Taxonomy
Non financial provider distribution
Use this page when the supplier is not a financial company. Something built outside financial services reaches financial customers, and it reaches them through a bank or a fintech rather than directly.
Definition
A company that is not in financial services supplies a capability. A financial company builds that capability into something it sells, and its own customers use it. The provider reaches those customers, and it reaches them through the financial company, holding no relationship with them itself.
The capability itself is usually not a financial one. A model, a detection service, a delivery network. What makes the arrangement a distribution arrangement is not what the capability is, but where it ends up.
Two questions, both of which have to be answered yes. Is the provider outside financial services? Does the capability leave the financial partner and reach an end customer? The first separates this from infrastructure distribution. The second separates it from a technology purchase.
What it looks like
A payments company and an AI company build a financial crimes agent together, and the payments company makes it available to banks. A card network pairs its agent protocol with a security firm's bot detection and offers the result to merchants. A market data company gives its customers agent building inside a cloud vendor's environment.
In each one the capability starts outside financial services and reaches financial customers through a financial company. That direction is what makes it this type rather than infrastructure distribution, which requires a financial company on both sides.
How it differs
| Type | The question it turns on | Answer here |
|---|---|---|
| Infrastructure distribution | Is the provider a financial company? | No. That is the only difference between the two. |
| Technology vendor | Is the thing bought consumed inside the company that bought it? | No. It reaches that company's customers. |
| Embedded finance placement | Which way is the movement? | The other way. There a financial product sits inside a non financial company's flow. Here a non financial capability reaches customers through a financial company. |
Against infrastructure distribution
These two types describe one movement and differ on one fact. A capability is supplied, a partner builds on it, and the partner's customers use the result. Infrastructure distribution is that arrangement between two financial companies. This is that arrangement when the supplier is not one.
The distinction is worth a separate type because the two behave differently. A financial provider is regulated, is usually selling only into financial services, and competes with other financial providers. A provider from outside is doing none of those things, and the financial partner is one channel among many that have nothing to do with finance. Counting them as one type would hide which of those two is growing.
Where the provider is a financial company, the arrangement is infrastructure distribution. That is the more precise fact and it takes precedence.
Against technology vendor
This is the boundary that decides whether the arrangement is counted at all, and it is the same test infrastructure distribution turns on.
A bank that licences models and uses them to speed up its own underwriting has bought software. The capability is consumed inside the bank. Nothing reaches a customer, and the arrangement is a technology purchase however large the contract is.
A processor that builds an agent on those same models and then offers the agent to the banks it serves has done something else. The capability has left the processor. That is distribution, and the size of the contract has nothing to do with it.
The same provider is routinely both, to different partners and sometimes to the same partner under separate arrangements. The type is a property of the arrangement, never of the company.
Against embedded finance placement
Both types put a financial company and a non financial company on either side of an arrangement, which is why they are confused. They point in opposite directions.
Embedded placement moves a financial product outward, into a flow that a non financial company owns, where that company's customers meet it. A pay later option at a furniture retailer's checkout.
This type moves a non financial capability inward, into a product the financial company owns, where its customers meet it. A fraud service inside a bank's own offering to its merchants.
Ask whose customers are on the receiving end. If they belong to the non financial company, it is embedded placement. If they belong to the financial company, it is this.
Boundary cases
An AI company and a payments company jointly build a compliance agent, and the payments company makes it available to its bank customers.
Non financial provider distribution. The provider is outside financial services and the agent reaches the payments company's customers. Joint development does not change who supplies what.
A bank deploys the same AI company's models across its own staff and operations.
Technology vendor. The capability is consumed inside the bank. Nothing reaches a customer of the bank.
A bank does both with the same provider, under one announcement.
Two arrangements and two rows. Only the one that reaches customers is counted. An announcement that covers both without separating them establishes neither, and is declined until a source says which is which.
A financial company adopts an open standard that a technology company published.
Neither. Publishing a standard is not supplying a capability to a partner, and adopting one is not an arrangement. Where the announcement additionally describes the provider supplying implementation, support or placement to the partner's customers, that supply is the arrangement and it is classified on what the announcement says about it.
A logistics company delivers cash to a broker's customers on the broker's behalf.
Non financial provider distribution. The capability is not a technology and it is not financial. It is supplied from outside the industry and it reaches the broker's customers, which is the whole test.
A card network's identity data is built into a security company's verification platform and sold to that platform's customers.
Not this type. The movement runs the other way: the financial company is the provider and the non financial company is the distributor. Where what moves is a financial product, that is embedded finance placement. Where it is not, no type currently covers it, and it is declined rather than forced into one.
A trade article reports that a financial company and a technology company have partnered, without saying what either supplies.
No type. A relationship is established and its direction is not. Nothing is recorded until a source says which way the capability moves, because a direction inferred from a headline is indistinguishable on the page from one that was reported.
How it is counted
This is a distribution type. It counts in gap statistics and carries a weight below infrastructure distribution, because a provider from outside the industry sits further from the financial relationship than one inside it.
Where a company has both a technology purchase and a distribution arrangement with the same counterparty, both are recorded and only the second is counted.
Part of the Schwaner and Co. partnership taxonomy. Every partnership published against this type carries the source it was read from and the sentence that established it. See what is recorded against it.