In this episode of The Connector Podcast, host Koen Vanderhoydonk interviews Preet, founder and CEO of InBank, an Estonian‑origin fintech that has become a European‑licensed bank focused on embedded finance. Preet recounts his 30‑year career in banking and fintech, his early work at Daiichi Kangyo Bank, Hansabank, and the founding of InBank in 2011. He explains how InBank’s first breakthrough was a fully automated, in‑shop credit decision and contract completion for hire‑purchase of durable goods, later expanding to online end‑to‑end digital processes and car‑financing platforms. Facing a lack of debt funding in the Baltics, InBank applied for and received a European banking licence in April 2015, primarily to raise retail deposits. The bank has since opened branches in Lithuania, Poland, and Czechia and passported its licence to Germany, the Netherlands, and Austria, while operating a daughter company in Latvia. Preet highlights the operational challenges of scaling across Europe – differing KYC/AML rules, credit‑bureau integrations, and fragmented open‑banking standards – underscoring the need for localisation despite a uniform product. The conversation moves to InBank’s product portfolio: merchant‑point‑of‑sale financing, device‑rental schemes (e.g., Apple products), solar‑panel financing in Poland, and synthetic securitisation using European Investment Bank/Fund structures to free capital and promote green energy. Preet discusses the role of technology, noting that InBank has used machine learning for credit decisions for 15 years, but AI is not yet fully embedded; current AI applications are limited to internal engineering, marketing, and legal workflows, with future aspirations for agentic, on‑demand financing. The interview also covers InBank’s ecosystem strategy: positioning itself as a fintech with a banking licence, collaborating with fintechs, payment service providers, and larger retail banks (e.g., Raisin), and planning upcoming corporate partnerships. Finally, Preet shares the company’s ambition to become a pan‑European embedded‑finance player, cites a network of 6,000 partners, and provides his contact email for partnership inquiries.
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Welcome to the Connector Podcast, an ongoing conversation connecting fintechs, banks, and regulators worldwide. Join CEO and founder Koen Vanderhoydonk as you learn more about the latest available trends and solutions in the markets.
Welcome to another podcast from the Connector, and today I've got a bank with me, InBank, all the way from Estonia. Preet, can you introduce yourself and tell us a bit more about the bank that you founded and you're currently the CEO of?
Well, first of all, thanks for inviting me and InBankCoin. I have actually been about 30 years in banking. How to say, maybe I would like to say that first 15 years I was in banking and now last 15 years I've been more in fintech. I got my first job after I graduated in the United States. At that time, I think it was the largest bank in the world, which was a Japanese bank. They were very big at the time, Daiichi Kangyo Bank in San Francisco. Worked there for a couple of years and then in 1998 moved back to Estonia. Actually, 1996, and things were really happening. And in 1998, I moved to the largest bank in Estonia, which was a startup at the time, Hansabank, and worked my way up. until 2008, I was a CEO of Hansabank, basically the largest universal bank in Estonia. But then it was taken over by Swedbank, one of the larger retail banks in Sweden. Kind of felt like I need to do something else. And obviously then the kind of a financial crisis hit and it was really tough time. especially in our part of the world. We had over-leverage, real estate crisis, but, you know, the crisis actually presented its opportunities. And me and my co-founder—
Like always?
Yes, in the Baltics. And we found kind of consumer finance a major opportunity. Many large banks have kind of taken a risk off and they really were not investing into technology nor the product. And we were Basically looking at this kind of hire purchase as a big opportunity financing kind of purchase of durable goods through merchants. And our kind of killer feature in 2011 was basically a simple application in a shop, automated credit decision and contract completion right there, you know, in a couple of minutes. And no other bank was fully automated at the time. So that's how we got going. Wow.
And that then became InBank as it is today?
Yes, basically, you know, we grew, you know, 4 years with offering basically consumer finance through merchants, kind of launched our car financing product together with one of the largest car classified platforms in Estonia. And today we work with many car classifieds platforms. We were also first to do a fully online end-to-end digital process already in 2012 and overtaking market share. And the key element for us which was missing was funding. You know, Baltics was not like big capital markets at the time. There was no debt funding available. So we were actually lending money or borrowing money from other banks. And so we were also at the same time competing with them. So eventually, you know, kind of the best solution for ourselves was to apply for a banking license itself. And today we, in 2015 April, we received the European banking license to basically main focus is to gather deposits. Actually, that's the only reason we have a banking license.
To manage your balance if you want.
Yeah, we have a funding need and basically retail deposits is how we fund ourselves.
Yeah, and it's good that you mentioned it's a European banking license. Obviously you can passport out of Estonia and this is something that you have already done. So which countries are you? And if I may ask, what have been sort of the lessons learned from scaling your bank across Europe?
