M&T upgrades as banks seek closer ties to corporate clients

• Key insight: FIS has introduced a new embedded banking platform, with M&T among its first users. 
• What's at stake: Embedded finance is growing fast, attracting investment from across the financial services industry, and boosting competition. 
• Forward look: FIS is testing the platform and plans a wider rollout in the fourth quarter. 

With investment in embedded finance projected to spike in the coming years, banks are looking for a way to carve a niche. For M&T Bank, the goal is to improve relationships with existing corporate clients.  

"It's another way to reach our customers," Rakesh Sahay, vice president of embedded banking at M&T Bank, told American Banker. "In many ways clients come to us through online or mobile channels, now we're taking the bank to them through the software that they're using."

M&T is among the initial users of a platform from FIS that enables businesses to access bank services inside their own software with less navigation. The bank and FIS are operating in a large and growing market for embedded banking and payments. Embedded banking refers to enabling access to banking through a customer's technology, while embedded payments means placing checkout directly inside a nonpayments technology service.

Juniper Research says the global embedded payments market will grow by 134% between the end of 2024 and 2028. And KPMG reports 58% of banks said embedded finance is a priority in the next year.

New plumbing

FIS on Thursday launched an embedded banking platform that enables U.S.-based banks to offer banking services directly in the business software that their corporate customers use. 

"This is the next evolution of digital banking that is playing out now," Jon Briggs, global head of embedded solutions and money movement at FIS, told American Banker. 

The banks can offer the platform to their clients through application programming interfaces, software development kits, embeddable widgets or white-labeled applications. FIS says the banks maintain ownership and regulatory control because the accounts are on the banks' balance sheets. 

"For us we get strong visibility into everything that goes into the account and good overall operating insight," Sahay said. "It's a unique opportunity for us." 

The banks at launch include M&T, Cogent Bank and Commercial Bank of California, which are using the technology as part of a pilot test. FIS anticipates a wider rollout, including payments, during the fourth quarter. 

For FIS, it's a way to expand its connections to bank clients at a time when the company is focusing more on bank technology following its purchase of Global Payments' card-issuing tech unit, while selling its merchant tech division to Global Payments. The embedded banking platform joins an agentic commerce initiative, among other recent projects. 

"This platform will allow banks to extend their services into the fintech and software economy," Briggs said.

Lots of players

Other banks and technology firms are selling embedded banking, payments and finance.

Fifth Third recently made an investment in Payload, an embedded payment firm that is expanding from its original real estate clientele to other industries that rely on payments that involve multiple parties, such as law firms, property managers, construction companies and franchisers.

Fifth Third, which sells embedded payments through its Newline division, has stressed a goal of "creating value" by being in the tech stack of corporate clients, even if it's on a white-label basis. Fee revenue at Newline grew 53% year over year in 2025, revealing demand for embedded finance.

In another recent project, Key used embedded payments to enable a dental software company to sell multichannel payments to dental practices. That includes online and mobile payments, combined with digital onboarding. Healthcare payments, like those of real estate and law firms, involve customers, merchants providers and third parties.

"Keeping up with technology is becoming increasingly important for embedded banking providers, but it's not simply a question of having modern APIs or the latest technology stack," Chris Miller, a managing director at Cornerstone Advisors, told American Banker. "As embedded banking continues to gain traction, providers need to make it easy for fintechs, software companies, and other third parties to integrate financial products into their platforms."

Read more:

• OCC and FDIC finalize narrower bank supervision procedures
• As education costs rise, credit unions chip in for employees
• A $111 million scheme to keep bad merchants banked
• How Google and Apple's youth plays are pressuring banks

Relevance in embedded banking requires modern technology, but it also requires the ability to do it securely, reliably and in a way that satisfies the risk, compliance and operational standards that banks and credit unions are expected to maintain, according to Miller. 

"For many of the larger bank technology firms, the challenge isn't necessarily understanding embedded banking. It's modernizing decades' worth of infrastructure and processes while still supporting existing clients. A fintech built in the cloud 10 years ago doesn't face the same constraints as an established provider supporting hundreds or thousands of financial institutions," Miller said, adding a good example of this challenge is real-time processing. "It's one thing to expose payment capabilities through APIs. It's another to support real-time fraud monitoring, dispute management, reconciliation, compliance oversight and resiliency requirements at scale," Miller said.

The same is true for embedded deposit accounts, lending or card programs. "As these solutions mature, success becomes less about launching a product and more about operating it effectively over time. I think the conversation is shifting from 'Can a provider support embedded banking?' to 'Can it help financial institutions and partners scale it safely?'" Miller said.