How Embedded Finance is Transforming the Office of the CFO

In this panel, fintech and banking leaders discuss how they're partnering to build new products that redefine traditional CFO responsibilities and unlock new opportunities for growth and innovation. Panelists will explore how embedded finance is reshaping how CFOs manage financial operations, enabling greater visibility into cash flow and improved decision-making.


Transcription:

Chana Schoenberger (00:11):

Welcome to the Digital Finance and Crypto Experience Room here at Digital Banking. Can you guys hear me? Awesome. Okay. I'm Chana Schoenberger. I'm the Editor-in-Chief of American Banker. Really glad to have you all here at Digital Banking 2025. And this panel is called How Embedded Finance Is Transforming the Office of the CFO. So if any of you are CFOs or serve CFOs, you have come to the right place. And I have with me here, Erica Dorfman, who is the EVP of Global Financial Products at Brex, the credit card, and I have John Piazza, who's the Head of Product at Newline by Fifth Third. Welcome.

Erica Dorfman (00:49):

Thanks for having us.

John Piazza (00:50):

Great to be here. Yes.

Chana Schoenberger (00:52):

All right. I love this buzz in the room. It's great. It's awesome. Okay, so we'll just start with the title of the panel, sort of like a why, what does Embedded finance do for CFOs?

Erica Dorfman (01:04):

Happy to kick off for us at Brex. Embedded finance means a bunch of things, and I'll let John talk about how we partner with Fifth Third, but embedded finance, when we think about it as a provider of financial services to our customers, means how do we make sure that the workflows that finance teams are doing are as automated as possible? And everything that we're doing from a payments perspective or a banking perspective is directly integrated to all the workflows that A CFO needs to do with regards to reporting and data and managing of funds flow, whether that's expense management or accounting, reconciliation, you name it. And so embedded finance really enables us to offer as much automation to our customers as possible.

John Piazza (01:51):

I think that's a perfect explanation of embedded finance. We think about it from a very similar perspective. We think about embedded finance as putting financial products or banking products is the lens we come at it from in context and at the point of need. And so Incon might be in a CFO's ERP or business platform that they manage their fp and a through at the point of need just means you don't have to go to 10 different platforms to do it. And one of those platforms might be the bank platform itself. And so through partnerships like with what we have with Brex, we're able to take banking products, which typically live within the four walls of a bank and get them into the hands of the end users, into CFO's hands at the point of need. And that's generally in the software they already have.

Chana Schoenberger (02:39):

Okay, cool. So you two are partners. You have a formal partnership. Tell me what it is your two companies do together?

Erica Dorfman (02:46):

So Fifth Third is a great partner of ours. We've been working with you guys for about four years now. They're one of our bin sponsors, meaning that they allow us to provide credit cards to our customers. We're excited to hopefully be doing more with them very soon, but in that corporate card partnership, fifth Third also allows us to experiment even with new card products. So not just, okay, let's create a credit card, but who are we offering credit cards to? Where do those credit cards serve? What are the components of that credit card that really make it something special to Brex? And also effectively to Fifth Third, because all of our customers that use the Fifth Third bin are also Fifth Third customers.

John Piazza (03:33):

We've been thrilled to partner with Brex for years New Line as a business. Just to provide some context, here is fifth Third's embedded finance platform. And what we do is we enable companies like Brex to build financial products on our regulated infrastructure. So we offer a set of APIs and managed services that help companies build, launch and scale financial products. And we've been really pleased to partner with companies like Brex who are pushing the boundaries of what can be done in finance and bringing financial products from Fifth Third behind the scenes to customer segments that we otherwise wouldn't touch.

Chana Schoenberger (04:10):

Okay. Okay. So what is it that CFO end users are asking for in terms of functionality when they call you and what are they using right now to accomplish those goals?

Erica Dorfman (04:23):

So John said I had to take this one, so I'll take this one. As all of our end customers are effectively founders, CFOs or folks in the CFO office. And I think the thing, obviously this is very trendy right now, but the thing that folks are looking for that's net new over the past year is really looking at AI and automation in modernizing their software suite and modernizing what they do as the office of the CFO. And that starts everywhere from the early stage customers that we serve where they're just getting founded to customers that are big public enterprises and dealing with multinational, tens of thousands of employees where their systems are incredibly complicated and AI can actually be really, really advantageous for how they think about adding efficiency to their workflows. When we look at the more consistent and overarching themes that we see from CFOs, what we have consistently heard since our founding is really looking for a single pane of glass.

