Case: How Traditional Retail Banking Is Decoupling? Why Inbank Is Winning?
Priit Põldoja - Founder and CEO at Inbank
Inbank, an Estonian embedded lender with a European banking license since 2015, focuses on digitally integrated consumer finance through over 6,000 partner channels across Estonia, Latvia, Lithuania, Poland, and Czech Republic. Utilizing modular credit underwriting and simplified customer applications, they achieve 90% automated decisions and serve around one million active contracts with €1.2 billion portfolio, originating €700 million annually. Competing successfully with traditional banks by disintermediating customer journeys and leveraging cross-border fintech alliances like Raisin, Inbank aims to scale embedded finance despite regulatory complexities across markets.
"Markets don't appreciate old traditional banking models and therefore they are ripe for disruption because other entities can raise money at better valuations. New players can displace large banking groups by focusing on innovation, digitization, and customer-centric solutions."
Summary
- Inbank, an Estonian embedded lender, leverages partnerships for consumer finance, operating in 5 countries with ~1 million active contracts and €1.2B portfolio. - Traditional banks face challenges: legacy tech, rigid structures, heavy regulation, and losing market share to digital originators focused on distribution. - Inbank focuses on high-ticket B2B2C lending, multi-channel access, modular underwriting, and streamlined applications for fast credit decisions. - Consumer finance market share is shifting from universal banks to digital specialists; inbank has grown from 10% to 20% market share in Estonia since 2015. - Key growth strategy: integrate lending solutions into partner platforms (e.g., car classifieds), simplify credit processes, and aim to crack cross-border embedded finance market.
Article
How Inbank is winning the battle against traditional banking giants
Estonian fintech disrupts consumer finance market with innovative embedded lending
In a compelling presentation at the Nordic Fintech Summit, Priit Põldoja, founder and CEO of Estonian fintech Inbank, revealed how his company is successfully challenging established banking giants in the consumer finance sector through its embedded lending model.
Speaking at the event held on 14 May 2025, Põldoja shared insights from Inbank's journey since obtaining its European banking license in 2015, demonstrating how specialised financial players can effectively compete with dominant traditional banks.
The decline of traditional banking models
Põldoja highlighted data from McKinsey's Global Banking Survey showing that traditional banking models are underperforming. While some banks have begun to recover value, many continue to trade below book value due to capital-intensive operations and heavy regulation.
"New players can actually displace large banking groups by focusing on digital distribution and being close to the customer, winning market share from traditional banks," Põldoja explained.
The research revealed that non-depository financial institutions, payment providers and alternative lenders are significantly outperforming traditional banks in market valuations, indicating investor preference for innovative financial models.
The embedded lending advantage
At the heart of Inbank's success is its embedded lending model, which integrates financing directly into the customer journey at the point of sale. Operating across Estonia, Latvia, Lithuania, Poland and the Czech Republic, Inbank partners with over 6,000 retailers, e-commerce sites and service providers.
"Our strategy is to build simple, fully automated lending solutions integrated directly into partners' customer journeys, disintermediating traditional banks," said Põldoja.
This approach has yielded impressive results. Since launching with a banking license in 2015, Inbank has grown from 10% to 20% market share in Estonia's consumer finance sector, now nearly matching Swedbank despite the latter's much larger overall customer base.
Why traditional banks struggle to compete
According to Põldoja, traditional banks face numerous structural disadvantages beyond just legacy technology:
"They have very vertical, enclosed origination, credit underwriting, and onboarding processes. They're heavily regulated and have a clear tendency to only do things within their own infrastructure," he observed.
In contrast, Inbank operates with a more agile organisational structure, where credit underwriting falls under the technology team and legal works alongside product development. This integration allows for faster innovation and adaptation.
"Being focused on what you do tends to make you do it better; this focus is why large banks are losing market share to specialized players," Põldoja noted.
The digital infrastructure advantage
Estonia's early adoption of digital ID provided fertile ground for Inbank's growth, allowing it to implement fully digital processes from origination to signing as early as 2012. Combined with advances in open banking and increased data availability, this has enabled Inbank to make better credit decisions more efficiently.
A key competitive edge is Inbank's emphasis on simplicity. Põldoja illustrated this with an example from Poland, where Inbank's application requires just six fields compared to competitors requiring sixteen to forty-eight fields.
"We aim to become an embedded finance platform by offering simple applications, automated credit decisions, and flexible products tailored to partners and customers alike," he said.
Success through partnerships
Inbank's transformative approach is particularly evident in its car financing partnerships. By integrating with leading car classified platforms across multiple countries, the company has helped these platforms evolve from purely advertising businesses to financial service providers.
"Originators and distributors who stay close to customers get bigger revenues and can earn those revenues without engaging their own balance sheet," Põldoja explained, noting that these classified platforms now derive approximately 25% of their revenue from financial services through partnerships with Inbank.
With approximately one million active contracts, a €1.2 billion portfolio, and annual origination of €700 million, Inbank has achieved significant scale despite focusing primarily on smaller markets. The company achieves 90% automated decisions in its lending processes.
Challenges of cross-border expansion
Despite its success, Põldoja acknowledged the challenges of cross-border expansion. While about 90% of Inbank's technology solution transfers between markets, local regulatory requirements and digital infrastructure differences make full standardisation difficult.
"Anyone working to crack cross-border knows you think you can build one tech solution and roll out to another market, but local regulators always add additional requirements," he noted.
Nevertheless, Inbank remains committed to expanding its embedded finance model across European markets, confident that its focus on digital integration at the point of sale will continue to disrupt traditional consumer finance.
Part of Nordic Fintech Summit