Building Embedded Fintech Solutions: A Conversation with Keri Gohman, CEO of CARET

Embedded Partners

Welcome to the SMB Tech Innovators podcast, powered by Gusto, where we explore the intersection of financial services and vertical SaaS strategy and discuss how software combats the rising complexity of running a business. We aim to share stories, advice, and best practices from the leaders and investors behind today’s cutting-edge platforms. In this episode, Keri Gohman, Chief Executive Officer at CARET, discusses specific use cases for embedded fintech solutions and why there is still so much opportunity for massive growth in the legal industry.

Highlights include:

  • How is CARET different from other practice management solutions?
  • The role embedded fintech solutions play for business management within law firms.
  • How to talk to an organization in its early stages about the opportunities of embedded Fintech.
  • Why you should start marketing new features as they get added to your platform.
  • Horizontal versus vertical solutions.
  • How will AI affect small and medium-sized businesses in the future?

Embedded Fintech Solutions in Business and Legal Platforms

Technology has permanently transformed industries, and legal technology, in particular, has profoundly affected the practice of law. Instead of law books, there are now online databases. Instead of paper copies, there are digital contracts. Managing clients from your smartphone is normalized. Legal technology has redefined law, bringing efficiencies and simplification to everyday tasks.

Small and mid-sized businesses, including law practices, must determine their position within the platform landscape and the critical role of embedded solutions in enhancing user experiences. In this SMB Tech Innovators Podcast episode, Brian Busch interviews Keri Gohman, CEO of CARET, a practice management solution specializing in serving small and medium-sized law firms. They discuss the role of embedded fintech solutions in business platforms.

The Journey to Embedded Fintech

Keri provides valuable insights into her diverse background, which includes traditional financial services, Fintech, and B2B SaaS platforms. She shares her experiences working at companies like GE, Capital One, Intuit, Xero, and Bain Capital Ventures, highlighting her extensive knowledge of embedded Fintech from multiple perspectives and how it shapes CARET’s solution.

CARET’s Integrated Practice Management Approach

CARET’s main focus is to simplify the operations of small to midsize law firms by providing comprehensive solutions that cover back-office, middle-office, and front-office functionalities. The challenges that law firms face when it comes to adopting technology and how CARET aims to revolutionize efficiency within the legal vertical by introducing embedded Fintech solutions start with payments.

Navigating Challenges and Opportunities in Embedded Fintech

The challenges and opportunities related to embedded Fintech are the key factors influencing successful integration. Keri highlights the importance of maintaining a platform of record, user gravitation, and strategic alignment while offering embedded fintech solutions. She stresses the significance of product motions, sales strategies, and data leverage to enhance user experiences and fully utilize the potential of embedded Fintech.

Transformative Power of Data in Financial Products

Keri emphasized the importance of data in shaping financial products and how it can enhance their effectiveness. She explained how detailed data about businesses, such as law firms, can help create insurance offerings to suit their specific needs. Keri also highlighted the significance of gaining insights from a robust system of record, which provides unique perspectives beyond standard data access.

  • Enhancing Products: Financial products are mainly driven by data; insightful information can transform and strengthen embedded fintech solutions. Having unique data about a law firm and its employees can help in tailoring insurance offerings in innovative ways, making the product more powerful.
  • Generating Data: A robust system of record allows the generation of unique insights beyond conventional queries or available data. The combination of different financial data enriches this system, paving the way for AI-driven insights. Keri emphasizes the potential of AI in providing answers to unasked questions, using the example of processing payroll for a law firm.

Horizontal vs. Vertical Services in the Fintech Landscape

The conversation then turned to the relationship between horizontal and vertical solutions in the Fintech industry. Based on her experience, she emphasized the shift from positioning platforms as the center of operations to integrating them within existing ecosystems. Keri explained that offering services where users naturally do business is essential, advocating for embedded solutions that seamlessly blend into daily workflows.

  • Embedded vs. Platform: Keri reflects on her experience at Capital One, where they took a horizontal approach to integrate various financial components. However, this strategy proved less effective than embedding into ecosystems where small business owners naturally operate.
  • The Shift to Vertical Solutions: She highlighted the current trend of businesses seeking comprehensive, vertical solutions. She shared examples of companies like Column Tax embedding into platforms like Propel or MoneyLion, aligning with the places businesses use daily. She suggested that this approach makes solutions faster, easier, and more user-friendly.

Evolution of Fintech and the Promise of AI

The podcast explored the changes that have taken place in the Fintech industry over the past decade. The industry has moved away from multiple-point solutions to integrated platforms. There is a trend towards bundled, vertical solutions catering to specific business sectors. Keri also emphasized the potential of AI in revolutionizing technology. AI can enhance user experiences, automate tasks such as document drafting in legal firms, and provide deeper insights into data.

AI and the Unbundling-Rebundling Continuum: Two Key Developments

  • Rebundling Simplicity: Keri noted a recent trend where businesses opt for consolidated platforms offering a bundle of solutions. This rebundling presents an exciting opportunity as it reflects a desire for simplicity, efficiency, and ease of use for business owners and marks a significant shift from the earlier era of using multiple-point solutions.
  • AI’s Transformative Potential: Keri believes that AI can significantly transform technology, especially by making it more user-friendly and easy to use. She points out that AI is now more accessible through developer platforms such as Microsoft Stack and Google Stack, which can improve the effectiveness of existing solutions. AI’s ability to automate repetitive tasks and provide valuable insights makes it a driving force in the evolution of Fintech.

Contributions of AI to Embedded Fintech Solutions

  • AI’s Impact on Usability: Keri explains that the effectiveness of solutions is improved more when AI works together with humans rather than being integrated alone. For example, in legal applications, AI functions as a “copilot” in automating document drafting, which makes repetitive tasks more accessible and efficient.
  • Data Advantage Reinforcement: AI’s overlay can accelerate user activities, improving the overall user experience, reinforcing the data advantage, and transforming the user experience for software and SaaS applications.

The Future of Embedded Fintech Solutions

Keri Gohman’s insights provide valuable information on the evolving dynamics of embedded fintech solutions. She believes that integrated solutions, enhanced user experiences, and the crucial role of data-driven insights will characterize the future of Fintech. Her observations point towards a future where embedded services and AI will significantly reshape the industry, bringing about tailored, efficient, and user-centric financial technologies.

Listen to Using embedded Fintech to modernize the entire legal industry with Keri Gohman podcast.

Learn more about CARET and connect with Keri on LinkedIn.

Brian Busch Brian is currently Head of Marketing at Gusto Embedded; the only payroll API with 10 years of experience and actionable data behind it. Before joining Gusto, Brian held leadership positions at Cloud Elements, Kapost, and Captricity. He holds a BS in finance and a BA in philosophy from Boston College and an MBA from the Cal Berkeley Haas School of Business.
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