Embedded Finance

CHAPTER FIVETHE RIGHT INGREDIENTS ARE NOW IN PLACE

We have seen how embedded finance benefits consumers in the online and offline world and how embedded finance makes good business sense. We have also seen how customer expectations have evolved alongside technological advances that make now the right time for embedded finance to make its presence felt every day on a global basis.

Over the past few years, a combination of factors have brought tech companies, financial services providers, regulatory authorities, and consumers, exactly where they needed to be to seize the embedded finance opportunity.

The technology is in place. Through the use of APIs, Open Banking, Banking-as-a-Service, and artificial intelligence, the infrastructure is there to move to the next level.

Regulatory authorities are ready. Financial services companies report to an array of regulators, and each agency has different priorities. Consensus around innovation has emerged, and regulators are open to seeing more use cases as long as they serve the customer's interest. Regulators are now making an effort to reach out to fintech companies and understand their role in the ecosystem.

Financial services providers are ready. Banks can deliver sophisticated services by API, though not all banks (nor all APIs) are created equal. As their distribution model changes, banks will need to seek new sources of revenue, and interact with their customers in different ways. Banking-as-a-Service has matured and banks are ...