If you frequently order food through home delivery apps or book cabs for daily commute, you might have come in contact with embedded finance solutions feels Bahaa Abdul Hussein. The concept of embedded finance is all around us these days, forming an integral part of the 21st century fintech solutions. Embedded finance is nothing but the amalgamation of traditional finance-related services like payments and insurances into a company’s non-financial department without needing to go through conventional finance modes like the banks.

A game-changer in banking

Gone are the days when one had to undergo the troubles of red tapism to apply for loans or wait days to make cross-border money transfers. Few taps of a button can now present novel financial solutions that were previously unimaginable. This is possible largely due to many non-financial entities partnering up with banks to provide embedded solutions and speeding up the transaction for customers.

If you’ve been to the movies, you would’ve noticed special offers for customers with bank accounts in some affiliated banks. There are special credit and debit cards now promoted by banks in partnership with companies hailing from airlines, cab services, ticketing services, cinema chains and food chains.

Benefits of embedded finance

Customers can no longer be bothered with carrying their credit or debit cards or remembering all the details to key it in every time. As we live in a paperless economy, modern embedded finance options have radically simplified our lives.

By collaborating with banks, businesses now provide exclusive perks like facilities to pay back in installments, quick insurance availability, modern lending solutions and instantaneous payment services. They have understood the needs and whims of the new-age consumers and patterned financial services that are hassle-free and automated.

Boosting bank image

Banks are now revamping their customer services to keep up with changing trends. So far, many complaints against the conventional bank system has been long queues and lengthy processing time. With the help of embedded finance however, banks have expanded their consumer base by targeting Gen Z consumers who love using tech-savvy finance-focused applications.

They are more than happy to invest in a special credit card if it means they can skip the line and buy what they want. Everyone wants to complete purchases quickly without having to worry about their bank balances. In this way, embedded finance is indeed shaping the future of banking in exciting ways. Researchers state that the field is expected to grow by billions of dollars in the next few years.

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