What is embedded finance?

Embedded finance refers to the seamless integration of financial services such as payments, lending, insurance, and banking into non-financial platforms, applications, and everyday digital experiences. Rather than requiring consumers to visit traditional banks or separate financial institutions, embedded finance enables access to these services directly within the apps, websites, and platforms people already use for shopping, business operations, or daily tasks.

This transformation represents finance moving beyond the four walls of traditional banks to become an invisible but essential component of digital ecosystems across industries.

What are the core components of embedded finance?

Embedded finance encompasses multiple financial services that can be integrated into digital platforms. The embedded payment segment dominates with over 45% market share, but lending, insurance, investment, and banking services are rapidly expanding.

Key components include instant payment processing within e-commerce platforms, contextual lending at the point of purchase, integrated insurance offerings during booking processes, and embedded banking services that provide accounts and cards through non-financial brands. Banking-as-a-Service (BaaS) provides the foundational infrastructure by offering modular, API-driven banking components that third-party businesses can integrate without needing banking licenses.

The technology relies heavily on APIs, cloud computing, artificial intelligence, and blockchain to enable seamless integration and real-time processing. These technological foundations allow non-financial companies to offer sophisticated financial products while maintaining regulatory compliance through partnerships with licensed institutions.

What challenges does embedded finance present for traditional banks?

Traditional banks face the significant threat of disintermediation, potentially becoming mere utility providers while losing direct customer relationships to non-financial brands that control the customer interface. This shift could dramatically reduce their brand visibility and profitability in consumer-facing segments.

The banks-versus-fintech narrative is outdated, replaced by ‘coopetition’ where fintechs solve hyper-specific problems quickly while banks offer scale, trust and capital. However, this transition requires substantial investment in modernizing core banking systems, developing robust APIs, and fostering partnership-centric cultures.

Regulatory complexity presents another major challenge. Different countries have varying regulatory environments, making it difficult for businesses operating across borders to navigate complex compliance requirements. Banks must balance innovation with regulatory obligations while adapting to business models that blur traditional sector boundaries.

How can banks leverage embedded finance technology platforms?

Forward-thinking banks can transform the embedded finance challenge into opportunity by becoming BaaS providers, leveraging their regulatory licenses, trusted brands, and robust infrastructure to become the foundational layer for countless fintechs and brands. This approach provides access to new customer segments indirectly while creating substantial revenue streams.

Successful banks are developing comprehensive API strategies to enable integration with corporate clients, fintech partners, and digital platforms. Leading institutions have developed thousands of APIs enabling integration across multiple channels, generating millions of daily transactions through embedded channels and creating new revenue streams while extending beyond traditional boundaries.

Embedded finance offers ways for banks to monetize without raising costs to customers, enabling companies to seek out banks for core offerings while each party focuses on what they do best. Banks can broaden customer bases, develop new fee-based revenue sources, and maintain relevance as big tech and fintechs offer sophisticated consumer apps.

How is embedded finance reshaping global markets in 2025?

The embedded finance market is experiencing explosive growth, with projections showing it could reach between $570.9 billion and $1.7 trillion by 2030-2034, growing at compound annual growth rates of 21-32% globally. The financial system of the future won’t be built in banks but will be embedded in the apps, platforms and services people already use.

In the United States, the embedded finance market accounted for over 85% of revenue share in 2024, with traditional banks transforming digital platforms into financial ecosystems. In Europe, embedded finance volumes have grown three times faster than directly distributed loans over the past decade, with the market generating an estimated €20-30 billion in 2023. Other regions are also experiencing rapid adoption, with India’s embedded finance businesses expected to grow at a CAGR of 45%, driven by over 800 million active internet users and extensive mobile connectivity.

The acceleration stems from fundamental shifts in consumer expectations, technological capabilities, and business models. Technology leaders believe that 72% of financial products will be offered via non-financial platforms in the future, marking a complete reversal of traditional financial service delivery models.

How can Jifiti support embedded finance implementation?

Jifiti provides banks and lenders with lending technology that enables participation in the embedded finance ecosystem. While embedded finance encompasses payments, insurance, and banking services across industries, embedded lending represents a critical component where banks can offer loan products directly at merchant points of sale or within third-party platforms.

Jifiti’s platform allows financial institutions to embed their lending products into any customer touchpoint without losing control over underwriting, branding, or customer relationships. Banks can leverage Jifiti’s comprehensive third-party orchestration layer to integrate with enterprise merchants and digital platforms, enabling seamless deployment across online, in-store, and omnichannel environments.

The platform’s modular architecture means banks can select specific components needed for embedded lending while maintaining their existing infrastructure, significantly reducing implementation complexity and time to market. This approach positions banks to capture embedded finance opportunities while focusing on their core lending expertise and regulatory advantages.

Key takeaways

• Embedded finance represents a fundamental shift from traditional banking distribution to integrated financial services within everyday digital platforms, with the global market projected to reach trillions in value by 2030.
• Traditional financial institutions face both disruption and opportunity, with successful banks transforming into infrastructure providers through Banking-as-a-Service models that leverage their regulatory licenses and trusted brands.
• Technology platforms and APIs serve as the critical bridge connecting financial institutions with customer distribution channels, enabling seamless integration while maintaining regulatory compliance and security standards.
• The transformation extends far beyond payments to encompass lending, insurance, and banking services across industries, fundamentally changing how consumers and businesses access financial products at the point of need.
• Jifiti enables banks to participate in embedded finance through a modular lending platform that integrates loan products into any customer touchpoint while maintaining full control over underwriting and customer relationships.