With Google adding checking accounts, Apple entering the credit card arena, and Amazon offering loans at the point-of-sale, the trend is clear—non-traditional finance players are making a big push for market share in consumer financial services.
But how can these tech giants pivot so swiftly into an industry that has been dominated by traditional players for decades?
The answer lies in the rise of embedded finance.
What is embedded finance?
Embedded finance is the seamless integration of financial services within the product offerings of non-financial businesses. For example, if you’re shopping for home-workout equipment, the retailer may enable you to finance the purchase within the checkout experience.
The goal of these businesses offering embedded finance is not necessarily to compete directly with banks on their turf. Instead, it offers an opportunity for smart players to diversify revenue streams and increase customer lifetime value. Ultimately, it’s about meeting the needs of the modern consumer in a digital world.