Yeah, we have a branch in Lithuania, we have a branch in Poland, we have a branch in Czechia, and we also have passported our license to Germany, Netherlands, and Austria in order to gather deposits through the raising platform. We were probably one of the first banks to actually jump into the raising, and I think already in 2016. So all of that has worked well. However, I think what is the challenge? In Latvia, we don't have a branch. We have a daughter company, 100% owned limited liability company. But what's the challenge? Challenge is lending product actually is 100% similar in all the countries. What is different is a little bit difference in regulation, in identification, different KYC/AML rules. you have to always attach to different credit bureaus or basically the data you need for making the credit decision. And open banking, although it's helping, it's still actually not like fully scalable across the whole Europe. And you need to kind of find different solutions. So learning is, yes, you can take your business model from country to country. We are taking market share, we are winning, but it's not scaling as seamlessly as you would like, because each and every country you need to do some kind of localization, so you need to integrate into local databases. So there is still this kind of a missing piece, I would say, in this kind of unified European financial services market. It's not as smooth as you would love it to be.
No, it's not, it's not a single market as it is on paper, right? It's more difficult in reality.
I would say raising has done a great job, and it's a very simple product, basically unifying it. Maybe payments companies have been able to kind of— where there is like a very, very standardized rails. But lending is kind of a little bit kind of different rules, and these rules matter, and this basically makes it more challenging to scale. Mm-hmm.
Yeah, you need to adhere to compliance and regulations. That's obvious. I think what is less obvious and what I really admire about INBANK is that you also do not scare away from different innovative products. I'm taking 2 examples here. It's rental of electronic devices, Apple products, and another one is synthetic securitization of solar panels. And I think the solar panels, if I understood well, that's something that's only available in Poland?
Well, we actually have available in all the markets, to be honest, but Poland has scaled. And I think maybe I go with a couple of like generic strategy kind of points first. I think what we do is we help merchants to sell their products and goods and services. And we also try to make kind of financing as seamless, as simple for for private individuals who want to borrow for different needs. So we are less about just lending money, we are helping the purchases. So our business is to kind of build a kind of a smooth and tailor-made process for a specific product. So Apple is actually growing in the United States, in the UK with the rental product. We felt it's a logical product which has a residual value similar to the car. So if you don't have to finance the full price of the phone, you're able to actually reduce the price. You're also able to bundle insurance in there, which some of the customers want, or they want to buy the phone for their children and have insurance. So it's just another kind of a flexible way of owning a device over time and then returning and getting a new one. And it's, yeah, both of them actually sustainable, like the solar panels. And the solar panel was a little bit different because there, you know, there is a huge push in Poland to get it more green energy. And there is a lot of kind of a motivation and subsidies to have individuals to buy solar panels into their kind of house roof. And it's pretty large country. It's a lot of kind of houses. And again, the challenge is, you know, in terms of distribution of the product, there are installers who go to put those kind of panels on a roof, but they also need financing. And I guess, you know, our product again kind of integrated into the process while the merchant goes and the installer goes into the house. We are able to offer the financing basically at the point of sale. And the customer can make a deal immediately. So that is basically where we come in. Synthetic securitization is basically a product we used from European Investment Bank and European Investment Fund. It has two goals. One is yes, to kind of help Polish society to become more green and. private individuals to buy, kind of invest into solar panels. Secondly, it actually helps in bank to reduce our capital engaged in this basically assets. So we are able to kind of grow more and issue more loans with this credit kind of synthetic securitization. So that is basically the goal. The product itself is still Actually a kind of an installment loan for the solar panels to private individuals.
Well, a few times I was in my mind thinking, well, you're the embodiment of embedded finance, but I think there's so much more in the example that you give. It's almost embedded banking because you touch on financing, you touch on renting, leasing, and even investments. If you look at all these areas, what do you see as the cohesion between these different products and where do you see potentially different growth?
Well, what we have always thought since 2011 is that technology, digitization, especially open banking, is basically allowing to move financing or any finance-related products kind of outside traditional banks. Banks operate very kind of a closed, vertically closed business model and want to have basically, you know, their customer and cross-sell to them within their own environment. And I would say regulation is also pushing a lot, you know, to have it that way. But technology is allowing basically to make automated credit decisions. Technology is allowing automated online identification, onboarding of customers. And obviously, you know, you can innovate to think, okay, what is the best journey for the customer? And it's different if you want to buy a used car. How do you behave? You normally go to a, today, to the marketplace, online marketplace. You compare different cars and you make a couple of choices. And if you're there with financing and you can make sure that you get the money, you know, it's good to have an offer there, right there at the bottom of the kind of a car picture, easy application. And then you go and actually go out and go to the plot to see the car. So the journey is changing. Same with the solar panels. You have a process where basically installer is coming to your house talking about what kind of solar panels, what kind of package pitch to take offering, right, kind of financing right there. And technology is allowing it. So our view basically is that in, especially in a kind of a medium ticket size, what is like €1,000 to maybe €25,000 bracket, speed and convenience are very, very important.
