How Embedded Finance is redefining financial services and unlocking new revenue streams: by Sergiy Fitsak

Integrated finance is no longer just a buzzword, it is rapidly transforming the way businesses and consumers engage with financial services.

By seamlessly integrating payments, lending, insurance and banking into everyday platforms, it streamlines transactions, improves customer experiences and opens up new revenue channels for businesses across industries.

In this article, we’ll explore the rise of integrated finance, highlight key use cases across industries, and analyze how companies can leverage it to drive growth and customer loyalty.

What is Embedded Finance?
Integrated finance refers to the integration of financial services directly into non-financial platforms or services. This allows consumers to access everything from payments and loans to insurance and investments without ever leaving the apps they use every day. Imagine booking a trip, buying travel insurance or getting a loan, all in one seamless transaction.

Integrating financial services directly into platforms simplifies the process for consumers and makes financial transactions faster and more intuitive.

A rising market
Integrated finance isn’t just growing, it’s booming. Experts project that the global integrated financing market could reach $7 trillion over the next decade. API advances, the rise of e-commerce and changes in consumer behavior are accelerating this trend.

In 2020, the integrated financing market generated revenue of $22.5 billion, and by 2029 it is expected to increase to $384.8 billion. The rapid growth of this sector is a significant opportunity for companies to leverage financial services as part of their core offerings.

Examples of integrated financing in action

• Embedded Payments: Platforms like Uber and Amazon allow customers to pay seamlessly within the app, offering a frictionless user experience.
• Integrated loans: Buy-now-pay-later (BNPL) services like Klarna allow users to split payments on purchases without leaving the site, increasing sales and customer satisfaction.
• Integrated insurance: Consumers can purchase insurance right when they need it, whether it’s buying a flight or a new car, streamlining the process and increasing coverage adoption.
• Integrated banking: Lyft and Shopify now offer branded debit accounts, which allow users to access earnings or pay for services instantly.
• Integrated investment: Platforms like Robinhood and Cash App integrate investment into their core services, democratizing access to financial markets.

Why integrated finance is important for business
Integrated finance opens up new revenue streams and improves customer engagement. For businesses, it simplifies transactions, fosters customer loyalty, and provides rich insight into user behavior.

By integrating financial services, businesses can deliver personalized experiences and build lasting relationships with their users.

A Plaid report found that 88% of businesses using integrated financing report increased customer engagement, and 85% say it helps them attract new customers. This powerful tool not only improves customer retention, but also helps businesses stay competitive.

The future of integrated finance
The potential of integrated finance extends far beyond today’s industries. Experts predict that it will play a key role in sectors such as healthcare, education and real estate in the coming years.

As more businesses embrace integrated finance, they will create new ways to serve underbanked populations and make financial services more accessible to all.

Integrated finance will continue to reshape industries and democratize financial tools, making it easier for people around the world to access the financial services they need, right where they need them.

Final thoughts
The rise of integrated finance is transforming the way businesses interact with customers and how consumers access financial services. As it continues to grow, businesses that embrace integrated finance will unlock new revenue streams, improve customer loyalty and stand out in a competitive landscape.

From seamless payments to personalized insurance, integrated finance is revolutionizing the way we think about financial services, and businesses that embrace it are poised for success.