(05:27):

So what they want to do is be able to manage their entire team, manage their entire business in one place, and they want to be able to do that in a way that's efficient, adds visibility, adds simplicity, and gives them the control that they need to feel very confident in what they're doing as the CFO managing the funds of their company. But they don't really want to be in the business of saying no all the time. That's really an unpleasant position that I've been a CFO in a former life, and it's not a very fun job when all you have to do is tell people no and track and hound people for their expenses.

Chana Schoenberger (06:03):

I feel like my CFO is fine with seeing no.

Erica Dorfman (06:07):

Depends on the type, but I think what folks really want is to make sure that they're good steward of their corporate finances and that's ultimately the job of the CFO. And so what we're able to do and what we've been able to do in terms of building towards that is a give folks the visibility of having everything on one platform. And that means starting with banking and corporate cards, but also global corporate cards. So being able to have your global operations in one place and then adding as much automation as possible on top of that where you have the visibility to be able to say, this is an abnormal expense, I need to review that. Or Hey, there's no receipt attached to this, but Brex automatically creates the receipt with the L two L three transaction data, so I don't need to hound someone for that. So there's a lot that we can do on the software side to make the job of the CFO and the office of the CFO much easier and just frankly automated so they can spend their time doing things that are more strategic for the business versus looking for receipts.

Chana Schoenberger (07:09):

So how do you get the system to say no so that the person doesn't have to?

Erica Dorfman (07:14):

Yeah, and this is I think where Brex is very, very differentiated, and folks like Fifth Third who partner with us on the card side make it possible for us to do this, which is Brex actually does our own card processing. So we directly process with MasterCard. What that means is we have a very special relationship with Fifth Third in order to do our card issuing, but by virtue of us processing directly with MasterCard, we have the ability to include information in the processing path that allows us to have our customers effectively pre-authorized spend. So rather than doing an expense report after where a customer says, okay, well, an employee says, Hey, I spent all this money, tell me it's okay, and sorry, I spent more than I told you I was going to.

Chana Schoenberger (07:59):

I went from digital banking to a dive trip in the Caribbean.

(08:03):

I'd like to charge that to the company.

Erica Dorfman (08:05):

Exactly, oops, sorry, I forgot. Here's my bill. And that's I think the old way of doing things is ask for forgiveness and that doesn't really work, especially when you have the ability to look and do the approvals in real time. And so what we do with our customers is effectively enable them to preauthorize spend, control spend before it happens and enable them to effectively say, great, you have this great American Banker Conference. Go down to Florida. Here's the budget. We know this is going to cost you X, Y, Z, let's call it five, five grand. There's a few of you coming, great. You spend all weekend. And actually that budget only goes for those three days because you're not supposed to be at this conference for a week and a half. You weren't supposed to stay in BOCA a bit longer, and that's fine if you do do, but this card is going to stop working after Tuesday.

Chana Schoenberger (08:58):

So literally on Wednesday morning, I try to go pick up my snorkel and the card is declined,

Erica Dorfman (09:05):

The card will be declined. But let's say for example, and this is actually a good case study, right? Let's say for example, the reason you're going snorkeling is because you have a really great customer meeting and that customer really loves snorkeling. And so you're going to go take them snorkeling to build that relationship. And so the card declines when you're going to rent that snorkel and you say, oh shoot, I forgot to tell my CFO or my manager that I was going to go snorkeling with my client. Let me go send them a message really quick, and you send them a message on Slack or text, whatever, you say, Hey, can you expand my budget? I forgot to tell you I'm going to go snorkel with Erica. She loves it. We're building this great relationship. They say, no problem. They update it on Brex, you're still standing there at the snorkel shop gets updated, great swipe again. All things are good. So this gives CFOs a huge amount of control over what they're approving for spend without having to say, Hey, I need to just give everyone a blank check of a card limit that I don't know what it's going to be spent on.

Chana Schoenberger (10:04):

Wow, okay. But that requires the CFO to be super proactive. They've got to sit down with you before you take the trip and say, this is going to be your budget. Here's what you're allowed to do. If you try to do things, meals are fine, but if you try to take them to a ball game, I'm going to decay it.

Erica Dorfman (10:23):

So it's actually not that, which is great. The benefit of this is you can ingest your expense policy into Brex automatically. And so having that per diem or having whatever policies you have can automatically be uploaded. And then you can also put that onus onto employees to say, Hey, want to, I need a budget request here, let me submit it. So rather than the CFO needing to know everything that's going on and proactively send down requests, the team can ask for them, and you can automatically apply that in your policy to say, okay, everyone gets a stipend of $200 a month for X, Y, and Z, or everyone gets this exact same per diem or mileage or whatever it is, and that can be automatically applied.

