Embedded finance

Embedded finance means that non-financial businesses become a part of the financing process, by embedding financing as a part of their service.

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Embedded finance market size in 2024

AExpert Market Research​ Allied Market Research

74 B€

Market size

The estimated market size for embedded finance in 2024.

25 %

Market growth

A forecasted growth at a compound annual growth rate (CAGR).

523 B€

Future market

By the end of 2032, the market size is expected to reach.

Embedded finance trend is not just an enhancement of user experience — it's a paradigm shift

By incorporating embedded finance directly into your digital offerings, you can significantly elevate customer satisfaction and open up new revenue streams.

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New sales channels

Discover and unlock new customer acquisition channels by having unlimited partnering opportunities.

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Lower marketing costs

Direct sales partnerships reduce your need to use Google Ads, Display and other expensive customer acquisition channels.

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Better user experience

Embedded finance offers a significantly better user experience and increases your conversion rates versus other partnering methods.

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Brand visibility

Embedded finance solutions increase your brand visibility as your financing options are always visible, where your customers are.

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Some key knowledge about embedded finance

Embedded finance can be a complex thing. We make it more simple.

Embedded finance definition

Typically embedded finance refers to the integration of financial services or products into non-financial platforms or apps, such as e-commerce websites, social media platforms, or mobile apps. It allows customers to access financial services seamlessly within the context of their daily activities, without having to navigate to a separate banking or financing platform. Embedded finance also allows financial platforms, such as lending or brokering to expand their offering by integrating complementary services on their platform.

Popular examples about embedded finance

For example, an e-commerce platform could offer an integrated lending service, allowing the customers to get a financing for their purchases without leaving the e-commerce platform. Another example is an invoicing app that allows users to finance their invoices without leaving the app. Embedded finance can be used also in launching partnerships between financial institutions. For example a consumer lending broker can easily embed insurance services as a part of their platform.

Benefits of the embedded finance

Potential to improve financial inclusion by making financial services more accessible and convenient for a wider range of customers.

Embedded finance vs banking as a service

Embedded finance and banking as a service (BaaS) are both terms used to describe the integration of financial services into non-financial platforms or applications. However, they differ in their focus and scope. Embedded finance typically refers to the integration of specific financial products or services, such as insurances or lending, into non-financial platforms or applications. The goal of embedded finance is to make financial services more seamless and convenient for users. Banking as a service, on the other hand, is a broader concept that refers to the provision of a full suite of banking services, including deposit accounts, card issuance, and lending, to third-party platforms or applications. BaaS enables non-banking companies, such as fintech startups or e-commerce platforms, to offer banking services to their customers without having to build their own banking infrastructure. In summary, while embedded finance focuses on the integration of specific financial products or services, BaaS provides a full suite of banking services to third-party platforms or applications.

Embedded finance market size

According to a report by FutureMarketInsights.compublished in 2022, the global embedded finance market is likely to grow at a strong CAGR of 16.4% between 2022 and 2032. The market is valued at US$ 54.3 Billion in 2022 and is likely to reach US$ 248.4 Billion by 2032. The report highlights the rising number of fintech brands expanding their roots in the insurance market and enhancing innovative platforms building contextual insurance products and services, which is accelerating the growth of the embedded finance market in new market spaces. As digitization increases in the corporate structure, the digital lending sector flourishes and transforms. Fintech companies are evolving and introducing new technologies to enhance the customer experience. The Indian insurance industry has also helped in booming the embedded finance market, easing the complex processes through cutting-edge fintech. It is important to note that the projections are subject to change as the market evolves and new trends emerge.

Embedded finance trends & future

Increased Adoption of Embedded Finance Platforms: The use of embedded finance platforms is rapidly increasing in the embedded finance space. Using embedded finance platforms financial services can reduce their go to market -time to the zero, also enabling businesses to integrate financial services more easily and efficiently into their products or services.

Personalization and Customization: Embedded finance providers are increasingly offering personalized and customized solutions to meet the unique needs of customers. This trend is expected to continue, with businesses leveraging data and technology to provide tailored financial products and services.

Collaboration between Fintechs and Banks: Collaboration between fintechs and traditional banks is on the rise, with both sides recognizing the benefits of working together. This trend is expected to continue, with more partnerships and collaborations between these two sectors.

Increasing focus on Financial Inclusion: Embedded finance has the potential to improve financial inclusion by making financial services more accessible and convenient for a wider range of customers. This trend is expected to grow, with businesses and policymakers alike recognizing the importance of financial inclusion for sustainable economic growth.

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