The rise of embedded finance is a direct response to what consumers have been demanding for years: simplicity and speed. With the arrival of the iPhone and the explosion of internet service came a new standard — the ability to access and pay for almost anything from a single device.
Embedded finance is the natural evolution of that shift, which meets users exactly where they are and turns everyday platforms into financial ecosystems. It has already evolved from just a niche innovation to a fundamental pillar in the digital economy — especially for startups. It’s now not only about payments or banking integrations, but reimagining entire business models and creating new revenue streams that didn’t exist before.
However, for traditional banks, it’s difficult to keep up with this trend. Why? What are consumers truly expecting?
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What’s driving adoption?
Arthur Azizov of B2 Ventures
At the heart of embedded finance’s explosive growth is one simple factor: convenience. If you think back to the pre-digital era, paying bills meant standing in lines, dealing with paperwork and visiting physical branches. It was slow and frustrating. The digital revolution changed all that. Now, consumers want to pay, borrow, invest and insure directly within the apps they already use. You tap a screen and it’s done — that’s the benchmark.
The numbers speak volumes. According to Bain & Co. and Bain Capital, revenue from embedded finance platforms and infrastructure providers is expected to grow from $21 billion in 2021 to $51 billion in 2026. Transaction volume? Forecast to hit $7 trillion, representing 10% of all U.S. financial transactions.
Another major driver is the technological leap. Ten years ago, integrating with banks required massive IT teams and multimonth roadmaps. Today, startups can plug into financial services via Open APIs in days as there are platforms such as Stripe and Revolut. These tools dramatically lower both the cost and complexity of integrating financial features.
But perhaps the biggest motivation? Revenue. For nonfinancial companies, embedded finance is more than just a value-added feature — it’s also a key monetization mechanism. Platforms can now earn a percentage of every transaction while boosting customer stickiness. Take Shopify: nearly half its revenue comes not from subscriptions but from financial services like payments and loans. It’s a win-win that startups are eager to tap into.
Are traditional banks keeping up?
Here’s where the picture becomes more complicated. Most traditional banks still operate on legacy systems from the 1980s. Migrating to modern, API-friendly infrastructure is not only extremely costly but also operationally painful. Just imagine that you have 30,000 employees, or even 10,000, and you need to migrate everything to a new platform. Also, your entire database infrastructure is legacy, your processes are legacy — it’s difficult to digitalize all these.
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To compete, some, let’s say, “Tier 1” banks are pouring billions into implementing Open API. But many “Tier 2” and long-established banks are simply falling behind. Leadership is often aging, regulatory requirements are rigid, and cybersecurity standards (as there are many to adhere to) make innovation harder. Many still require in-person visits for simple tasks or run core services on outdated systems like voice trading. This leaves them struggling to keep pace with fintech players that offer a smoother and smarter experience by design.
Changing customer expectations
It’s no longer enough to offer a checking account or a credit card. Users now need “super apps” — platforms that combine multiple financial (and nonfinancial) services in one seamless interface. With modern digital banks you can clearly see where your money is, how much you’ve earned or lost, and the exact exchange rates applied. Then you log into a traditional bank (this is a real-world example) and they tell you, “We’ll get back to you with the FX rate for converting dollars to euros.” You wait for an email, and it feels like you’ve stepped into a time machine.
Banks don’t necessarily have to build everything themselves; partnerships are a viable path. But the key is ensuring that the entire experience happens within a single application. So, those who will manage to create a marketplace inside their application or on the website will go ahead, the rest will not, losing both market share and revenue.
Arthur Azizov is founder and investor at B2 Ventures, a private fintech alliance encompassing a portfolio of financial and technology projects, including B2Broker and B2BinPay. A serial entrepreneur with over a decade of experience, he has been at the forefront of financial technology innovation, transforming liquidity, trading and payment services.
Illustration: Dom Guzman
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Cornell University administrator Warren Petrofsky will serve as the Faculty of Arts and Sciences’ new dean of administration and finance, charged with spearheading efforts to shore up the school’s finances as it faces a hefty budget deficit.
Petrofsky’s appointment, announced in a Friday email from FAS Dean Hopi E. Hoekstra to FAS affiliates, will begin April 20 — nearly a year after former FAS dean of administration and finance Scott A. Jordan stepped down. Petrofsky will replace interim dean Mary Ann Bradley, who helped shape the early stages of FAS cost-cutting initiatives.
Petrofsky currently serves as associate dean of administration at Cornell University’s College of Arts and Sciences.
As dean, he oversaw a budget cut of nearly $11 million to the institution’s College of Arts and Sciences after the federal government slashed at least $250 million in stop-work orders and frozen grants, according to the Cornell Daily Sun.
He also serves on a work group established in November 2025 to streamline the school’s administrative systems.
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Earlier, at the University of Pennsylvania, Petrofsky managed capital initiatives and organizational redesigns in a number of administrative roles.
Petrofsky is poised to lead similar efforts at the FAS, which relaunched its Resources Committee in spring 2025 and created a committee to consolidate staff positions amid massive federal funding cuts.
