Vertical SaaS Holds the Real-Time Data Advantage — and the Financial Upside That Comes With It

For a century, financial power concentrated in institutions that held balance sheets. The assumption was simple: whoever held the money held the advantage. But this logic depended on something deeper — banks also held the information. They saw cash flows before accountants, repayment behaviour before regulators, and risk before most businesses could interpret it themselves.

That asymmetry is now broken. Regulatory data paints a consistent picture of how credit is evaluated in Europe. SMEs continue to rely on banks for most of their external financing, and credit assessments are shaped by collateral requirements, financial statements, credit histories, and a firm’s perceived creditworthiness. These are the factors regulators usually collect data on and that banks describe in their public disclosures.

Vertical SaaS platforms, meanwhile, record the world continuously. Restaurant systems like Toast track cover counts, menu-level margins, and hourly volatility. Shopify watches SKU-level acceleration and conversion behaviour in real time. Field services platforms like ServiceTitan follow technician productivity and job success ratios as they happen. Logistics and supply-chain platforms track route density, idle time, and delay predictors minute by minute.

The result is a structural inversion: banks hold capital, but SaaS now holds the real-time truth. And in modern finance, the truth is slowly becoming more valuable than the capital.

Why Real-Time Operational Data Outperforms Traditional Banking Models

The leading indicators of economic performance no longer live inside financial statements. They live inside the operational telemetry of the business itself. That telemetry is what vertical SaaS captures at high granularity.

A restaurant management system sees the early signs of revenue contraction – declining reservation-to-seated conversion, shrinking Friday night peaks – days before cash flow reflects it. A retail platform sees demand shifts hours after a trend emerges. A contractor management tool detects capacity stress long before invoices show delayed payments.

These aren’t theoretical claims. Shopify Capital, now having deployed more than five billion dollars, underwrites using commerce data from merchants’ sales and performance on Shopify’s platform rather than relying only on traditional financial statements. Toast reports that customers using more deeply integrated products – including payments and partner integrations – generate over 30% higher ARPU and lower churn than customers without those integrations, and Toast Capital has become a meaningful contributor to its fintech gross profit. Platforms like ServiceTitan embed customer financing directly into the workflow of jobs and technicians, and partners report higher ticket sizes and faster growth when financing is offered at the point of sale – all inside systems that already track job completion, ticket values, and technician performance.

When risk becomes visible upstream of financial statements, the power to allocate capital moves upstream as well.

Finance Is Migrating to the Platforms That Understand Businesses Best

This migration is measurable. Allied Market Research estimates that the embedded finance market was about $82.7 billion in 2023 and could reach roughly $571 billion by 2033 – a compound annual growth rate of just over 21% – with Europe accounting for the largest share of revenue in 2023. Other industry estimates project double-digit annual growth for embedded finance in Europe through 2030. In US data, the Federal Reserve’s Small Business Credit Survey and related briefs describe nonbank online lenders as a small but growing channel for small-business credit, particularly for smaller loan sizes.

The reason is simple: finance is following the data. And the data now lives inside vertical SaaS.

This shift is not driven by convenience or UX. It’s driven by epistemics. Embedded financial products behave better because they are built on better information. Liquidity is offered at the right moment because the platform sees friction the instant it emerges. Risk is priced more accurately because the platform sees the causes, not just the symptoms, of business performance. And businesses trust the software that sees them, not the bank that interprets them through quarterly PDFs.

When a SaaS platform becomes the operating system of an industry, financial services stop being “extras.” They become the natural consequences of understanding that industry more deeply than any traditional financial institution can.

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Why SaaS Should Become Banks Without Ever Becoming Banks

This is where the real strategic shift lies. Vertical SaaS is not merely capable of banking. It is increasingly responsible for it, because it possesses the only information that can make finance fair, fast, and accurately priced.

And yet SaaS companies do not need to become regulated banks. The regulatory and capital-heavy elements of banking can be abstracted through BaaS providers, sponsor banks, and modern financial infrastructure. What SaaS must own is the intellectual core of finance: the understanding of customer behaviour, risk patterns, operational momentum, and the timing of liquidity needs.

If a SaaS platform sees the truth of a business before any bank does, failing to provide liquidity doesn’t preserve neutrality — it simply leaves value on the table for someone else to capture. And the value left on the table is not merely financial. When a platform begins translating behavioural data into financial products, several outcomes follow naturally.

The first is precision. Capital placed at the exact moment of operational need behaves fundamentally differently. It produces lower defaults, faster payback cycles, and a smoother revenue profile for both the end customer and the platform providing the service. The platform becomes the actor that reduces turbulence in the entire vertical — not because it is a lender, but because it understands the tempo of the industry.

The second is defensibility. Once a SaaS platform becomes the place where liquidity originates, the switching cost for customers changes category entirely. Vendors are no longer abandoning only software; they are abandoning the infrastructure that keeps their business financed. The relationship stops being transactional and becomes structural, anchored in the daily physics of their operations. This is not “stickiness” in the marketing sense. It is a dependency created by informational accuracy.

The third is informational compounding. Every financial event — every repayment, advance, acceleration, slowdown, and deviation — becomes new telemetry feeding back into the model. The platform learns not only how the industry behaves, but how capital behaves inside that industry. Banks cannot generate this loop because they do not see the micro-patterns. SaaS platforms can, and each cycle makes their behavioural models sharper. Over time, this informational compounding becomes the real moat.

The fourth is revenue transformation. Financial services do not merely increase ARPU; they change the contour of platform economics. Rather than relying solely on subscription or workflow revenue, the platform begins capturing value from the velocity of the industry itself. The business stops scaling linearly with seats or usage and begins scaling with the economic activity of the entire vertical. This is why platforms that embed finance often show more resilience in downturns: they monetize operational reality, not discretionary software budgets.

When platforms like Shopify, Wolt, Toast, and ServiceTitan extend credit to SMEs without holding deposits or bank charters, they are not simply “adding fintech” as an extra. They are turning their deeper operational visibility into financial products.

Vertical SaaS companies should become the banks of their industries not because it expands ARPU or reduces churn — though it does both — but because they are the only entities structurally positioned to allocate liquidity with precision. Banks provide the rails. SaaS provides the understanding. And understanding is where financial power will sit.

We are entering a financial landscape in which capital is no longer allocated solely by institutions that hold money, but by systems that hold models of how businesses behave. Banks will continue to operate the regulated infrastructure layer. But the intelligence layer — the place where financial decisions originate — is moving into vertical SaaS.

And that means the most important shift in the next decade is already underway: the power to finance has decoupled from the institutions that hold capital and is now following the platforms that hold real-time truth.

Those platforms are vertical SaaS. And the question is no longer whether they can step into finance — but whether they recognise that they already have.