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Embedded finance, i.e. to ability to offer banking services as a seamless part of a customer journey, is a trend that is here stay. After exploring this topic with Christoffer Malmer from SEB Embedded as well as Dee Mitra from Deutsche Bank, we invited Dieuwertje de Rover to our podcast to hear how one of the leading Dutch banks is approaching this new business opportunity. Dieuwertje is the area lead for banking-as-a-service (BaaS) at Rabobank, a cooperative bank, based in the Netherlands where it serves around 9.1 million retail and corporate customers

Exploring the frontiers of embedded finance with Dieuwertje de Rover of Rabobank

This episode provides an in-depth look at how Rabobank is steering the future of banking by integrating financial services into broader consumer and business platforms. Dieuwertje began her tenure at Rabobank as a digital strategy consultant, where her initial project involved developing a vision for banking-as-a-service (BaaS).

Over the past five years, she has spearheaded the transformation of this vision into a strategic operational component of Rabobank, highlighting her journey from strategy formulation to leading a critical area within the bank.

Banking as a service vs. embedded finance

Dieuwertje explains the distinction between general banking-as-a-service (BaaS) and Rabobank’s approach to embedded finance. While BaaS often entails providing banking infrastructure to other companies on a white-label basis, Rabobank focuses on embedding its financial services into the ecosystems where their customers are active, ensuring the bank’s brand is part of the customer experience. This approach not only leverages Rabobank’s strong brand equity but also aligns with their strategic goal to meet customers on their preferred platforms.

Regulatory impact and market evolution

Our conversation also covers the significant role of regulation in shaping the future of banking services. Dieuwertje discusses the impact of the Payment Services Directive 2 (PSD2), a European regulation designed to increase competition and participation in the payments industry, including from non-banks. This directive mandates banks to open their payment services to third-party providers on behalf of their customers. She anticipates the introduction of PSD3, expected to further enhance these provisions and possibly introduce new ones aimed at tightening security and extending the scope of regulated services. Another upcoming regulation, the Financial Data Act (FIDA), aims to promote greater access to financial data, enhancing transparency and enabling consumers to benefit more fully from their financial data. These regulations encourage innovation and competition, pushing Rabobank and other banks to adapt and innovate in response to evolving market demands and consumer expectations. Dieuwertje highlights how these regulatory changes are driving banks to develop more customer-centric products and services, fostering a more dynamic and interconnected financial ecosystem.

Customer expectations and technological advancements

Dieuwertje touches on the shift in customer expectations towards instant and integrated services, akin to experiences offered by platforms like Spotify. This shift is driving banks to offer financial services that are not only accessible but are also seamlessly integrated into other services and platforms that customers use daily. Related to this point, we discussed the complexities of developing new financial products that meet both regulatory standards and succeed customer needs.

The future of embedded finance

Looking forward, Dieuwertje is optimistic about the role of embedded finance in transforming the banking sector. She foresees a future where banking is not only about transactions but about being an integral part of a customer’s daily digital experience. The conversation concludes with thoughts on the potential for banks to innovate and remain competitive in a rapidly evolving digital landscape, where collaboration between banks and fintechs could redefine traditional banking models. We are excited to see the offerings that Rabobank’s banking-as-a-service unit will launch next. You can check out its current services here.