As part of its planning process, the committee has quietly brought on external help. Over several months, consultants from McKinsey & Company have been interviewing dozens of administrators and staff across the FAS.
Petrofsky will also likely have a hand in other cost-cutting measures across the FAS, which is facing a $365 million budget deficit. The school has already announced it will keep spending flat for the 2026 fiscal year, and it has dramatically reduced Ph.D. admissions.
In her email, Hoekstra praised Petrofsky’s performance across his career.
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“Warren has emphasized transparency, clarity in communication, and investment in staff development,” she wrote. “He approaches change with steadiness and purpose, and with deep respect for the mission that unites our faculty, researchers, staff, and students. I am confident that he will be a strong partner to me and to our community.”
—Staff writer Amann S. Mahajan can be reached at [email protected] and on Signal at amannsm.38. Follow her on X @amannmahajan.
My spreadsheet reviewed a WalletHub ranking of financial distress for the residents of 100 U.S. cities, including 17 in California. The analysis compared local credit scores, late bill payments, bankruptcy filings and online searches for debt or loans to quantify where individuals had the largest money challenges.
When California cities were divided into three geographic regions – Southern California, the Bay Area, and anything inland – the most challenges were often found far from the coast.
The average national ranking of the six inland cities was 39th worst for distress, the most troubled grade among the state’s slices.
Bakersfield received the inland region’s worst score, ranking No. 24 highest nationally for financial distress. That was followed by Sacramento (30th), San Bernardino (39th), Stockton (43rd), Fresno (45th), and Riverside (52nd).
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Southern California’s seven cities overall fared better, with an average national ranking of 56th largest financial problems.
However, Los Angeles had the state’s ugliest grade, ranking fifth-worst nationally for monetary distress. Then came San Diego at 22nd-worst, then Long Beach (48th), Irvine (70th), Anaheim (71st), Santa Ana (85th), and Chula Vista (89th).
Monetary challenges were limited in the Bay Area. Its four cities average rank was 69th worst nationally.
San Jose had the region’s most distressed finances, with a No. 50 worst ranking. That was followed by Oakland (69th), San Francisco (72nd), and Fremont (83rd).
The results remind us that inland California’s affordability – it’s home to the state’s cheapest housing, for example – doesn’t fully compensate for wages that typically decline the farther one works from the Pacific Ocean.
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A peek inside the scorecard’s grades shows where trouble exists within California.
Credit scores were the lowest inland, with little difference elsewhere. Late payments were also more common inland. Tardy bills were most difficult to find in Northern California.
Bankruptcy problems also were bubbling inland, but grew the slowest in Southern California. And worrisome online searches were more frequent inland, while varying only slightly closer to the Pacific.
Note: Across the state’s 17 cities in the study, the No. 53 average rank is a middle-of-the-pack grade on the 100-city national scale for monetary woes.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
The up-and-coming fintech scored a pair of fourth-quarter beats.
Diversified fintech Chime Financial(CHYM +12.88%) was playing a satisfying tune to investors on Thursday. The company’s stock flew almost 14% higher that trading session, thanks mostly to a fourth quarter that featured notably higher-than-expected revenue guidance.
Sweet music
Chime published its fourth-quarter and full-year 2025 results just after market close on Wednesday. For the former period, the company’s revenue was $596 million, bettering the same quarter of 2024 by 25%. The company’s strongest revenue stream, payments, rose 17% to $396 million. Its take from platform-related activity rose more precipitously, advancing 47% to $200 million.
Image source: Getty Images.
Meanwhile, Chime’s net loss under generally accepted accounting principles (GAAP) more than doubled. It was $45 million, or $0.12 per share, compared with a fourth-quarter 2024 deficit of $19.6 million.
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On average, analysts tracking the stock were modeling revenue below $578 million and a deeper bottom-line loss of $0.20 per share.
In its earnings release, Chime pointed to the take-up of its Chime Card as a particular catalyst for growth. Regarding the product, the company said, “Among new member cohorts, over half are adopting Chime Card, and those members are putting over 70% of their Chime spend on the product, which earns materially higher take rates compared to debit.”
Today’s Change
(12.88%) $2.72
Current Price
$23.83
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Key Data Points
Market Cap
$7.9B
Day’s Range
$22.30 – $24.63
52wk Range
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$16.17 – $44.94
Volume
562K
Avg Vol
3.3M
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Gross Margin
86.34%
Double-digit growth expected
Chime management proffered revenue and non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance for full-year 2026. The company expects to post a top line of $627 million to $637 million, which would represent at least 21% growth over the 2024 result. Adjusted EBITDA should be $380 million to $400 million. No net income forecasts were provided in the earnings release.
It isn’t easy to find a niche in the financial industry, which is crowded with companies offering every imaginable type of service to clients. Yet Chime seems to be achieving that, as the Chime Card is clearly a hit among the company’s target demographic of clientele underserved by mainstream banks. This growth stock is definitely worth considering as a buy.