Yes.
And basically tailoring to the specific vertical you're offering. Either it's with the process or with the product. That's a big advantage. And that's what we do. And basically, we think if we're successful, you know, those financing volumes will move out of traditional bank channels and they will come to us.
Makes sense. What I hear is a lot, and you used examples that you were already doing automatic credit decisions way back in time. And things obviously work well if you have good workflows. But nowadays there's an additional element to this mix. It's AI. So how are you looking at like new technologies and are you already experimenting or even implementing AI?
We are not yet implementing maybe to that extent. Obviously we are using AI, you know, for our engineers. you know, in terms of helping them in coding and all of those things. And we have our marketing and legal teams. We use AI to, you know, simplify their work. But I think AI is not there really to kind of revolutionize anything what we do. We have been basically doing machine learning, I don't know, last 15 years, because basically the way we make credit decisions, is one step short of AI. It's basically our data is analyzed, decision is made by a machine, data is analyzed by machine, but eventually still there is a human kind of reviewing it and making the final decision to change algorithm. You know, AI would be the final step. Actually, the machine would learn itself and would continue to improve a credit decision and you give them a prompt. I don't know, I want to maximize positive decisions or I want to maximize profitability or I want to maximize or minimize credit costs. So currently that piece is still for us, you know, we have a machine learning capability. I think the next step there is possibly, you know, adding then that the machine itself can improve and you just give it the prompt. Obviously, if you look forward, like this agentic world, that is basically almost fully embedded. So I guess I'm looking forward to this kind of a change in kind of internet infrastructure where basically you will, you know, write in, I want to buy a trip to southern Italy, and, you know, trip is offered and immediately financing is offered on top of that. And that, you know, well integrated into, into the infrastructure. But I think we are not there yet. So I think that's where the big change probably will happen. So I think—
Yeah, yeah.
We are kind of obviously monitoring these new developments in AI, but I think still the use cases currently are Kind of relatively simple ones.
No, and I think if you find the time is there, I think you're well placed with a very good fundamental structure of your bank because it seems to be very technical first. I also was wondering, because you're a relatively young bank, how do you see collaborating with the fintech ecosystems? And you already mentioned Raisin. I think that's a good example, but are there any other examples?
Yeah, yeah, I think we are in a way seeing ourselves as a fintech with a banking license. So we are looking to cooperate actually both ways with fintechs. We're also looking to cooperate with banks. And, you know, I cannot announce anything, but very, very soon we have one of the corporations with one of the larger retail banks where we provide a product and they will provide the distribution. So there is basically also different discussions with other players ongoing, some of which basically where we have our license and that would be a benefit. In other cases, we have a product or technology which is a benefit. So we can actually move both ways. We can move to work with fintechs and we have been like a long time working with different like payment service providers who are integrating our products towards their merchants. Actually, we even started one of the leading payment service providers in the Baltics. We sold that company. So we have been kind of not only doing in-bank, we have been trying to look for ways to basically improve the infrastructure available for financial services.
Great, thank you very much for all this input and a nice story. I was just wondering, if somebody would like to contact you, who should that somebody be and how can they contact you?
Well, we are looking for corporations all over Europe. I think we have made out an ambition to become a European player in embedded finance, and that means we look to cooperate with large merchants, we look to cooperate with other financial institutions, they can contact me at priet@inbank.ee. And, you know, we have been doing different joint ventures and working with numerous partners. We have 6,000 different partners. So that's what we do and always looking forward to fruitful cooperation. And thanks for inviting me.
Oh, you're very welcome. It's a pleasure having you. It's a pity that we couldn't do it in, I think it was Bergen, right? That you were there as well in the fintech event.
No, that was in Helsinki.
Helsinki. Oh, sorry. Yeah, that was Helsinki. That's true. That's true. So many nice—
Boat ride across the—
Yeah, for you.
Bay from Tallinn.
Yeah, I was saying that my colleague Sean once lives in Vilnius, so he took the boat up to Estonia for the weekend and then he moved on to Vilnius. Preet, thank you so much for having you in this podcast. Thank you also to the listeners, and please stay tuned as we will discover more news from our interesting financial industry. Thank you very much.
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