Finance
The Hidden Risks Of BaaS And Embedded Finance: Inside Apple’s Struggle
Customer support plays a critical role in succesful fintech partnerships.
The honeymoon between Apple and Goldman Sachs may be over. Recent complaints from Apple Savings customers about their inability to quickly withdraw funds and encountering “rude” customer support staff from Goldman Sachs have awakened the trillion-dollar company to some of the challenges of partnering with a BaaS or Embedded Finance (EF) enablers. For a company like Apple, known for its impeccable customer support, the impact of these complaints could pose a risk to the exceptional customer experience Apple provides its users.
BaaS and EF continue to revolutionize and democratize financial services, and many are taking note. The global embedded finance market valued at USD 65.46 billion in 2022 is expected to grow at a compound annual growth rate (CAGR) of 32.2% from 2023 to 2030. From the surface the benefits are clear; reduced costs, quicker time to launch, out of the box tech, with regulatory and compliance requirements met.
Having worked on both the supply and demand side of BaaS and Embedded Finance, challenges will always arise once the product is live, such as managing edge cases and restrictions on product development, as brands are tied to the BaaS or EF enablers product roadmap.
The Wild Card: Customer Support
Perhaps the most underrated challenge is handling customer support. Founders, CPOs, and CTOs primarily focus on the product and how to achieve product-market fit. They often overlook or do not prioritize the customer support function, which is critical for maintaining customer loyalty and a solid customer experience. BaaS and EF enablers are B2B companies, and their customers are not end-users. Therefore, BaaS and EF enablers tend to have customer success managers or partnership managers rather than a strong customer support team to help query end users problems.
What customers of Apple Savings experienced is not out of the ordinary. Customers who interact with the customer support team of the BaaS or EF enabler often experience waiting periods of days, sometimes weeks. Even when a fintech or brand has an in-house customer support team, sometimes the request is redirected to the BaaS or EF enabler, again leading to long response time and frustrated customers in what can feel like a disjointed experience.
Knowing The Flow of Funds and Compliance Requirements
Another challenge that fintechs and brands cannot escape is the often complex flow of funds model and regulator complexity faced by their BaaS or EF enabler. This is particularly true for multi-currency or multi-market fintechs that use multiple BaaS providers. A recent story involving a business owner chasing the fintech they used for their business account for two months. Funds meant to be returned to the user account, a German IBAN, were instead sent back to the custodial bank, an Estonian bank. It took two months to resolve the issue, without any clarification of what was wrong.
Often, customer support at the fintech and brand are not up to speed with the intricate workings of the BaaS or EF enablers’ partners and regulatory set-up. In Apple’s case, one customer complained about an “absolutely ridiculous experience where Apple Savings wouldn’t let me withdraw to one of the bank accounts on file as it wasn’t the account the funds originally came from.”
Goldman Sachs’ Nick Carcaterra commented on the recent complaints, stating, “The new Savings account for Apple Card users has received excellent customer response, exceeding our expectations. While the vast majority of customers experience no delays in transferring their funds, in a limited number of cases, a user may experience a delayed transfer due to processes in place designed to help protect their accounts. While we would not comment on specific customer interactions, we take our obligation to protect our customers’ deposits very seriously and work to create a balance between a seamless customer experience and that protection.”
The customer’s frustration could have mitigated by providing assurance around the funds, details of why the withdrawal was not approved, and why this is an important safeguard by Goldman Sachs to keep customers fund safe. The Apple user sees this as a massive inconvenience, but in the end, it is done for the customer’s benefit.
How to Create a Win-Win
Working with a BaaS or EF enabler has pros and cons. For any brand or fintech on the path to such a partnership, a customer support strategy should be an absolute priority, and the following points can be considered when building a strategy:
- Always opt to staff your own customer support over the BaaS or EF enabler. This allows you to own your tone of voice and ensuring you have a complete handle on the situation. In Apple’s case, the user felt that the Goldman Sachs customer support agent was “lecturing” him, posing a considerable risk to maintaining Apple’s overall customer experience.
- Provide the right amount of information when it comes to the flow of funds queries. The perception of “lost money” among customers is highly triggering and concerning. Transparency and ensuring customers that their funds are not lost will be critical to retaining customers who go through this experience. Re-assure them that measures are taken to protect their funds.
- Equip your product and customer support teams with the basics of banking. Explain how inflows and outflows of funds work, what parties are involved, and when a potential delay could occur. While this may seem obvious, there often needs to be more knowledge between the product owner at a brand, and the compliance or tech teams of a BaaS or EF enabler.
