The global financial landscape is undergoing a profound transformation, driven by the rise of embedded finance. The rapid expansion of embedded finance is evident in its projected growth, with the market expected to generate €347.9 billion in revenue by 2029. According to Yahoo Finance, the industry is experiencing similar growth in Greece, with the embedded finance sector expected to grow by 52.4% annually, reaching €705.52 million in 2024. The growth in Greece is anticipated to continue steadily, with a Compound Annual Growth Rate (CAGR) of 37.6% from 2024 to 2029, reflecting the global trend.
Businesses are increasingly adopting embedded finance to enhance customer convenience and streamline access to financial services through integrated platforms. This approach is transforming the financial landscape by improving customer experiences with digital interfaces, such as wallets, shopping carts, and loyalty apps. It expands market reach by capturing a larger share of the value chain, creates new revenue streams through additional services and partnerships, and offers integrated financial experiences that allow customers to access multiple financial services from a single app or interface.
This remarkable growth is underpinned by several key technological advancements that are enabling the widespread adoption and success of embedded finance across diverse industries:
1. Strengthening APIs: Application Programming Interfaces (APIs) are crucial to the success of embedded finance. APIs connect financial institutions, fintech companies, and non-financial businesses, enabling diverse software applications to communicate and share data. By strengthening APIs, these connections become more efficient and scalable, allowing for a smoother integration of financial services into various platforms. This technological enhancement is broadening the scope and impact of embedded finance, making it easier for companies to embed financial functionalities directly into their products and services.
2. The Growth of the Buy-Now-Pay-Later (BNPL) Model: The buy-now-pay-later (BNPL) model is one of the most significant developments within embedded finance. As this model becomes more mainstream, it provides consumers with flexible payment options at checkout, allowing them to pay for purchases over time without incurring immediate full costs. The integration of BNPL into embedded finance ecosystems not only enhances customer satisfaction by offering payment choices that fit their budgets but also helps businesses reduce the risk of chargebacks. This technology-driven model is reshaping consumer finance by making it more accessible and aligned with modern spending habits.
3. Embedding Data Privacy and Security: As financial services are integrated into more applications, data privacy and security have become paramount. Financial transactions are highly susceptible to cyberattacks and data breaches, making the protection of sensitive information a top priority in embedded finance. Companies are increasingly investing in technologies that ensure regulatory compliance, particularly with regulations such as GDPR. By embedding robust data privacy and security measures into their systems, businesses can safeguard customer data, maintain trust, and support the sustainable growth of embedded finance.
4. Data Analytics and Machine Learning: Advanced data analytics and machine learning technologies are playing a pivotal role in the evolution of embedded finance. These technologies enable banks and financial institutions to personalise financial services and deliver targeted offerings to customers. By analysing vast amounts of data, banks can gain deep insights into customer behavior, preferences, and financial health, allowing them to provide customised financial solutions that meet individual needs. This level of personalisation not only enhances the customer experience but also drives greater engagement, as customers receive more relevant and timely financial services that align with their specific circumstances.
As traditional financial institutions and fintech companies collaborate more closely, discover how embedded finance is revolutionising both financial and non-financial industries at the 18th NextGen Payments & RegTech Forum on 10-11 October 2024 at the Marriott Hotel in Athens, Greece, for exclusive insights on "The Future of Embedded Finance: Integrating Financial Services Seamlessly into Everyday Experiences."
Hear from industry leaders, including:
Christina Apostolou, Head of Mobile Banking at Eurobank
Tatiana Giemelou, Head of Embedded Banking at National Bank of Greece
Don’t miss out! Book now to enjoy a 10% discount before it expires! Contact QUBE Events at info@qubevents.com to claim the discount!
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