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Banking & Finance

Live Oak Bank Grows With First Embedded Banking Partnership

By Audrey Elsberry, posted Jun 5, 2024
Live Oak Bank (the bank's Wilmington campus is pictured above) recently announced a partnership with AI-powered Anatomy Financial in which Live Oak's savings and checking accounts will be integrated into Anatomy's software. (File photo)
In a new partnership announced Monday, Live Oak Bank checking and saving accounts are being embedded in a health care finance application to help medical small business owners, said Live Oak’s Head of Embedded Banking Jake Tupa.
 
Anatomy Financial is an AI financial solution company based in San Francisco. The software organizes and bundles health care companies’ claims, payments from patients and insurance companies and other accounting data to help medical small business owners ensure their services are being paid for accurately. Live Oak's partnership with Anatomy combines the health care company’s data tracking with Live Oak’s checking and savings accounts.
 
The term embedded banking refers to integrating banking services, in this case Live Oak’s business checking and saving accounts, into third-party platforms.
 
Tupa pointed to embedded products for consumers like Venmo. Small business owners need integrated financial products like that for their businesses, he said. Efficiency and innovation are key.
 
Live Oak recently rolled out checking accounts for small businesses, first broached in the bank’s third-quarter earnings call in October. The specific services provided in the Anatomy deal are exclusive to Anatomy customers, Tupa said.
 
“This product with Anatomy has features that are really specific to the Anatomy software,” he said.

Live Oak executives also introduced the prospect of embedded banking in the same earnings call back in October, Live Oak President BJ Losch said the bank was learning a lot from the partnership. 
 
The process of integrating Live Oak’s technology into other software systems began in 2017, Tupa said, when Live Oak invested in Finxact. Cloud-based technology was becoming the standard across industries, but banks were used to using “brittle” technology, Tupa said, so Live Oak officials wanted to build a solution.
 
By investing in Finxact and using its technology that allows its fintech companies to connect different software systems and integrate, Live Oak built the foundation for the new partnership with Anatomy.
 
“We've been building software internally on top of that core, to allow third-party software companies to offer Live Oak banking products directly to customers,” Tupa said. 
 
“By partnering with Live Oak Bank, we can offer unprecedented financial clarity to health care organizations of all sizes,” said Sasha King, co-founder and co-CEO of Anatomy. "We are thrilled to work with a group that shares our passion for customer centricity and innovation.”
 
Callum King is Sasha King’s counterpart in Anatomy’s leadership. The husband and wife team have experience in fintech and health care: Sasha King was formerly the chief commercial officer at CareDx, and Callum King was a co-founder of Brightside, a fintech for employers.
 
Live Oak’s first embedded banking partner was an important choice, Tupa said. Officials wanted a partner who knew the space well, had a shared mission and had aligned goals. The two companies met for the first time in 2023, he said, and both companies found they aim to make small business owners’ lives easier.
 
Of Live Oak’s 40 different customer verticals, they have a strong group of health care customers throughout the medical, dental and other health care-related industries, Tupa said. Live Oak recently hosted an event on its campus that combined its customers with those of Anatomy’s to introduce the partnership, he said.
 
He expects the product to launch its pilot program in the next quarter.
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