The Amazon Effect: A Supply Chain Revolution
I’ve been in financial services since the 80s. And if there’s one thing I’ve learned, it’s that history doesn’t repeat itself.
But it sure does rhyme.
Right now, I’m watching the Banking-as-a-Service (BaaS) and embedded finance space in fintech undergo its own “supply chain moment.” And it reminds me of a transformation we’ve seen before in e-commerce.
Remember when Amazon made that decisive shift from relying on FedEx and UPS to building their own end-to-end logistics network? The conventional wisdom was clear: stick to your core competency and partner with specialists. After all, why would a technology company want to own trucks and warehouses?
But Amazon understood something fundamental about serving enterprise customers at scale– when your infrastructure is fragmented across multiple vendors, you can’t guarantee the speed, reliability, or cost structure your customers are demanding.
By bringing critical infrastructure in-house, not only did Amazon reduce costs, they revolutionized what was possible. Two-day shipping became two-hour delivery. Seasonal bottlenecks became opportunities for growth.
In my opinion, the embedded banking industry is reaching that same inflection point today. How Amazon evolved from relying on others’ infrastructure to building an integrated logistics network that powers modern commerce, fintech platforms must and will evolve from being API aggregators to comprehensive infrastructure providers.
And it’s happening right now.
Today’s Fintech Stack: A House of Cards
For years, the standard playbook for fintech and embedded finance platforms has been to piece together eight, ten, sometimes twelve different vendors just to move money around. One provider for KYC, another for card issuing, another for ACH processing, another for risk management–and each of these relationships adds complexity, cost, and potential points of failure to the stack.
It’s like trying to guarantee Prime-level delivery reliability while depending on a different shipping company for each leg of the journey. When everything works perfectly, it’s fine. But in financial services, just like in logistics, perfection is a dangerous assumption.
Because here’s the thing about money movement–it’s not just a simple ‘get from point A to point B super-duper fast’. The stakes are simply different.
When a package is delayed, you might have an unhappy customer. When the money movement fails, you could be looking at millions in fraud losses or regulatory fines.
Or worse.
When Platforms Fail, People Suffer
That reality is hitting home hard right now with the recent shake ups we’ve seen with players in the fintech space.
When these embedded banking and fintech platforms stumble, it cascades through their entire customer base and then beyond. Suddenly you’ve got fintech companies scrambling to find new banking partners, enterprises trying to untangle complex vendor relationships, and regulators taking a much harder look at the whole ecosystem.
But there’s more to it than business.
Think about what this really means on the ground. When a fintech platform fails, there’s a small business owner who can’t make payroll because their banking provider suddenly shut down. A restaurant worker doesn’t get their tips at the end of a long shift. An insurance customer who lost everything in a hurricane has to wait days and weeks to get their claim money before starting to rebuild their life.
Money movement isn’t abstract. It’s deeply personal and urgent. When you’re that small business owner or that restaurant worker, you don’t care about vendor relationships or third-party dependencies.
You need your money, and you need it now. That’s why getting this right matters so much.
The Great Consolidation is Coming
The future of embedded banking belongs to stable companies that own their critical infrastructure while providing the flexibility enterprises need.
Amazon’s logistics transformation lets businesses focus on delighting their customers with their products instead of supply chain management. Tomorrow’s finance platforms will let banks and enterprises focus on their customer experience instead of juggling dozens of financial vendors.
Your Enterprise Action Plan
So what should banks and enterprises be doing right now to prepare for this transformation? Here are three critical considerations I’ve been walking people through when they come to our team for support:
- First, evaluate your current vendor landscape. How many different providers will you be depending on for critical functions? How much of their stack do they own and control? What happens if any one of them fails?
- Second, diligence your BaaS partner or fintech platform. How long have they been around? Have they been through multiple economic cycles? What banks are partnering with them? What does their customer churn look like? Are they fully funded?
- Finally, think about your speed to market. How quickly can you launch new financial products? How responsive are your platform partners? Are vendor integrations slowing you down?
My 2025 Prediction
History doesn’t repeat itself… but it sure does rhyme.
My prediction? By 2025, we’ll see a fundamental shift in how fintech platforms like BaaS serve their bank and enterprise needs. The successful platforms won’t be the ones with the most partnerships – they’ll be the ones who understand banking, risk management, and compliance at a fundamental level.
And there’s historical context for this I can speak to. For example: Ingo started by running actual bank branches under a joint operating agreement with a $23 billion bank. That was the original BaaS – we owned the operations, they provided the charter, and we followed the rules.
What I see happening in a few short years is necessary consolidation. For instance, most current BaaS players are still burning cash, dependent on venture funding, and juggling dozens of critical third-party relationships.
That model is risky at enterprise scale.
The future of BaaS and embedded finance isn’t about having the most integrations – it’s about having the right infrastructure to make finance and money mobility as fast and as reliable as Amazon makes package delivery when their customers hit ‘buy now’.
The Future is Already Here
At Ingo, I’m proud to share that we’re already building towards this future. When I was doing due diligence on getting deeper into embedded banking before we bought Deposits, it felt like I was a firefighter running into burning buildings while everyone else was running out.
But here’s what I saw through the smoke: an industry where venture-backed platforms were taking on massive risk by relying on dozens of external vendors to handle critical money movement functions.
Through strategic moves like our Deposits acquisition and our long-term investment in owning critical money mobility infrastructure, we’ve built what we’re calling the “Modern Money Stack”, combining both banking and payments capabilities in a vertically integrated platform.
This isn’t theoretical either–we own and operate the essential components that power almost $20 billion money movement each year. Our check risk management engine processes billions of dollars in real-time decisions for companies like PayPal, Venmo and Regions Bank. Our payment infrastructure handles billions in disbursements for financial institutions like KeyBank, gaming companies like Caesars Sportsbook, and major property and casualty insurers. Additionally, we provide the most complete digital account funding solution, offering a zero-liability fraud guarantee across all three critical form factors: check, card, and ACH.
By owning our technology, data and risk mitigation expertise and limited third party dependencies, we’re reducing the vulnerabilities that come with relying on a patchwork of third-party services. When you’re moving money for Fortune 500 companies, you can’t afford to have your ‘warehouse’ catch fire. Or worse, discover your core ‘logistics partner’ just ran out of venture funding.
Think about what Amazon did for e-commerce infrastructure. They made it possible for any business to offer world-class delivery without building their own logistics network. That’s the future of Banking-as-a-Service: platforms that let enterprises embed financial services into their products confidently, knowing their infrastructure partner will be there tomorrow.
The transformation is already underway. And unlike many players in this space, we’re not burning cash hoping to figure it out along the way.
We’re profitable, proven, and building for the long haul. The only question is: are you ready to be part of it?