While BaaS and EF hold immense potential, recent issues between Apple and Goldman Sachs underscore the importance of prioritizing customer support and understanding the complexities of fund flows in such partnerships. By addressing these challenges head-on, brands and fintechs can navigate the embedded finance landscape while delivering exceptional customer experiences.
Senior members of Canada’s cabinet held talks Friday with US President-elect Donald Trump’s nominees to lead the departments of commerce and the interior, as Ottawa works to hold off the threat of punishing tariffs.
Canada’s newly-appointed Finance Minister Dominic Leblanc and Foreign Minister Melanie Joly met with Howard Lutnick, Trump’s commerce secretary nominee, who will also lead the country’s tariff and trade agenda.
Interior secretary nominee Doug Burgum was also at the meeting held at Trump’s Mar-a-Lago estate in Florida.
Leblanc’s spokesman Jean-Sebastien Comeau, who confirmed the participants, described the talks as “positive and productive.”
Trump has vowed to impose crippling 25-percent tariffs on all Canadian imports when he takes office next month.
He has said they will remain in place until Canada addresses the flow of undocumented migrants and the drug fentanyl into the United States.
Canadian Prime Minister Justin Trudeau has promised retaliatory measures should Trump follow through on his pledge, raising fears of a trade war.
Leblanc and Joly “outlined the measures in Canada’s Border Plan and reiterated the shared commitment to strengthen border security as well as combat the harm caused by fentanyl to save Canadian and American lives,” Comeau said in a statement.
Canada’s Border Plan — estimated to cost CAN$1 billion ($694 million) — was crafted as part of Ottawa’s response to Trump’s concerns.
Lutnick and Burgum “agreed to relay information to President Trump,” the statement said.
Trudeau is facing his worst political crisis since sweeping into office in 2015.
Leblanc was named finance minister earlier this month after the surprise resignation of Chrystia Freeland.
In a scathing resignation letter, Freeland accused Trudeau of prioritizing handouts to voters instead of preparing Canada’s finances for a possible trade war.
More than 75 percent of Canadian exports go to the United States and nearly two million Canadian jobs depend on trade.
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The future of finance, especially global finance, is not on the horizon — it’s happening now. Countries and Institutions that embrace interoperability, real-time compliance, and quantum-resilient security are positioning themselves as leaders of this transformation.
The financial system is in the midst of a monumental shift. Central Bank Digital Currencies (CBDCs) are gaining momentum as governments and regulators aim to modernize monetary systems, while Decentralized Finance (DeFi) continues to challenge conventional financial services with speed, transparency, and decentralization. However, despite their potential, these two forces — along with traditional financial systems — remain disjointed. This fragmentation results in inefficiencies, rising costs, and settlement delays, hindering global financial connectivity. Bridging these worlds is no longer optional — it’s essential to create a faster, more secure, and more inclusive financial future.
The Problems Holding Finance Back
For decades, the global financial system has relied on legacy infrastructure and fragmented regulatory and banking industry frameworks. While it has supported cross-border payments and international trade, it has done so at an exorbitant cost in terms of both time and money. The involvement of global politics has added an additional level as well to an already complex system. The emergence of blockchain-based DeFi platforms introduced new possibilities but failed to solve the underlying issues of scalability and compliance. Meanwhile, CBDCs add a new layer of complexity as central banks look to maintain control while modernizing payments.
The key obstacles are clear:
- Slow and Expensive Payments: Cross-border payments processed through SWIFT are slow and require multiple intermediaries, each adding fees, delays, and points of failure. The type of transfers are limited.
- Disjointed Regulatory Compliance: Payments crossing borders must comply with a patchwork of jurisdictional regulations, including Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements. Current processes are slow, manual, and costly.
- Lack of Interoperability: DeFi platforms, CBDCs, and traditional banking systems all operate on isolated infrastructures, making it difficult to move money between them efficiently.
- Scalability Issues: DeFi platforms face network congestion during high-volume periods, resulting in slower transaction speeds and higher fees — far from ideal for large-scale financial operations.
These challenges are not theoretical. They’re real-world problems faced by financial institutions, payment providers, and central banks trying to create more efficient, resilient systems.
See also: Transforming the Financial Sector: The Impact of Automation in Banking
Interoperability: The Bedrock of the Next Financial System
True interoperability is not a feature — it’s a requirement. For traditional finance, DeFi, and CBDCs to coexist, they must be able to communicate and transfer value across one another. Without this capability, cross-border payments will remain slow, and multi-system operations will continue to require expensive manual reconciliation. Interoperability enables payments to flow seamlessly between bank networks, DeFi protocols, and CBDC platforms, cutting out intermediaries and automating settlement.
