Embedded finance arms race intensifies as banks eye opportunity
The early dominance of embedded finance and banking-as-a-service by fintechs is now being challenged by established financial institutions.
Publicis Sapient’s recently forecast that embedded-finance revenues would increase by more than 40% annually through to 2025. Unsurprisingly, therefore, banking groups are now increasing their focus on providing these third-party services.
According to banking technology provider BankFi, there is a war waging for who – or perhaps even what – will be the ‘front door’ for the digital services required to run a business.
In October, Sumitomo Mitsui Financial Group announced plans to expand its embedded-finance business in southeast Asia, while NatWest entered into a strategic partnership with Vodeno Group to create a new banking-as-a-service (BaaS) business in the UK.
Just a few weeks earlier, HSBC introduced what it described as the only solution that embeds banking services into a cloud enterprise resource planning system in conjunction with Oracle NetSuite.