The Embedded Finance Explainer: Nonfinancial companies are increasingly looking to offer financial products via their platforms—here’s how innovative FIs can partner with them to capture a $7 trillion opportunity

• Embedded finance is an emerging software distribution model that is promising—or threatening—to reshape the financial services industry.
• The global embedded finance market is still nascent, but its growth potential is enormous. You can learn more in our Embedded Finance Explainer.
• Do you work in the Fintech industry? Get business insights on the latest tech innovations, market trends, and your competitors with data-driven research.

Embedded finance is an emerging software distribution model that is poised to reshape the financial services industry. To help financial service leaders navigate this emerging market, Insider Intelligence detailed key embedded finance trends and potential growth opportunities.

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What is embedded finance?

Embedded finance is a term for when nonfinancial companies offer financial products and services to their customers while retaining complete control over the customer experience. Essentially, a financial institution (FI) distributes its products through a nonfinancial company.

Embedded finance market

Embedded finance companies, including those pivoting into the trend, will reach a market cap of $7.2 trillion globally by 2030. Additionally, the embedded finance market will reach just under $230 billion in terms of new revenue volume by 2025 in the US, versus $22.5 billion in 2020, an increase of 922%

Future of embedded finance

A combination of industry, consumer, and macroeconomic factors will power the rise of embedded finance in Europe, the UK, and the US over the next decade. Most of all, embedded finance will become mainstream thanks to increasing consumer trust in Big Tech firms to manage their finances, as well as these firms’ growing footprint in finance.

Want to learn more?

Insider Intelligence’s Embedded Finance Explainer defines the concept of “embedded finance” and explains its potential impact on how financial services and products are distributed and consumed. The report also provides real-world examples to illustrate how embedded finance works in practice.

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