Months of sky-high inflation, weak economic growth, and rate hikes have taken their toll on consumers and businesses alike. Fintechs, in particular, are feeling the pinch as growth slows. But there's one bright spot on the horizon: embedded finance (EmFi). What is EmFi? It's when financial services are integrated into other products and platforms, making them more accessible and convenient for users. While traditional fintechs are struggling, companies that offer fintech-as-a-service are thriving. And EmFi is the solution for businesses that want to offer financial services to their customers without all the hassle and expense of building a full-fledged fintech platform. EmFi recently made headlines when Solid, a startup that provides fintech-as-a-service solutions, Series B funding - not an easy feat in a downturn. million in raised $63 To better understand EmFi, and the value it can provide, let's look at some of the as-a-service solutions that make up this category. Banking as a Service Businesses that want to offer banking services, such as business and consumer checking accounts, can do so without having to obtain a banking license or build the complex financial infrastructure required to support those services. Instead, they can partner with a company that offers Banking-as-a-Service (BaaS). BaaS providers have the licenses, compliance expertise, and operations infrastructure needed to support a wide range of financial products and services. And they make it all available to businesses through APIs, so it can be easily integrated into their existing products and platforms. Payments as a Service Forget Platform-as-a-Service (PaaS). The new hotness in fintech is Payments-as-a-Service (PaaS). PaaS providers offer a complete payment solution that businesses can plug into their existing systems. This could include the ability to process ACH, Wire, Check and on-us transactions. What's more, PaaS providers may also handle fraud detection and prevention, all while providing real-time visibility into the status of transactions. This is a vital service for businesses that want to offer their customers the convenience of making payments directly from their product or platform. Card Issuance as a Service When checking out on Amazon.com, have you ever noticed that you can pay with an Amazon-branded card? Other businesses, like Delta, Starbucks, and ExxonMobil, have their own branded cards as well. Card issuance has traditionally been the domain of banks and credit card issuers. But with Card-Issuance-as-a-Service (CIaaS), businesses of all sizes can easily offer branded debit and prepaid cards to their customers. CIaaS providers handle all the back-end work, from card design and printing to program management and customer service. This frees businesses to focus on what they do best: selling their products and services. Crypto as a Service Crypto startups are suffering. With $3 trillion wiped off the value of cryptocurrencies this year, it's difficult for these businesses to afford to build the infrastructure needed to support their products and services. Fortunately, there's a solution: Crypto-as-a-Service (CaaS). CaaS providers offer the infrastructure, compliance, and security necessary for businesses to launch and operate cryptocurrency products and services. This includes everything from custody and liquidity to transfers and even crypto cards. And because CaaS providers handle all the heavy lifting, businesses can focus on what they do best: innovating and building great products. The Growth of the as-a-Service Model SaaS, or software-as-a-service, was one of the first as-a-service models to gain traction. And today, it's a . $240 billion industry Some of the earliest adopters of the as-a-service model were companies like Salesforce and Workday. These companies saw an opportunity to provide businesses with on-demand access to enterprise software, without the need for complex on-premises infrastructure. The success of SaaS paved the way for the as-a-service model to be applied to other industries, including fintech. Several trends have converged to make this possible, including the rise of APIs, the growth of cloud computing, and the proliferation of mobile devices. As a result, we're seeing an explosion of as-a-service offerings in fintech, from BaaS and PaaS to CaaS. This trend is only going to accelerate in the years to come, as more businesses recognize the benefits of the as-a-service model. The Future of Fintech The Gartner hype cycle for fintech is peaking. But while the hype may die down, the underlying trends that are driving it – such as the shift to digital channels and the need for faster, more convenient financial services – are here to stay. Businesses won't suddenly stop demanding innovative financial solutions. They'll just be more selective about who they partner with to provide those solutions. Executives are facing tough decisions about where to allocate their limited resources. And that's where embedded finance comes in. By offering a wide range of financial services through APIs, embedded finance providers can help businesses of all sizes offer convenient, user-friendly financial products and services to their customers – without all the hassle and expense.

This story contains new, firsthand information uncovered by the writer.

Embedded Finance is a Liferaft in the Recession

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