By: Quikstone Capital Solutions
Embedded finance. The term is popping up everywhere. What is embedded finance, and what does it mean for you?
Embedded finance occurs when a financial services product or process is embedded into a non-bank environment creating less work for customers. A simple example would be adding an alternative financing option to your website to help prospects purchase your products and services without needing cash.
Embedded finance is a growing, multi-trillion-dollar market. By enabling businesses to lend or accept payments without the use of traditional financial institutions, embedded finance has the potential to impact nearly every industry.
A new study from Juniper Research found that revenue from embedded financial services will exceed $183 billion globally in 2027, increasing from just $43 billion in 2021. Growing by 182% over this period, the report found that this expansion will be driven mainly by non-financial businesses incorporating embedded finance options into their product offerings.
Like all products and services, well-established companies can use their trusted corporate identity to give their alternative financing solutions an increased success rate, as consumers see them as reliable and trustworthy. Companies can also leverage their existing customer base to create an additional revenue stream.
B2B Embedded Finance – An Untapped Market
Juniper’s research found that embedded financial services are not readily available within B2B markets, resulting in a significant untapped opportunity for businesses to grow their revenue streams by incorporating embedded finance solutions.
However, there is a caveat. Businesses wishing to offer embedded finance must choose the right partner and the suitable offerings that solve genuine challenges for their customers, or they will lose out to better-targeted competitors.
