The Tool Desk
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What finance as a service can mean
The phrase is a business label used for different kinds of offerings. The key distinction is whether a provider is handling a company’s internal finance work, supplying finance technology to a financial institution, or helping a nonfinancial business offer financial products to its customers.
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Managed finance operations
KPMG uses FaaS for a managed delivery model that combines finance staff, technology, and ongoing operations management. Its described scope connects transactional work—such as inventory management, invoice tracking, revenue collections, and contract management—to financial close and financial planning and analysis (FP&A). The model is for organizations seeking finance capabilities through a managed service rather than building every role, process, and technology capability in-house. KPMG describes its offering as “an enhanced service delivery model that gives companies rapid access to highly skilled talent and leading-edge technologies.” KPMG’s Finance as a Service page
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Finance software and services for financial institutions
SAP Fioneer also uses “Finance as a Service,” but for offerings aimed at financial institutions. Its described activities include financial management, reporting, analytics, reconciliation, consolidation, compliance, and daily profit-and-loss processes. That is not automatically the same scope as outsourcing a nonfinancial company’s accounting department. SAP Fioneer’s Finance as a Service page
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Embedded finance and Banking as a Service
In fintech, FaaS may be used near the terms “embedded finance” and “Banking as a Service” (BaaS). Embedded finance means offering a financial product—such as a payment, loan, or insurance—in a nonfinancial company’s broader product or customer journey. BaaS describes a related supply model in which financial institutions provide bundled services that nonbanks can use, often through APIs and partner arrangements. The roles and risks of the bank and distribution partner therefore matter. McKinsey’s explanation of Banking as a Service
SAP Fioneer announced an “Embedded Finance-as-a-Service” platform in 2023 for connecting SAP users and financial institutions. Announced use cases included Buy Now, Pay Later, Request to Pay, purchase-order finance, and invoice finance. This announcement describes workflow-embedded financial infrastructure, not outsourced accounting; it does not by itself establish current product availability, performance, or geographic coverage. SAP Fioneer’s announcement
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How to tell which meaning a provider intends
Ask what work or product the service actually delivers, rather than relying on the FaaS label.
- Internal finance operations: Does the provider take responsibility for transaction processing, close activities, controls, reporting, or FP&A?
- Institutional finance technology: Is the customer a bank or other financial institution using software for its own financial management and reporting?
- Customer-facing embedded finance: Which financial product is offered, by which institution, through which platform, and at what point in the customer’s workflow?
The distinction is practical: an outsourced finance team supports the company’s own accounting and planning, while embedded-finance infrastructure helps a business offer financial products as part of its own customer experience.
What to compare before choosing a service
The right evaluation depends on which of the models is in view. The following criteria are decision questions inferred from the functions and roles described by the providers and McKinsey; they are not a universal FaaS standard.
For managed finance operations
- Scope: Which transaction processes, close tasks, controls, and FP&A responsibilities are included, and which remain with your team?
- Accountability: Who owns control design, compliance responsibilities, approvals, and issue resolution?
- Systems and data: How will the service connect to existing finance systems, and how will data quality and access be managed?
- People and continuity: What expertise is assigned, how is coverage maintained, and what happens during staff changes or service interruptions?
- Delivery and exit: What implementation work is required, how often will results be reported, and how can the arrangement be transitioned or ended?
KPMG’s description illustrates a broad connected scope, but it does not establish that every provider calling its service FaaS includes all of those functions. KPMG’s service description
For embedded finance or BaaS
- Product and geography: Does the offering fit the financial product and markets you intend to serve?
- Partner roles: Which institution provides the financial product, and which party manages the platform, customer relationship, and day-to-day support?
- Integration: Can APIs and workflow connections support the intended customer experience and operational processes?
- Risk and compliance: How will the parties manage partner oversight, risk, and compliance responsibilities?
- Customer relationship and commercial terms: Who owns the customer relationship and branding, and how are the economics structured?
McKinsey notes that BaaS distribution through APIs requires banks to manage risks and compliance associated with embedded-finance partners. McKinsey on Banking as a Service
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What the available figures do—and do not—show
KPMG’s 2025 page presents the following outcomes as results it says it has seen in research and client work. They are provider-reported claims, not independent benchmarks or guaranteed results for a buyer:
- 50% improvement in productivity.
- 25%+ improvement in working capital.
- 100% controls compliance.
- 70% improvement in accounting productivity.
- 50% more accurate forecasts.
- 5X faster planning cycles.
McKinsey’s 2024 U.S. banking strategy article says its research determined that embedded finance in the United States was worth $20 billion. That figure is specific to the U.S. context described in the article, not a global valuation. McKinsey’s 2024 article on embedded finance
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