Three regional banks, three different layers of the financial stack

Major regional banks are shifting focus, and for retailers, the most important takeaway is the rise of 'embedded finance.' Historically, banks like Citizens, Truist, and KeyBank tried to be everything to everyone. Now, they are specializing in different parts of the tech stack to better support point-of-sale (POS) lending and merchant services. This structural change means these banks are becoming tech-first partners rather than just passive lenders. Citizens is leading the charge by focusing on the consumer layer. They are aggressively pursuing embedded finance, where they white-label financing products for big-name retailers like Apple. This allows merchants to offer branded financing without building a bank themselves. Meanwhile, Truist is focusing on mid-market reliability and KeyBank is leaning into specialized vertical expertise. For a retail operator, this shift is good news. It indicates that credit for consumer loans is becoming more deeply integrated into the checkout experience. Banks are no longer just waiting for customers to apply for credit cards at a branch. They are competing to be the technology that powers your 'Buy Now, Pay Later' (BNPL) or monthly payment options at the point of sale. As these banks modernize, expect more seamless integrations and higher approval rates through automated, real-time credit decisioning tools.

Source: Tearsheet

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