In an era of digital disruption and shifting consumer expectations, banks are under mounting pressure to stay relevant. One of the most transformative, and perhaps under appreciated, strategies banks are now embracing is embedded finance. From enabling seamless lending at the point of sale to powering B2B payment flows within third-party platforms, embedded finance is no longer a fringe innovation. It’s becoming a core part of how banks compete in a fast-changing financial ecosystem. According to a recent article published by The World Economic Forum, embedded finance is a disruptive force financial institutions can’t ignore.
What Is Embedded Finance?
Embedded finance refers to the integration of financial services such as lending, payments, insurance, or even investing directly into non-financial platforms. Think of the ability to buy insurance while checking out on an e-commerce site or to get a small business loan while using accounting software. It allows financial products to be delivered in-context, at the point of need, creating a seamless customer experience.
For banks, this shift marks a departure from the traditional model of expecting customers to come to them. Instead, banks are going to where their customers already are: digital platforms.
Why Now? The Competitive Pressures Driving Change
Several forces are converging to make embedded finance a strategic imperative for banks:
Changing Consumer Behavior: Customers increasingly expect financial services to be instant, contextual, and invisible. They don’t want to toggle between platforms to complete a transaction.
Platform Dominance: From Shopify to Salesforce, platforms are becoming the digital infrastructure of the economy. The financial services offered within these ecosystems have a natural advantage.
Fintech Disruption: Fintechs have been quick to capitalize on embedded opportunities. Companies like Stripe, Square, and Adyen are offering banking-like services without being banks.
Regulatory Modernization: In markets like the U.S., UK, and Europe, open banking and evolving licensing regimes make it easier for banks to offer services via APIs and partnerships.
From Risk to Revenue: The Business Case for Banks
Banks have long viewed technology as a risk. Embedded finance reframes it as a growth opportunity. Globally, the embedded finance market is expected to reach $7 trillion in size by 2030, according to a report by Dealroom and ABN AMRO Ventures. This is not just about adding distribution channels. It’s about monetizing the bank’s core competencies—credit, trust, compliance, and risk management—in new environments.
Here are three compelling reasons banks are leaning in:
New Distribution Channels: By embedding their services into digital platforms, banks can reach more customers without opening new branches or launching expensive marketing campaigns.
Data Advantage: Embedded finance offers real-time access to user behavior, transaction histories, and contextual insights that traditional banking relationships often miss.
Partnership Leverage: Rather than compete with fintechs, many banks are now choosing to partner with them. Embedded finance allows for modular collaboration where each party plays to its strengths.
Real-World Examples
Goldman Sachs + Apple: Goldman’s partnership with Apple for the Apple Card and Apple Savings is a prime example of a bank embedding its financial products into a consumer tech ecosystem.
BBVA + Solaris: BBVA has partnered with embedded finance infrastructure firm Solaris to deliver banking services-as-a-service across Europe.
JP Morgan + Gusto: JP Morgan has collaborated with Gusto, a payroll and HR platform, to embed small business banking and payments capabilities.
These are not tech experiments. They are serious, revenue-generating strategies with long-term implications.
How Banks Can Get Started
Banks that fail to embrace embedded finance risk becoming invisible—not because their services are irrelevant, but because their distribution is. Consumers and businesses increasingly expect financial services to be built in, not bolted on. Banks that cling to legacy distribution models may see their brand recognition diminish, even as demand for their core services remains strong.
For banks looking to launch or scale embedded finance initiatives, here are three actionable steps:
Choose Your Use Case: Start with a single high-impact vertical—like small business lending, payroll integrations, or B2B payments—rather than trying to do it all at once.
Build or Partner for Infrastructure: Decide whether to build in-house APIs and onboarding tools or to partner with an embedded finance enabler (e.g., Treasury Prime, Synctera, Alloy).
Create a Cross-Functional Team: Embedded finance spans product, compliance, legal, tech, and partnership functions. Success depends on coordinated execution across the organization.
The Bigger Picture: Embedded Finance as a Strategic Capability
Embedded finance isn’t just a new channel. It’s a new way of thinking about how and where banking happens. It pushes banks to become infrastructure providers, not just service providers. This is a profound shift in identity—but also a liberating one. Banks don’t need to own the end-user relationship to own value creation. Just as cloud providers enable software companies behind the scenes, banks can become the trusted rails behind the next generation of commerce, work, and digital life.
As financial services become more decentralized, banks that embrace embedded finance will position themselves not just to survive, but to lead. The future of banking isn’t a place. It’s a presence—seamless, context-aware, and invisible. Embedded finance is how banks make that presence felt. For those that act decisively, this is more than a technological shift. It’s a strategic inflection point.
Now is the time for banks to ask: Are we ready to be everywhere our customers need us to be?
For more on Forbes, check out: The 3 Innovation Challenges Keeping Bank CEOs Awake At Night and How AI, Data Science, And Machine Learning Are Shaping The Future.
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