Embedded Finance and the Re-Bundling of Financial Services
- Andrew Ellis, CEO at NatWest Boxed
- 29.11.2024 11:30 am #EmbeddedFinance #ReBundling
In 2025, the great re-bundling will accelerate – driven by financial institutions themselves, but also increasingly by non-financial services (FS) brands.
Previously only available directly from the source, the growth of embedded finance has seen financial services embedded directly into the ecosystem of popular brands. So far we have seen businesses such as retailers integrate select services, initially with a focus on convenient payment options — BNPL being the most obvious example.
Over the next 12 months, expect to see brands introducing new offerings to build a patchwork of convenient products and services that enhance customer choice. This includes the introduction of innovative credit products driven by increasing regulation.
We’ve already seen brands like Shopify and Apple build out their financial services to the point they now operate, in effect, like a bank. Other leading brands will follow suit, collaborating with FS providers to establish a new normal where customers can turn to their favourite brands for all their finance needs.
Make no mistake, banks will continue to play an integral part in this journey. Regulatory scrutiny continues to raise the bar for compliance, and non-FS businesses on an embedded finance journey will increasingly seek providers that have their own banking licence and compliance expertise.
