We may not realize it, but we’re currently living through a banking metamorphosis. Unlike a decade ago, banking isn’t just happening inside bank branches anymore. We can see it in action on our favorite apps, websites and even in our ride sharing or food delivery services. This quiet revolution is known as embedded finance and it’s transforming how we interact with money every single day.
Let’s unpack embedded finance. It entails an array of financial services like payments, lending or insurance that are seamlessly integrated into non-financial platforms. For instance, when you book a cab and pay through the app without pulling out your credit card. Or when your favorite online store offers "Buy Now, Pay Later" at checkout. These smooth, invisible transactions are made possible because fin-tech infrastructure is now seamlessly baked into your digital experiences.
According to Precedence Research, the global embedded finance market is predicted to grow a staggering 15 fold in the next 10 years. This exponential spike corroborates the global appetite and organic acceptance of embedded finance. It hasn’t just seeped into our daily lives; it’s also been widely embraced.
- Benefits of Embedded Finance
The beauty of embedded finance is convenience. You’re not switching between apps to complete a purchase, apply for credit or manage returns. It’s banking and finance that’s built into your lifestyle, not the other way around. This flawlessness helps businesses drive loyalty and improves access to financial tools for consumers who might not traditionally use formal banking products.
Small businesses can now access loans right through their accounting software. Freelance workers can get paid instantly through freelance platforms. Even health insurance and investment products are increasingly being offered within shopping or wellness apps.
But while the experience is smooth, it’s important for consumers to stay informed. Just because the service is invisible doesn’t mean it’s without risk. Always read the terms of those “one-click” loans or app-based investments before signing up. Especially in light of recent fraud instances.
As embedded finance continues to flourish, expect your daily money moments, big and small, to feel more effortless. From hailing a cab to buying coffee, from paying your rent to ordering clothes, banking is now in your pocket, your apps and your routines, quietly working behind the scenes, to make your life more manageable.
ALSO READ: Towards Sustained Growth with 96 Years of Banking Legacy
Disclaimer: The article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of The South Indian Bank Ltd. or its employees. The South Indian Bank Ltd and/or the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial/non-financial decisions based on the contents and information’s in the blog article. Please consult your financial advisor or the respective field expert before making any decisions.