Unlocking the embedded finance opportunity
From direct-to-consumer retail to complete homebuying services delivered on an app, companies from a wide range of sectors are acting on their belief that they cannot serve their customers on their own — especially when it comes to ensuring their financial peace of mind.
To deliver the experiences customers increasingly expect, embedded finance is becoming not just a nice to have, but a must have for many businesses.
Take Tesla, which offers an insurance product that is based on real-time driving behavior. This ecosystem includes the electric vehicle firm, an insurance company, a telematics specialist, and payment and billing providers. The end goal is a more accurate, competitively priced product that a customer can purchase at the same time as the vehicle — thereby saving them time and effort.
But embedded finance is not just for technologically savvy companies. Traditional organizations are reacting to weak margins in their legacy businesses by adding embedded finance to new digital services. Increasingly, sectors including automotive, healthcare, retail, education, and telecommunications are turning to direct payment, protection, and lending products.
This combination of new players and increased demand for quicker, more seamless payments from incumbents means embedded finance is projected to have a market value of $7.2 trillion in 2030 by the WEF.