Chana Schoenberger (11:08):

So what does this look like on the Fifth Third side? What are you guys getting and seeing?

John Piazza (11:13):

Before I jump there, Hannah, one thing I will brag on the Brex side is as a CFO at a company, you get a lot of benefits from using the Brex platform within your own function, which not only helps you deliver the results that you're expected of within your function, but helps you lead by example, right? You're bringing in a platform that gives you realtime visibility, realtime control drives you to a more proactive relationship with your function and your employees. And that's what the CFO is trying to drive as a behavior in all the other functions and all the other divisions of the company. So not only do you get a really powerful tool with a better user experience, but the CFO actually gets to step into more of a cultural leadership position across all functions of the company.

Chana Schoenberger (12:00):

Interesting. Okay. So for instance, today we got an email that back at the office for the folks who are not working on digital banking, they're bringing in cupcakes. So it would be one of these things where I assume that our account, our office manager is ordering the cupcakes and they're getting debited from our account. So from the bank end, all you see is just the money comes out. How does this work?

Erica Dorfman (12:27):

Yeah, I mean, structurally from a relationship with Fifth, third and Brex, we settle with Fifth Third for all the transactions. Brex is keeping the ledger of all of our customers and customer transactions. So from that standpoint, it's as though from a network settlement perspective, fifth Third is settling with the network and we're settling with Fifth Third. But when it comes to sort of the additional data that is going out to any of our customers, all of that is managed by Brex. Although Fifth Third obviously gets the same transaction data.

John Piazza (13:01):

Architecturally, one of the things that we've done is build our embedded finance platform to be hyper module. And what that does in practice is it allows clients like Brex to be able to pick and choose the pieces of the stack that they want to own, where they can actually build differentiation into their platform. So we don't need to be the card processor. Brex is actually the card processor. They've built that native integration with the networks, and it's our ability to take every one of those pieces and swap them in with our clients when it makes sense, is what allows us to enable some of the innovation here.

Erica Dorfman (13:34):

One thing I didn't mention but should is with direct processing and with some of the embedded partners, just to think through a little bit more what that direct processing and what our relationship with Fifth Third allows us to do as Brex, we can actually directly integrate with different platforms, which allows us to give our customers 100% reconciliation without having to take any action. So all of that transaction data that comes through when you book travel or you do procurement when you're doing that on the Brex system, that can be directly mapped, particularly when we're talking about folks that we have embedded partnerships with, like Nvo and zip, which we just announced. That gives our customers the ability from the CFO suite to effectively just directly ingest all of that data into their GL without needing to go back and pair different CDF files and mapping CSVs and taking everything offline. All of that just gets automatically patched and mapped through. So there is really a direct pipeline of information that doesn't need to be engaged with and managed. It's just a hundred percent correct.

Chana Schoenberger (14:49):

Interesting. Okay, so the buzzword for 2025 is definitely AI. So I would love to find out what you guys are seeing in AI and automation in terms of what CFOs are asking for. How does this interact with embedded finance?

John Piazza (15:06):

I'm happy to start. I think Erica may have some more fun examples to share on this. The things that CFOs are looking for out of AI is really just a continuation of what they've already been doing. The best CFOs have been using automation in their business process for as long as it's been available, but what's changed is that the frontier of what you can do, the amount of things that you can automate has radically shifted and radically expanded. You can not just do deterministic flows like if this, then that statements, you can open up the world to far more human oriented tasks, things that don't just require automation but require some degree of judgment, and you can actually embed that judgment directly within your products. Erica, you should share some examples of how you're actually doing it. It's very cool.

Erica Dorfman (15:55):

Yeah, we were talking through a few of these earlier today, and I think I'll give a couple of examples. But I would say generally speaking, when we look at our software product, which is direct, it's part of our payments product. So that's sort of the magic of Brex is its payments and software in one kind of single platform. But when we look at our expense management product, I'll call out our accounting software, and within our accounting software and our accounting automations, what our customers see is really a suggestion of rules. So our system will effectively look and say, okay, I know what this transaction is. I've seen actions taken and categorizations taken before. I have a lot of context around this transaction in terms of who's doing it, what the transaction is from the additional depth of data that we have. Here's what I think this transaction should be, even though you don't have a rule assigned, so I'm going to suggest a bunch of different rules, even though you don't have accounting rules assigned to this, our customers accept those rules at roughly 80%.