What true interoperability requires:
- Multi-Ledger Transaction Support: Payments must move across different financial ledgers — from commercial banks to DeFi protocols to central bank digital currency networks — without reconciliation bottlenecks.
- Real-Time, Multi-Currency Settlement: Payments involving fiat, cryptocurrencies, and CBDCs must be processed and settled in real time, enabling frictionless commerce at scale.
- The governance, regulatory, privacy, and Nation-State requirements need to be automated in the new Platform.
- Universal Payment Flows: Payment solutions must enable a single payment to cross multiple networks — legacy, private, blockchain, and government-issued systems — without requiring separate processing channels.
The results are undeniable: greater efficiency, lower settlement costs, and a path to instant cross-border payments. This shift eliminates the need for batch processing and multi-step settlement chains, replacing them with real-time payment routing and automated multi-ledger transfers.
Compliance Can’t Be Bolted On – It Must Be Embedded
Cross-border payments are subject to varying regulatory requirements, which are enforced by regional authorities. Ensuring compliance with KYC, AML, and sanctions screening has traditionally been a manual, labor-intensive process, leading to costly delays. But the future of compliance is no longer manual — it’s embedded. By embedding compliance checks directly into payment flows, financial institutions can meet regulatory requirements in real time, reducing risk, eliminating delays, and supporting faster payments.
Key elements of embedded compliance:
- On-Demand KYC/AML Screening: Compliance screening occurs automatically, with KYC/AML checks happening as the payment is processed, not after.
- Dynamic Rule Adjustment: When payments cross borders, the system recognizes which jurisdictions are involved and applies the proper compliance rules in real time.
- Automated Risk Scoring: Transactions are evaluated for risk on the fly, with high-risk payments flagged for review while low-risk payments flow uninterrupted.
- Immutable Audit Trails: Every payment is accompanied by an immutable, tamper-proof record that supports regulatory audits and provides transparency.
By automating and embedding compliance into the payment process itself, financial institutions lower operational costs, reduce exposure to regulatory risk, and accelerate payment settlement. This approach moves compliance from being a roadblock to being an enabler.
Securing Payments for the Quantum Era
As quantum computing advances, the cryptographic protections that underpin today’s financial system are at risk. Many existing encryption methods, like RSA and ECC, could be cracked by a quantum computer. While quantum computing may seem distant, its implications for financial security are real. The financial sector must act now to prepare for a post-quantum world.
Key security measures to counter quantum threats:
- Quantum-Resistant Cryptographic Protocols: These protocols are immune to attacks from quantum computers, ensuring that even future advancements won’t compromise financial data.
- Post-Quantum Key Exchange: Secure key exchange protocols ensure encryption keys remain secure during transmission, even if intercepted.
- Zero-Day Threat Detection: AI models track network activity, flagging and neutralizing unknown threats before they can do harm.
- New file systems that rely on a multi-layered approach that separates the data in a way to enhance security, speed, and scalability.
The transition to quantum-resistant encryption isn’t speculative. Financial leaders know that, when quantum computing matures, it will disrupt financial security as we know it. Early adoption of quantum-safe protocols future-proofs payment infrastructure, ensuring financial stability in a rapidly evolving threat landscape.
Distributed Edge Processing: Faster Payments with Local Control
For decades, payment processing has relied on centralized data centers that route transactions through a central hub. While effective, this model introduces latency, network congestion, and single points of failure. The future of payment processing is at the edge.
Edge processing pushes payment activity to the “edge” of the network — closer to where the payment originates — reducing travel time and allowing payments to be processed locally. Instead of relying on a central server, mini-processing nodes handle payments on-site, enabling near-instant settlements.
How edge processing changes the game:
- Real-Time Settlement: Payments are processed on-site, at the source, rather than waiting for clearance from a central location.
- Resilient Infrastructure: Multiple nodes create redundancy, so if one node goes offline, the others maintain operational uptime.
- Reduced Latency: Local processing eliminates the round-trip delay that occurs when payments are routed to and from a central server.
This shift in processing models enables faster cross-border payments and lays the groundwork for true real-time settlement. Localized processing nodes create resilience, reduce downtime, and remove bottlenecks in global payment flows.
