EMBEDDED FINANCE
FINTECH AND THE FUTURE OF EMBEDDED FINANCE
Embedded finance is transforming the consumer and commercial space as open banking and API technology continues to disrupt fintech
WRITTEN BY : JOANNA ENGLAND
Embedded finance , open banking and APIs are often terms used with seamless interchangeability . But each of these elements has become critical to driving disruption in the financial services space .
What is embedded finance ? The term embedded finance refers to the integration of financial services into companies ' normal services . These include all manner of different payment options at the checkout , insurance , ewallets , or any aspect connected to financial transactions .
Put simply , embedded finance enables businesses to ' embed ' financial services into their business models at various points along their customers ' journey by leveraging their own proprietary data on top of external financial information .
However , embedded finance wouldn ’ t exist without open banking , and it wouldn ’ t operate without APIs . Essentially , open banking has acted as a launchpad for embedded finance . Open APIs , meanwhile , are provided by banks to companies that wish to offer embedded financial services . Ultimately , the technology that has enabled banks to offer frictionless payment experiences , is now available for the commercial and consumer sector in the form of embedded finance .
New embedded finance trends for 2023 / 4 As disruption sweeps the financial services industry , embedded finance is no exception to the winds of change . According to Nikhita Hyett , EU MD of BlueSnap , there are two major trends that will be leading transformation in embedded payments and strong customer authentication .
“EMBEDDED PAYMENTS - WHICH ENABLE
BUSINESSES TO PROCESS THEIR OWN PAYMENTS - WILL DRIVE THIS WIDESPREAD ADOPTION ”