FinTech Transformation in 2024: Leveraging AI in Embedded Finance

By 2025, embedded finance will transform the way payment transactions are carried across e-commerce platforms and banks. Small businesses will never require a bank account to run their payment processes, creating new types of customer experiences with streamlined financial transactions using cards, wallets, and cryptocurrencies. As fintech organizations embrace the power of AI and machine learning capabilities, the embedded finance industry could reach $40 billion in revenues in the US, double of what it was in 2021. To make embedded finance goals attainable, software developers and ISVs are joining forces to integrate commerce, banking, customer services, and payment technology under one roof. In our latest AiThority Interview Series, we sat down with the CEO of Maast, Tom Bell. Headquartered in Atlanta, Maast was founded in 2022 as a money-as-a-service provider, backed by Synovus Bank, member FDIC.

Here’s the full interview with Maast CEO about his thoughts on embedded finance and AI in the payment industry.

Hi Tom, welcome to the AiThority Interview Series. Can you walk us through your journey to becoming CEO of Maast?

I’ve enjoyed a 40-year career in technology, fintech, banking, and payments, and I’ve worked with established, reputable, and highly successful companies and some truly remarkable people. I’ve seen firsthand the value of a strong connection between banking and payment acceptance, which has shaped my vision for integrating software, payment, and banking experiences.

I started my career with Anderson Consulting (later Accenture) in Atlanta, working there for 25 years. Over the next 16 years, I held leadership positions with multiple banks and other financial services organizations. I joined First Data when KKR was taking it private and served as EVP of Corporate Strategy. As part of that process, I helped create the joint venture between Bank of America and First Data to launch the new Bank of America Merchant Services, serving as its CEO. Then I became CEO of Merchant E-Solutions, a small platform processor.

Subsequently, I worked in the software and payments space before landing at Synovus, one of the nation’s most reputable and stable regional banks. Synovus was the perfect breeding ground for what I wanted to do next: launch innovative financial services and business solutions. This resulted in starting of Maast, a wholly owned subsidiary of Synovus aimed at making true embedded finance attainable.

How does Maast remove tech and operational barriers so software providers can focus on what they do best?

If embedded finance were easy, everyone would do it. Integrating financial systems across industries, adhering to multiple compliance regimes, and then creating a frictionless, white-labeled experience for payment acceptance and banking has uncovered an array of challenges.

At Maast, we take care of everything: the integration of financial products, strict adherence to governance, and a carefully crafted product that’s honed for independent software vendors (ISV) and their business owner customers. We’ve built this success by assembling a cross-disciplinary group of experts who are all committed to making an extremely simple and easy-to-use solution.

How have you leveraged AI in helping software providers grow revenue 2-5X through embedded finance?

It’s not enough to simply offer embedded financial products; to succeed, those products must match the unique needs of our Independent Software Vendor (ISV), Enterprise Resource Planning software provider (ERP), or other SaaS providers and their customers. AI provides the tantalizing opportunity to analyze vast amounts of data nearly in real-time and make relevant recommendations. I expect embedded finance can harness this power in two ways.

First, AI may be able to provide contextual offers based on the individual behavior of merchants and businesses. We’ve all experienced irrelevant advertising – spam that wastes your time and attention and the promotion budget of the sponsor. We think AI soon will be able to evaluate the cash flows of businesses and recommend a loan to bridge a predicted cash shortfall or a larger capital investment.

We’re also very excited about the potential for AI to quickly identify and adapt to potential fraud. Protecting our partners and their customers is an immense priority for us, and we see AI as a critical ally in that effort.

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Embedded finance is undeniably the future of financial services. We would love to hear your comments on this.

An entrepreneur’s closest business expert used to work at her local bank. The local banker touched businesses tied together by geography and culture. Today, businesses rely on their SaaS providers as the experts who understand the needs of businesses in their industry.

Today’s software providers better understand their customer’s needs better. They’re moving away from app marketplaces because the SaaS providers learned many customers don’t have the expertise to select or integrate applications.

Businesses and consumers want a frictionless and efficient experience. Embedded finance makes this possible. It meets customers’ needs by providing a seamless customer journey.

By embedding payments and banking services, including l****, credit cards, and other services in SaaS offerings, we’re simplifying a business’ entire financial workflow. Best of all, we’re handling all the heavy lifting to make it happen.

How does Maast manage underwriting, compliance, security, and support so software providers can get to market faster and offer business owners a better experience?

When Maast works with an ISV, it’s our job—not the software provider’s — to ensure the experience works. We have the human and technological resources to manage all the regulatory compliance and back-office integration, saving the ISV a significant amount of time and money while reducing complexity.