Sustainability and Financial Inclusion as Critical Imperatives
ESG (Environmental, Social, and Governance) factors are playing a larger role in financial infrastructure design. From environmental sustainability to financial inclusion, future-ready payment infrastructure must meet new societal expectations. This shift is not just ethical; it’s strategic. Institutions are under pressure from regulators, investors, and customers to create more equitable, transparent, and sustainable financial systems.
ESG-driven imperatives shaping financial infrastructure:
- Environmental Impact: Centralized data centers consume enormous amounts of energy. By adopting distributed processing, institutions reduce energy use and carbon emissions.
- Financial Inclusion: Millions of people remain unbanked. Financial inclusion solutions enable low-cost cross-border payments, giving underserved communities access to global finance.
- Transparency and Accountability: Blockchain-based payment records create immutable, tamper-proof audit trails, ensuring visibility into every transaction.
The Call to Lead the Financial Future
The future of finance, especially global finance, is not on the horizon — it’s happening now. Countries and Institutions that embrace interoperability, real-time compliance, and quantum-resilient security are positioning themselves as leaders of this transformation. Delays are no longer an option. The financial world will reward those who act with speed, precision, and foresight. The question is not if change will come — it’s whether you’ll be ready to lead it.
Finance
Your money habits trace back to childhood, financial psychotherapist says. Here's how to fix them
Child saving money in a glass jar at home
Pinstock | E+ | Getty Images
Your relationship with money might seem random, but one expert says it offers clues about your childhood — and understanding this could help overcome toxic spending habits.
Vicky Reynal, a financial psychotherapist and author of “Money on Your Mind,” told CNBC Make It that there are psychological reasons behind our spending habits, and many of these attitudes stem from childhood experiences.
“Our emotional experiences growing up will shape who we become,” she said.
For example, someone who felt secure during childhood might feel that they deserve good things, and later in life may be more likely to negotiate a higher salary or enjoy the money they have, Reynal said. Whereas someone who experienced childhood neglect may grow up with low self-esteem and act this out through money behaviors.
This could include feeling guilty when spending money because they don’t feel they deserve good things, or splashing the cash to impress because they feel unworthy of attention.
“The little toddler that goes up to their parents to show them their scribble — how they get responded to will give them a message about how the world will respond to them,” Reynal added.
Scarcity or wealth
Reynal said “the money lessons we learn growing up” are largely shaped by whether we grew up in an environment of scarcity or wealth.
“To give you an example, growing up in scarcity, people that manage to move themselves out of that economic reality, and maybe in their own adult life manage to accumulate quite a bit of wealth, it’s quite common for them to struggle with what they call the scarcity mindset,” Reynal said.
This is a pattern of thinking that fixates on the idea that you don’t have enough of something, like money. A scarcity mindset means someone might struggle to enjoy the money they’ve earned and be anxious about spending it, Reynal added.
Alternatively, there are people who grew up with little but became wealthy, and are now very careless with money.
“They’re giving themselves everything that they longed for when they were little so they might go on the other extreme and start spending it quite carelessly, because now they want to give their children everything that their parents couldn’t give them,” Reynal added.
Stop self-sabotaging
The key to overcoming toxic spending habits is to stop self-sabotaging — a common behavior — according to Reynal.
“Often behind a pattern of financial self-sabotage, there are deep-seated emotional reasons, and it could range from feelings of anger, feelings of un-deservedness, to maybe a fear of independence and autonomy,” she said.
To identify these, you first have to determine what your financial habits and inconsistencies are, Reynal said, giving an example of someone who might overspend in the evenings.
“Is it boredom? Is it loneliness? What is the feeling that you might be trying to address with the overspending?” she said.
“That’s already giving you a clue as to what you could be doing different. So, if it’s boredom, what can you replace this terrible financial habit with?”
Reynal said she had a young client who would always run out of money within the first two weeks of the month. She asked them: “What would happen if you were financially responsible?”
The client revealed that they feared risking their relationship with their mother because every time they ran out of money, they called their mother to ask for more.
“Their parents had divorced a long time ago, and the only time they ever spoke to their mother was to ask for money,” Reynal said. “They had a vested interest in being bad with money, because if they were to become good with money, then they had the problem of: ‘I might not have an excuse to call mother anymore and I don’t know how to build that relationship again’.”
The financial psychotherapist recommended being “curious and nonjudgmental” when considering the root of bad spending behavior.
“So sometimes asking ourselves: “What feelings would I be left with if I actually didn’t self-sabotage financially, or if I weren’t so generous with my friends?’ That can start to reveal the reason why you might be doing it,” she added.
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