As technology reshapes the financial landscape, independent software vendors (ISVs) have emerged as vital players in helping small and medium-sized businesses (SMBs) manage their operations. ISVs are no longer just technology providers, they’re becoming the preferred channel for SMBs seeking comprehensive solutions, with payments as a key feature. This evolution presents a significant opportunity for banks to leverage their strengths and offer differentiated value to ISVs.
SMBs increasingly rely on ISVs to simplify their operations, and a significant portion—82% globally—feel overlooked by traditional banks. This dissatisfaction has driven many SMBs to prefer embedded financial solutions offered through their software platforms or marketplaces, which are often more tailored to their needs.
ISVs typically adopt one of three approaches to integrate payments:
These approaches simplify SMB workflows and address pain points such as managing multiple financial systems. With 76% of SMBs globally willing to pay more for a one-stop-shop solution, ISVs have become a focal point for innovation in payments and beyond.
As an ISV moves away from a referral model and to a more embedded option - ISVs often must make a hard choice between modern, expensive payment providers or those that have legacy systems and an unfriendly UI experience:
While these models meet some needs, they leave gaps in integration depth, scalability, and support—areas where banks are uniquely positioned to excel.
Banks have been slow to engage with ISVs in this space, but they hold a unique position to provide differentiated value. Unlike newer players, banks possess established infrastructure, trusted relationships, and the ability to scale beyond payments into other areas of embedded finance.
Key bank advantages include:
To fully capitalize on the growing ISV market, banks need to evolve their approach and provide more than just basic financial infrastructure. Here’s how they can build meaningful partnerships with ISVs:
One of the biggest challenges faced by banks and merchant acquirers today is integrating the technological solutions that businesses, customers and consumers increasingly demand. Plugging Integrated Software Vendors into existing systems while minimising disruption is key in an era when user-experience is everything. Poorly managed integration can mean inefficiencies, increased development costs and a poor front end experience.
Pollinate’s experience-as-a-service (EaaS) solution delivers tech integration for banks and merchant acquirers that goes beyond simply plugging off-the-shelf ISVs into existing systems. Our suite of apps and components allow banks and merchant acquirers to design bespoke solutions around individual needs and seamless customer experiences.
With a focus on ease of use and an elegant front-end, Pollinate’s EaaS platform is designed to help banks and merchant acquirers deliver intelligent, integrated technology solutions at high speed and low cost. As customer expectations continue to respond to emerging technologies and in an increasingly crowded ISV market, the Pollinate platform is helping banks and merchant acquirers rise to the digital challenge.
Recent years have seen fintechs lead on the delivery of embedded finance, stealing market share from the banking sector. The potential to form lasting and productive relationships with ISVs however represents a huge opportunity for banks to take back this market by delivering not just embedded finance, but also core banking products such as lending, treasury and demand deposit accounts.
Poorly managed ISV integration however could mean wasted investment and poor user experiences. Pollinate’s focus on EaaS is designed to ensure ISV integration is seamless. With consultative support, collaborative ecosystems and strategic partnership, Pollinate is helping banks leverage their natural advantages including trust and core products, while also competing with fintech on the delivery of UX and embedded finance. Our extensive library of apps and components helps bridge the gap between legacy banking infrastructure and the capabilities of ISVs.
By embracing and successfully integrating innovative technologies and partnership models, banks can redefine their role in the financial ecosystem, and reclaim leadership in a rapidly evolving embedded financial services landscape. ISVs meanwhile can harness these partnerships to deliver greater value to SMBs while unlocking new revenue streams. Digital competition is intensifying but, with the right tools and the right integration, banks are well positioned to combine the digital experience the twenty-first century demands and the trust and products that secured their dominance in the twentieth century.
