How can Embedded Finance Transform the Fintech Industry in 2021?

Embedded finance is emerging in the fintech industry to boost financial transactions in seamless ways in recent years. Embedded finance is set to transform the fintech industry by incorporating smart functionalities into traditional non-financial services. Customers can get complete access to all kinds of financial services like cashless payments through different financial apps. Digitalization and globalization are key factors for embedded finance to thrive in fintech companies. The main aim is to enhance customer engagement in small and medium enterprises, B2C, and B2B segments.

There are different applications of the embedded finance system that are helping businesses to collaborate with fintech companies— embedded payments, embedded credit, embedded insurance, embedded investments, and so on. Embedded payments refer to smooth transactions in-game purchasing, payroll automation software, and e-wallets through ERPs. Embedded credit covers consumers who want to apply for loans through the EMI approach within a specific time period. Embedded insurance offers transactional APIs and other technologies to enable current insurance solutions in apps, websites, and so on. Embedded investments enable different platforms to incorporate financial stock markets to invest in vertical offerings.

Embedded finance needs different platforms to work efficiently to transform the fintech industry in 2021— digital platforms like a mobile app, a website or any desktop or tablet applications to offer hyper-personalized or customized financial solutions, multiple financial institutions such as different types of banks and NBFCs to offer, manage and service loan requests from the embedded finance ecosystem.

Embedded finance has transformed the fintech industry through cashless payments with debit cards for streamlined payments. Fintech companies like Google Pay, PayPal, Payoneer, Paytm, and many more have allowed consumers to link a debit or credit card to their accounts that can provide direct access to the account balance. It also helps to pay instant money without waiting for two days for cash in hand system. Embedded banking has also encouraged small businesses to set up a different accounts for the shops instead of linking it to personal accounts.

Thus, it can be said that embedded finance is the bridge between cutting-edge technologies and the financial industry to accelerate processes of transactions beyond borders. Fintech companies have started adopting embedded finance to drive revenue in the tech-driven future with high customer engagement.