(16:57):

What that means is that they're getting more efficient because after those rules suggestions are accepted, our system then learns that choice. So it applies those rules, and then the next time a bunch of transactions come in without an assigned rule base, it's getting smarter and it's continuing to do this until everything is auto-assigned and all you're getting are exceptions. The same thing can be said for effectively exceptions for expense reviews. So when you think about the historical approach to expense reviews, it was sampling, right? Where you would say, okay, here's a 1% of the sample and let me check and see if everyone did things according to policy. I look at these expenses, it's all very manual, okay, my audit says that 1%. There was a few that were off, but broadly it was okay. With Brex, what you can do is a hundred percent sampling for all of your transactions to look and see what's in policy and what's not.

(17:53):

That gives all of the CFOs and all of the finance teams that we work with a huge amount of comfort, right? Because they can actually see, okay, now I know for a fact how this is going relative to my policy. And it's not just the policy, right? It's context around that, Hey, I think this is a suggested memo. Hey, this looks strange. Even though it's in policy, it's really abnormal, right? It's abnormal because this person never travels and this expense happened in Florida and they're based in Seattle. That's strange. It might be in policy, but this is a weird expense. You should probably look at it. And so that context would often be lost if you were doing a sampling or B, didn't have the support of an AgTech system or have the support of AI to actually read all that data and think about it in the context of why someone would be spending. And so it's a much more intelligent and effective system that historically would've been done by humans, but can be done by AI today.

Chana Schoenberger (18:53):

So that's both catching fraud as well as catching employee malfeasance

Erica Dorfman (18:58):

Or even just, oops, I forgot to write a memo there. I think it doesn't, I mean, of course that's when you think about the worst case scenarios, those are definitely two of the worst case scenarios, but it's also about being just compliant with the amount of tax reporting that you need to do and making sure that all the receipts are IRS compliant and doing the things that need to get done because they're important, but of course, also catching those potential bad actors or bad behavior.

Chana Schoenberger (19:31):

Great. No, no, that makes perfect sense. How about you, John? What are you seeing in emerging frontiers of AI and automation?

John Piazza (19:39):

The automation piece is where everybody starts. I think the thing that's more exciting to me, although that is very exciting and the value is painfully obvious, right? You should be able to radically increase efficiency through better and more comprehensive workflows. The thing that I think becomes interesting to Erica's point is you also free up your employees, not just the people submitting expense reports, but the people within the office of the CFO to do things that are more strategic, which means understanding your data more effectively. The workflow will improve the quality of data. If you have good data and you're using ai, now you can interrogate the data for more relevant insights. And I think that's what gets really interesting is you don't have to just use canned reports. You don't have to have a team of analysts trying to find patterns. You can actually lean on AI to do a lot of that, but it starts with the quality of the data that you intake. And so the logical progression is get the data, get the workflows, and then start to do more strategic things with it.

Chana Schoenberger (20:40):

So that frees up your analysts, what will you have them do now,

Erica Dorfman (20:46):

Words of oyster. But I think historically, right? You look at the office of the C ffo and a lot of review, and then you have strategic finance, which is sort of more thinking sort of net new growth or improving margins. And I think you can really unlock the potential of a team by saying, Hey, everyone gets an opportunity to think differently about where can they deliver value. And now that you don't have this 30, 40, 50% of your time spent doing a more rote task, what should the business be doing differently or how can you deliver net more value to the organization?

Chana Schoenberger (21:30):

It's probably a more fun job too. I mean, I'm sure nobody likes to go through expense reports.

Erica Dorfman (21:35):

I think that's right.

John Piazza (21:37):

Agreed. I mean, imagine if you could free up 30% of your administrative time, what would you do? I think it's a really exciting thing to consider. We're just starting to see it.

Chana Schoenberger (21:49):

I know what I would do. I would interview more bankers.

John Piazza (21:52):

Great answer.

Chana Schoenberger (21:54):

Everybody wants to talk to bankers. Okay, folks, we're going to have questions in a few minutes. So start thinking about what you want to ask these exciting executives. So in terms of embedded finance, it is one of our 10 categories for innovation of the year. It's one of the big trends we're expecting to see for 2025. Where else do you see it going other than AI?

Erica Dorfman (22:18):

So I think for us at Brex, the embedded angle of what we've been doing has been a really big push for us in the past year. I mentioned the two partnerships that we've announced with NVO and zip. And I think what's unique about those is historically those were folks who had their own card programs or were thinking about having their own card programs. And the reality of having a card program, as I'm sure many in this room know is it is a pretty large endeavor, especially if you're going to grow it and manage it and finance it. And so thinking about how to optimize for what we do best as a financial services provider and software provider, and then also what our partners do best. For example, with nvo travel booking and being a TMC or with zip doing procurement software, we're able to give our customers this best of both worlds partnership.

