Q2’s Helix embedded-finance solution expands its BaaS offerings to retail brands

The news: Q2 is enhancing its lineup with embedded-finance product Helix, which lets fintechs, consumer brands, and tech companies offer banking services to their customers. The new solution, part of the company’s banking-as-a-service (BaaS) platform, is a cloud-native core and includes multiple partner banks as sponsors.

More on this: Companies can use Helix to offer what Q2 calls “the building blocks of banking,” such as:

• Cards and payments
• Accounts
• Monetization solutions
• Administrative tools

The BaaS provider numbers fintechs Acorns and Betterment as among its clients.

What does it do?: Q2 stresses that Helix is designed to help companies offer personalized banking products to their own customers.

• The provider notes that Helix can be paired with existing insights to assemble banking products, and that it helps companies use “context they have about users to define protocols such as limits, features, and controls at a per-customer level.”
• The personalization component, in turn, is designed to help these companies drive engagement and to contain fraud risk.

The BaaS provider says that Helix’s personalization can scale to larger user bases, and that its cloud architecture reduces the cost of serving users’ accounts, compared with traditional cores.

The opportunity: Q2 helps Helix stand out in the BaaS space by positioning itself as a provider for banks and non-banks alike. That lets it tap into growth spaces that may prove lucrative:

• Revenue from the broader embedded-finance space in the US is projected to skyrocket, per Lightyear Capital, going from $22.5 billion in 2020 to almost $230 billion in 2025, or 922%.
• Helix could attract brands looking to boost their performance through greater customer personalization. A 2021 Acquia survey of marketers found that greater personalization yielded higher brand engagement (54%) and increased conversions (48%).
• Consumer-side demand for personalization is high: A 2021 report from Data Axle and SurveyMonkey shows that overwhelming majorities of four generations studied want more personalization from brands that they’re already loyal to. This was particularly true for Gen Z (87%) and Millennials (88%).