UniCredit’s acquisition of Vodeno and Aion Bank marks a significant milestone in the evolution of embedded finance, signaling a shift in how traditional banks approach financial technology. This move by a major European bank underscores the growing importance of Banking-as-a-Service (BaaS) platforms and highlights the strategic value of controlling such technologies in-house.
The deal brings UniCredit a suite of embedded finance products, including payments, accounts, and lending services. More importantly, it transfers 200 skilled professionals and Vodeno’s cloud-native core banking system to UniCredit, providing the bank with direct control over innovative financial technology.
This acquisition reflects a broader trend where large financial institutions are moving beyond being mere service partners to become providers of comprehensive, best-of-breed products that cover the entire embedded finance life cycle. By bringing Vodeno’s technology in-house, UniCredit positions itself to offer more tailored and integrated financial solutions to its clients, potentially strengthening customer relationships and enhancing its competitive edge.
The move also illustrates the banking sector’s response to the challenge posed by fintech companies. Rather than relying solely on external vendors, banks like UniCredit are opting to control key technological platforms directly. This strategy allows them to retain client intimacy, ensure relationship resiliency, and have greater flexibility in product development and deployment.
Furthermore, bank-controlled embedded finance platforms offer opportunities for financial institutions to innovate in how they combine and offer their products. This could lead to more sophisticated decision-support systems for treasury and finance teams, and optimization of enterprise financial supply chains.
So What?
As embedded finance continues to grow in importance, more traditional banks may follow UniCredit’s lead, seeking to acquire or develop their own BaaS capabilities to maintain relevance and competitiveness in an increasingly digital financial landscape.
An alternative to this ‘make/buy’ option is for banks to partner with embedded finance orchestration infrastructure vendors, e.g., Weavr, Toqio, Treasury Prime. These middleware platforms combine various financial and associated products within a one-stop-shop framework. By doing so, the intermediaries streamline the integration process, replacing the need for multiple individual integrations with only one integration to their platform. Their main value is the single access point to the variety of services and, if needed, saving on front-end development as well.