(23:14):

And we are definitely expecting to double down and planning to double down on efforts like this. What it results in is a great outcome for our customers who continue to get the best possible service and software that they want for those particular workflows. And then they're also getting the best financial service and the best card with Global Access and all of the amazing card and investments that we've been able to do as Brex with great rewards on all of their spend without needing to then go back and get a bunch of different partners in order to create this patchwork together, we are coming to them with a full solution.

John Piazza (23:55):

I think two things. One is just more, there will be way more embedded finance partnerships. To Erica's point,

Chana Schoenberger (24:02):

More is the new More.

John Piazza (24:03):

More is the new, more. There will just be more. And part of the reason is some of the companies who have been successful in this are really starting to hit scale. So there's good business cases out there. Some of them are going public like ServiceTitan, where you actually can see how much value embedded finance offers from a dollars and cents perspective, and that's going to fuel companies to take the leap into it. So I'd expect to see a lot more, particularly within vertical SaaS companies, and I'd expect to see more nuanced products hit the market. Brex started with a very focused segment and they brought a very innovative card product to market. Half of the other embedded finance companies out there are taking a very straightforward product and they're embedding it. And it's amazing how much value you've created just from that. But as you cross that frontier, you'll start to see more nuanced products embedded it in more niche vertical SaaS companies.

Chana Schoenberger (24:58):

Super interesting. Okay, we're ready to take questions from the floor. Does anyone have a question? There's a microphone. Raise your hand and we'll walk over to you. You already know everything there is to know about embedded finance. Anyone have a comment? Doesn't have a question mark at the end. Yes, hold on.

Audience Member 1 (25:28):

Thanks. So my question is to Erica, you say, you mentioned that the CFO can approve an expense. Let's say I'm taking you to snorkeling, right? But if my CFO is not available, is AI capable of taking that decision in the absence of the CFO?

Chana Schoenberger (25:52):

So can the AI allow me to go snorkeling with that client?

Audience Member 1 (25:56):

Exactly.

Erica Dorfman (25:57):

I think right now, really it just depends on how a customer sets up their configuration with Brex. And so this is really sort of thinking about what does it mean to be a trusted employee? What does it mean to have sort of the degree of variance or legal room in your expense policy? Within Brex, our customers can set up completely unlimited expense policies with no barriers, right? So if you want to just say, Hey, I'm a solo founder, I am approving, there's no one else to approve. It's just me. I'm going to swipe the card and why would I set up an expense policy? We have plenty of those customers on our platform, and of course, it doesn't really make sense for them to have a lot of limitations. On the flip side, you could have an organization that has a huge volume of SDRs as an example, and in that scenario, great, they're a sales led organization, but you probably don't want all of those SDRs to go out and spend without approval or to spend in an unlimited way.

(26:59):

And so really the control that we give is to our customers to be able to say, here's the type of approval process that I want. Here's who I want to be in control of that approval. Here's how I want the approval to happen, and here's the variance that I want to create. And that happens at setup, and that can be adjusted throughout, but it's really, I think giving the control of the card and the control of an expense policy back to the customer and saying, Hey, you guys, it's your company. Run it in the way that you see fit. We'll give you suggestions on what we think works best for a company like you, but ultimately it's your money. You can do what you want with it.

Chana Schoenberger (27:38):

Great. I hear applause, which means that our time is up. Oh, wait, one more question. We have time for one more

Audience Member 2 (27:49):

Quick question. With embedded finance, this is more for fifth. Third, with embedded finance, you are enabling clients to bank with you directly from their platform. What controls you have in place from the bank side, because I understand that now what you were saying, the approval process, the entitlements, all those things usually happen with embedded finance within the client side, right? Do you have any control in place, any entitlement mapping with the users in your online banking, or you completely rely on the security and the entitlements and the controls on the client side?

John Piazza (28:32):

It's a fascinating question. Embedded finance is a world where you take something which is ordinarily all sat within one pane of glass and one product experience, and you start to break it up, which means Fifth Third owns some components of the stack. Brex owns a lot of components of the stack, so there's not a need for duplicative entitlement roles, duplicative controls in certain areas, but the controls the bank has are quite extensive. We could probably be here for a whole nother session talking about the controls we have in place, but we work closely with Brex and our other partners to define who needs to own the control, where the risk is, what are mutual levels of comfort are with it to really define the control framework.

Chana Schoenberger (29:16):

Great. Wonderful. Well, thank you so much for being with us.