The Next Phase of Embedded Finance: Financial Workflows

Over the past decade, embedded finance has quietly reshaped how financial services reach businesses. Instead of small businesses going directly to banks or standalone fintech products, financial services have been integrated into the software platforms they already use every day.

This shift has been driven by a simple idea: financial services work best when they are embedded inside the workflow where money actually moves.

Most of the first wave of embedded finance focused on payments and lending. Platforms embedded payment processing so they could facilitate transactions between their users and their customers. Later, many began offering working capital and loans using the transaction data they already had.

This model proved incredibly powerful. Platforms gained new revenue streams, users experienced fewer operational headaches, and fintech infrastructure providers built entire industries supporting the trend.

But something interesting has begun happening over the past few years.

Payments may capture the transaction, but they don't create it.

And that distinction is shaping what comes next.

Payments are a natural entry point for embedded finance because they sit at the end of a transaction. When a customer pays a bill, completes a checkout, or settles an invoice, the platform facilitating that interaction can process the payment and collect a fee.

That's why so many platforms started there.

However, payments represent only one moment in a much longer financial workflow. Before a payment ever happens, a number of other processes occur:

These steps are collectively known as financial workflows - the operational processes businesses use to manage money moving in and out of their organisation.

For small and medium businesses, these workflows are often fragmented across multiple tools. A company might create invoices in accounting software, send them via email, track payments manually, and reconcile transactions later. Each step requires additional work and introduces friction.

For platforms serving SMBs, this fragmentation represents a huge opportunity.

If payments capture the final step in the process, financial workflows sit upstream, where the transaction actually begins.

We're now seeing a second wave of embedded finance emerge - one that focuses less on individual financial products and more on the automation of financial workflows themselves.

Instead of simply enabling a payment at the end of a process, platforms are beginning to integrate capabilities like:

These functions form the operational backbone of how businesses manage their finances day to day.

By embedding these workflows directly into their product, platforms can do more than facilitate transactions. They can become the system where those transactions originate and are managed.

The implications are significant.

First, platforms gain deeper integration into the daily operations of their users. Financial workflows tend to be sticky because they are tied to core business processes.

Second, these workflows generate valuable financial data that can power other services such as payments, lending, and analytics.

Third, platforms can increase the overall transaction volume flowing through their ecosystem because they are now involved earlier in the financial lifecycle.

It helps to think of embedded finance evolving in stages.

The first stage was embedded payments. Platforms enabled transactions between their users and their customers, capturing a small percentage of each payment.

The second stage introduced embedded lending, where platforms used payment data to offer working capital or credit products to their users.

What we're beginning to see now is the emergence of a third stage: embedded financial operations.

In this model, the platform becomes the system where financial activities are initiated, tracked, and automated.

Invoicing is a good example. If a platform enables a business to generate and send invoices directly within the product, it effectively controls the beginning of the payment process. Payments can then be embedded as the natural next step, creating a seamless end-to-end flow.

Once that foundation exists, additional capabilities such as automated reminders, payment reconciliation, reporting, and financing can be layered on top.

This shift moves platforms from being simple payment facilitators to becoming financial infrastructure for their users.

Several forces are pushing platforms in this direction.

User demand

Small businesses increasingly expect the tools they use to handle more of their operational workload. Instead of juggling multiple disconnected systems, they want software that simplifies their day-to-day processes. Financial workflows are particularly attractive to automate because they are time-consuming and repetitive.

Revenue expansion

Payments generate revenue through transaction fees, but they capture only a portion of the economic activity happening within a platform. By embedding financial workflows, platforms can influence more of the underlying transaction lifecycle. More invoices created through a platform typically lead to more payments processed through that same platform.

Data advantages

Financial workflows produce rich datasets. Invoicing, billing, and accounts receivable activity provide insights into business performance, cash flow patterns, and customer relationships. This data can power additional financial products and analytics.

Platform defensibility

Software products become harder to replace when they are embedded into core operational processes. Financial workflows are deeply integrated into how businesses operate, making them a powerful driver of user retention.

Some of the most interesting examples of this evolution are coming from vertical SaaS platforms.

Companies that serve specific industries - hospitality, healthcare, construction, e-commerce - often sit at the centre of their customers' operational workflows.

Because they already manage scheduling, bookings, inventory, or orders, extending into financial workflows becomes a natural next step.

Take a restaurant platform, for example. If the platform already handles reservations, POS transactions, and customer management, adding invoicing or bill payment functionality allows restaurants to manage supplier payments or corporate bookings without leaving the system.

Similarly, a construction management platform could enable contractors to generate project invoices, track payments from clients, and reconcile transactions automatically.

In each case, the platform evolves from operational software into something closer to a financial operating layer for the business.

Despite the opportunity, building financial workflows is not straightforward.

Unlike payments, which are often handled by specialised processors, financial workflows involve multiple moving parts.

A robust invoicing or accounts receivable system requires:

Building and maintaining this infrastructure internally can be complex and resource intensive.

As a result, many platforms are starting to look for infrastructure providers that allow them to integrate these capabilities quickly without building everything from scratch.

This mirrors what happened with payments a decade ago, when APIs and infrastructure companies made it dramatically easier for platforms to embed payment processing.

What makes financial workflows particularly interesting is that they sit at the intersection of operations and finance.

They are not purely financial products like loans or payment processing. Instead, they are software tools that enable financial activity to happen more efficiently.

For SMB-focused platforms, this means financial workflows can enhance the core value of the product while also opening new monetisation opportunities.

A platform that helps businesses manage their operations more effectively becomes more central to the business itself.

And when financial transactions flow through that same platform, the economics of the model become even more compelling.

Embedded finance began by bringing financial services closer to where transactions occur.

The next stage is bringing financial operations directly into the software platforms businesses rely on every day.

As this shift continues, we're likely to see platforms take on a much larger role in how small businesses manage their finances - not just at the moment a payment happens, but throughout the entire lifecycle of a transaction.

Financial workflows are becoming a foundational layer of modern business software.

And as platforms expand further into these capabilities, the line between software provider and financial infrastructure will continue to blur.

The companies that recognise this shift early - and build the tools to support it - will play a major role in shaping the next generation of embedded finance.