Of course, with embedded finance applications, security is paramount. Our cybersecurity systems exceed all industry standards.

Even though the world has largely gone digital, much of banking remains in a world of paper. When can we see a paradigm shift?

We’re starting to see the shift already. The Federal Reserve Bank of Philadelphia predicts that paper checks will be obsolete in three years¹. I was recently at a hotel in San Diego and wanted to get some cash to pay the valet. The front desk said that they don’t accept cash at all.

McKinsey estimates that nine in ten Americans are now using some form of digital payments². The shift to digital payments continues to accelerate, and traditional banks are racing to keep up. Maast developed a comprehensive, secure business digital banking suite. Customers enjoy a full-service business checking experience with the branding of their trusted software provider and the strength and security of Synovus Bank, member FDIC.

Payments and banking are better when they are together. Could you explain this with a few examples? 

Let’s look at a specific vertical. An independent music store does instrument rentals, repairs, lesson scheduling, and sales. We’ve partnered with ClerkHound, a single integrated software suite for music store owners. ClerkHound’s developers understand this business exceptionally well. They don’t understand financial services. With embedded finance services from Maast, ClerkHound’s users get a complete business experience within a single platform.

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Maast powers ClerkHound’s recurring b****** for rentals and lessons, with automatic reminder emails sent to delinquent accounts. When customers pay digitally, the retailer can easily sweep funds into a ClerkHound checking account powered by Maast and maintained by Synovus. And, a ClerkHound business debit card enables retailers to easily purchase goods and services necessary to keep the business humming.

You’d be surprised how many small- and medium-sized businesses are run from the founder’s personal checking account. The ClerkHound model can be applied to software for tons of industries. At the same time, ClerkHound enjoys a revenue share from the transactions that pass through their platform and from the average daily value of the deposits on the accounts they helped create.

Could you please give your suggestions regarding how to build a successful career in fintech?

With so much investment and innovation, the fintech industry has grown substantially over the past decade, opening the door to many new career opportunities, especially in embedded finance.

I suggest three things for those looking to build a career in fintech.

Learn technology. Technical chops are essential to create, market, sell, and service fintech solutions like embedded finance.

Look for opportunities to create new use cases. For example, track how businesses are accepting payments and utilizing capital on all levels, look at the pain points in the current framework, and examine financial trends that can suggest new solutions that can solve problems and reduce friction in SMBs’ operations.

Be willing to challenge the status quo. Always think beyond the norm; there are always new, innovative ways to create financial value.

We’d love to know your predictions for the future of AI and FinTech.  

These are some of the fintech trends that are shaping Maast’s approach to embedded finance.

Payment clearance time will shrink.

Payments and settlements are approaching real-time clearance and will soon be virtually frictionless.

Embedded finance will continue to evolve.

As software companies begin to integrate financial services, other embedded features will gain traction, including accounting and short-term l****, as a seamless, contextual experience.

The gap between B2B and B2C embedded finance offerings will shrink.

Today, everyone expects B2C embedded finance options, like payment acceptance. But, some B2B verticals, such as accounting and other professional services, are ripe for growth.

The “one-stop shop” or B2B super app will become more prevalent.

From China’s WeChat to lifestyle ecosystems like Apple Pay and Google Pay, businesses and consumers want savvy software providers to dramatically reduce the steps needed to speed up money movement and simplify routine processes by offering multiple features in one app. We’ll soon see a foray into B2B super apps as well.

Please suggest one powerful Fintech-focused book to our readers.

For me, every book is a business book, and every business book is a fintech book. Skunk Works by Ben R. Rich and Leo Janos has stuck with me across the decades. It’s about Lockheed Martin – a company that’s lived on the cutting edge of technology for six decades. They developed an independent group of engineers and scientists, called Skunk Works, who have developed cutting-edge technologies like the SR-71 Blackbird and the original stealth fighter. Rich’s story of negotiating corporate needs and futuristic innovation resonates with me.

Banking services provided by Synovus Bank, member FDIC.

1. The 2019 Federal Reserve Payments Study. The Federal Reserve Board, 2019. Retrieved 9/12/23 from https://www.federalreserve.gov/newsevents/pressreleases/files/2019-payments-study-20191219.pdf.

2. Anan, Lindsay et al. “Consumer Trends in Digital Payments.” McKinsey and Company. 10/21/22. Retrieved 9/12/23 from https://www.mckinsey.com/industries/financial-services/our-insights/banking-matters/consumer-trends-in-digital-payments.

Thank you, Tom! That was fun and we hope to see you back on AiThority.com soon.

[To share your insights with us, please write to sghosh@martechseries.com]