Banks court the ‘missing middle’ with embedded accounting

A Finextra webinar hosted in association with BankiFi examined ways banks can offer embedded accounting, integrated payments, cash management and e-invoicing to mid-sized firms with revenues between £20 million and £500 million. The panel focused on how banks might replace the current mix of systems used by these companies and strengthen day-to-day commercial ties.

Panel participants were Mark Hartley, CEO and founder of BankiFi; Sanela Dulic, head of embedded banking and business development at Nordea; Phoebe Zhou, head of client solutions for global payment solutions at HSBC; with Sharon Kimathi of Finextra moderating. The speakers described a gap between basic business banking products and full treasury systems for large multinationals that leaves mid-sized corporates relying on multiple ERPs, payment aggregators, accounts payable and receivable platforms, and several bank portals.

Panelists argued that the spread of separate tools has reduced banks to the role of a commercially invisible utility for many mid-sized companies. ERP vendors, aggregators and fintech platforms have become the main customer interfaces, taking on payments, invoicing and cash workflows outside banks and handling data that banks previously retained.

The discussion covered specific steps banks could take. Suggestions included embedding accounting functions inside bank platforms, offering payment orchestration that routes and reconciles transactions across rails, streamlining e-invoicing, and consolidating cash management and treasury tasks onto a single dashboard. The panel highlighted the use of APIs and open banking links to pull data from ERPs and third-party platforms into one view, cutting manual reconciliation and easing daily operations for finance teams.

Panelists addressed data-sharing trade-offs. Several pointed out that many mid-sized firms will provide broader financial data when it leads to lower costs, fewer manual steps and faster processing; at the same time, those firms expect clear controls over privacy and transparency about how data is used. Banks that can combine consent frameworks with analytics and targeted product offers were identified as better placed to win more client data.

Regulatory developments were raised as both a challenge and an opportunity. Emerging e-invoicing mandates and initiatives such as VAT in the Digital Age (ViDA) will change how invoice and tax data move across borders and systems. The speakers suggested banks could help clients meet new reporting rules by integrating e-invoicing and tax services into bank platforms.

The panel also set out practical obstacles. Several banks lack product suites designed for multi-entity mid-sized businesses that maintain multiple banking relationships and operate across several payment rails. Delivering an integrated experience will require investment in technology, partnerships with ERP vendors and fintechs, and adjustments to sales and client service models so banks can sell and support embedded accounting and payment services at scale.

Speakers listed expected client benefits if banks implement these approaches: faster reconciliation, lower operational costs, automated tax and compliance handling, and clearer liquidity visibility. The webinar concluded with a call for banks to revise product road maps and commercial approaches for mid-sized corporates, and to combine APIs, open banking, payment orchestration and compliance services into integrated platforms while preserving customer control of data.