexity, platform integrations, and industry-specific regulatory requirements they address. These characteristics make it more difficult for horizontal players or foundation models to easily subsume these use cases, giving these startups a more enduring moat over time.
Curated News
Ramp secures $13 billion valuation in deal allowing employees, investors to sell shares
The New York company announced the $150 million deal Monday. Khosla Ventures, Thrive Capital and General Catalyst were among the entities that bought shares in the round. The financing marks a step up from Ramp’s peak valuation of $8.1 billion in 2022. Ramp also raised a so-called down round that pegged the company’s price closer to $5.8 billion in 2023. The rebound in value shows some renewed investor appetite for high-growth startups, even in an era of higher interest rates.
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