Cash flow management drives embedded finance KeyBank adopts

The Cleveland, Ohio-based regional bank KeyBank has had a busy month securing embedded finance’s place in the current market. The bank has made public the conclusions of a report titled “U.S. ISV Analysis,” according to which 78% of ISV firms currently provide embedded banking solutions. A cooperation between the business and EMTransfer was also announced, enabling real-time payments to be transmitted over The Clearing House’s RTP network.

To better assess ISV demands, partnerships with processors, market weaknesses, product gaps, and interest in integrated banking solutions, KeyBank asked TSG to survey 205 ISVs in the fall of 2022.

According to the poll, most firms knew about embedded banking. 78% of ISVs offered embedded banking solutions. Cash flow management systems were well-received by ISVs. Whether they offered embedded funding.

Cash flow management was the main solution for businesses that already provided embedded finance solutions (20%). Cash flow management was also cited by those who do not already provide embedded financial solutions as the most intriguing and practical application of the technology (41%).

33 percent of ISVs said there was a considerable demand for embedded banking solutions among retailers. The merchants who demanded embedded funding the most (60%) were cemeteries and funeral homes. They were followed by residential property management companies (47%) and veterinary retailers (50%) respectively.

There is a chance for paytechs to grow their clientele, and it seems likely that this demand will only rise. 39 percent of ISV replies, according to KeyBank, clearly indicated a desire to continue working with their preferred processor over the following two years. Consequently, 61% of software vendors may be willing to switch from their current preferred partner.

Promoting the adoption of embedded finance

By working with organizations from many industries, KeyBank is promoting embedded finance adoption even more. The most recent partnership is with EMTransfer, a supplier of a cash management technology tailored specifically for real estate. Through new APIs offered by KeyBank, the cash management platform now supports real-time payments across The Clearing House’s RTP network.

One of the first companies to leverage KeyBank’s APIs is EMTransfer. Sending real-time payments over the RTP network is made possible by the APIs. The systems at EMTransfer were fully integrated with RTP capabilities in less than two weeks.

Bob Beams, CEO of EMTransfer, said the relationship with The Clearing House and KeyBank will transform real estate money flow. Platform integration gives settlement organizations a secure, productive industry-specific banking solution to improve operations.

Embedded services’ benefits

Additional features and functionalities offered by the RTP network speed up EMTransfer’s real estate payment procedure include:

• Immediately confirming receipt notifies all parties involved in the real estate transaction that the payments have been received, preventing fraud;
• Avoid paying per diems because the RTP network is always active. As a result, it does away with the worry of missing wire cutoff periods and having to pay a per diem fee on the seller’s payout sum;
• Agent commissions: Pay out agent commissions whenever you want, seven days a week, over the RTP network. This also eliminates the requirement for sending a check;
• States that permit purchasers and sellers to employ different title and escrow companies can rapidly transfer funds between their trust accounts if their financial institutions are members of the RTP network. Split-closing states;
• Request for payment: To request and receive money to close, use the “Request For Payment” feature of the RTP network.

KeyBank Head of Commercial Product Jon Briggs takes delight in helping developers easily incorporate banking services into their products. Moreover KeyBank’s engineers and Developer Portal provide numerous resources, assistance, and tools to integrate and use their financial services, improving client experiences and financial sector innovation.

Giving clients additional options

EMTransfer offers a cash management experience that is integrated with the client’s KeyBank trust account using APIs from the API Developer portal of KeyBank. This enables clients to:

• Create and classify the transfer of funds (i.e., the receipt of earnest money, the sale proceeds, and the payment of agent commissions) as necessary;
• Utilizing an accustomed P2P user interface, electronically and securely gather from customers written authorization, bank account information, and electronically signed lien waivers;
• Use the proper payment rail (RTP, Wire, ACH) to start transferring money straight to and from their trust accounts. All of this without involving a third-party processor;
• Finally automatically update each party on the progress of the electronic transfer of their monies; Completely provide client and bank receipts to prove the money transfers throughout the real estate transaction.