While some view the One Big Beautiful Bill Act as a green light for lax regulation, Green Dot Senior Vice President and General Manager of Embedded Finance, Renata Caine, said many envision themselves in a strict environment for several important reasons.
Green Dot offers debit, checking, credit, prepaid, and employer payroll cards; money processing services; tax refunds; cash deposits; and disbursements. Last fall, Green Dot debuted Arc, which focuses on embedded finance. When it comes to risk and compliance, Caine said many clients design their tech stacks so they can easily adapt to changing times. Envision a shopping cart, where some items are needed today, while others can be added on the next trip.
“We have a perspective of where the ecosystem is going, but our partners are super important to us, so understanding their needs and weaving it into what we plan on doing is what we practice, day in, day out,” Caine said.
The case for stricter regulation
Caine sees the One Big Beautiful Bill reinforcing strong regulatory preparation. Business abhors uncertainty; as oversight levels change, they need assurance that accountability, clarity, and flexibility are included in their technology. Better now than to have to hurriedly add it in the future.
“I think self-regulation is going to be more and more important, and… doing it at a higher level to ensure that you’re always meeting regulation,” Caine said. “Self-regulation, a lot of the folks are doing it today, just to stay ahead of what might be coming down. And we’ll see more of that.”
Regulation ain’t going away. Some individual bodies may ease off the gas, but many others are concerned about plenty of issues, like at the state level. And when each state designs its own policies, maintaining compliance becomes more complex. Should consumers engage in increased litigation, they’ll need protections. Taken together, it highlights the importance of self-regulation.
Stricter regulation for embedded finance, real-time payments
More than half of embedded finance providers agree that increased regulation is good for the industry. Caine said platforms introducing embedded finance tend to have loyal customer bases, with embedded finance seen as a value-add. Those providers must ensure the new option helps more than it hurts.
The move to real-time payments is another reason Fiservs want stronger regulations.
“There’s a push to make banks and financial institutions stronger,” Caine said. “Faster payments mean faster access to their money. Having compliance and regulations ensures that they’re not losing any money in the process.
“Really clear rules so they understand where their money’s going and when. All of this is underpinned by a better consumer experience.”
Meaningful friction and enhanced security
When introducing meaningful friction to improve security, Caine said the validation experience can be enhanced as better data contributes to a robust digital identity
“How do we ensure that we are empowering those in the ecosystem with the right data to make the right decisions about who is actually holding the phone and transferring or accepting money?” She asked. “There’s more innovation that can be done when it comes to data and identity.
“There are lots of players that have entered the market, but how do we get that data to all of the players, from the biggest, who may have legacy infrastructure, to the smallest, who don’t have the large budgets to consume it?”
Caine said everyone is considering how to use compliance as an innovation strategy and how they can use compliance to prepare for where the industry is headed. Expect corporate and venture investment to stream into this area as more view compliance as a differentiator.
Trends in embedded finance and crypto
Who’s embracing embedded finance? Green Dot sees much success with clients who have already integrated with their end customers’ financial lives and earned their trust. Credit Sesame is already associated with financial wellness and accessibility. Their latest addition, Credit Cash, allows them to offer more BaaS, features and products to the customers already viewing them as a financial service
Green Dot’s role with digital assets is focused on money movement and not touching the assets. Make it easier to fund wallets and off-ramp.
“We hope to bring more banking products into those account structures with Crypto.com, and that’s where I see our role in the future,” she concluded. “I don’t see us in the actual asset movement at this point.”