Embedded Finance: The Next Big Revolution in The FinTech Landscape
Posted By : Priyansha Singh | 08-Jun-2021
Embedded Finance: The Next Big Revolution in FinTech Landscape
The way forward is to develop new thoughts, ideas, and technologies and put them to use in ways that have never been done before. Embedded Finance is one such example of human intelligence that has provided FinTech with a telescopic lens to view many opportunities that were before invisible. In the FinTech Universe, Embedded Finance is a new Galaxy.
Embedded finance has quickly become one of the most talked-about buzzwords in the Fintech world. But what exactly does it imply? In a nutshell, embedded finance refers to integrating financial services into non-banking mobile apps, websites, or business processes.
The following are the areas where embedded finance will be primarily targeted in the year 2021:
- Wealth Management
- Consumer Lending
The insurance sector is expected to grow by 62%, i.e. $5 billion to $70.7 billion, according to the compound annual growth report. Consumer leading is predicted to expand at a similar rate, while the payments sector will grow at a rate of 54%.
Why should you pay attention to embedded finance?
Embedded finance assists organizations in overcoming digital adoption hurdles and providing exceptional financial services to their clients. While integrated finance will assist the global economy, it will have a huge impact on the FinTech sector. Here are the top 5 reasons why embedded finance is worth your attention.
Convenience: With the support of BaaS service providers, Fintech mobile app development companies are working hard to streamline client operations by adding banking capabilities for large and small businesses.
User-experience: Financial software developers know how to create an interface that keeps a user engaged with their user-centric mobile application services.
Seamless Payment: Creating a smooth experience by embedding financial services in non-finance apps such as QR codes, BNPL, digital wallets, and ridesharing insurance.
Revenue: Integrating financial services into the company's present products resulted in a 5X increase in revenue per customer.
How AI & Machine Learning Will Improve Fintech?
In the growth of Embedded Finance and FinTech, AI plays a critical role. With the advent of smartphones and ubiquitous internet access, the volume of financial data being exchanged has skyrocketed.
What's needed is a new tech stack that can bend and react in real-time to shifting market and consumer demands. Artificial intelligence (AI) and ML are proven to be particularly good at analyzing and proposing actions based on real-time data streams. They also enhance client experience while lowering risk, two further reasons for lenders to replace their old IT stacks with new ones.
Also Read: Kickstart Your FinTech Startup With These Top 6 BFSI App Ideas
Applications of Embedded Finance
Embedded finance has become a disruptive force in payments, banking, and technology today, demonstrating a huge potential for altering financial services for businesses and consumers. With the help of Fintech development businesses, financial services have been integrated into a variety of non-financial software and applications. Embedded finance is finding its place in the following applications as it has become a tech stack and a part of their Fintech software development services for organizations of all sizes:
PoS, eCommerce, & vertical software vendors: Shopify, Toast, Lightspeed, and other sub-merchants benefit from Embedded Finance's integrated payment and loan capabilities. Merchants who conduct transactions for a merchant aggregator are known as sub-merchants.
Ridesharing: Both the rider and the driver can use financial services such as digital wallets, insurance, fast payouts, and debit cards provided by ride-sharing businesses like Uber.
Consumer-focused Fintech apps: Fintech software and app development solutions that focus on users' individual needs and grow their app's functionality to suit these demands through debit cards, loan installments, instant lending, and rapid loan payout, among other things. Revolut, Klarna, and Square are just a few examples of consumer-focused finance apps.
Consumer tech companies: Large tech businesses like Apple, Google, Facebook, Amazon, and Telcos provide digital wallets, peer-to-peer payment services, credit and lending services, and debit cards to their customers.
Embedded finance is without a doubt the future of financial services since there are several use cases that increase its potential in the finance ecosystem. With its enormous potential to revolutionize the face of financial services, embedded finance will prove to be a crucial milestone in the Fintech revolution in 2021.
Embedded finance has evolved into a technologically enabled act of innovation. Fintech app development companies all around the world are attempting to capitalize on the advantages of integrated finance to generate new business prospects, ideal experiences, platforms, and solutions.
With our tech-focused approach and proven underwriting stack, we provide effective customer-centric Embedded app development solutions that comply with the highest regulatory standards. Contact our experts if you want to build a Fintech mobile app development solutions that are relevant and viable.