Embedded finance expected to blur fintech lines by 2030


  • Fintechs expect embedded finance to be a dominant trend by 2030, with big techs leading the charge.
  • This would open partnership and customer acquisition opportunities for fintechs.
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The fintech industry expects financial services to increasingly be embedded into nonfinancial platforms over the next decade, so much so that fintech will no longer be a distinct sector, per a press release seen by Insider Intelligence.

Fintechs' view on big tech firms offering financial services

Fintechs expect embedded finance to be a dominant trend by 2030.

Business Insider Intelligence


“Embedded finance” is a term for nonfinancial firms directly offering financial products and services to their customers while retaining complete control over the customer experience. The findings are based on the study “Fintech 2030: The Industry View,” by payments provider Tribe Payments, which surveyed 125 fintech executives.

Respondents expect big tech firms in particular to accelerate this trend, with fintech integrations powered by advances in machine learning, IoT, and automation.

  • Big techs will increasingly embed fintech offerings on their platform. Thirty-four percent of fintechs expect that big tech firms will become aggregators of bank and fintech services, as seen with Google’s checking account, where Google handles the consumer-facing front end while accounts are held by FDIC-backed partner institutions. And 24% of respondents go as far as to say big tech firms will compete on an equal footing with banks and fintechs, similar to what we have seen with Alibaba-backed Ant Financial in Asia.
  • Algorithms and data collection tech will power the shift to embedded finance. Respondents predict that machine learning (71%), IoT (49%), and automation (40%) will be the most important technologies, as these support nonfinancial firms’ access to financial services. For example, booking platform Campings.com has integrated Setoo’s machine learning-powered policy coverage to its online purchasing journey, enabling customers to directly receive the optimal price for rainy day protection.

Embedded finance presents an opportunity for fintechs to accelerate their scaling, which will be necessary to attract investors over the next decade. Even the largest fintechs remain small relative to established brands: The US’ biggest robo-advisor Betterment has $22 billion in assets under management, versus Vanguard’s robo-advisory service managing $118 billion.

Partnering with established firms, such as big techs, that have already achieved a massive scale can turbo charge fintechs’ customer acquisition. Fintechs should leverage the coronavirus pandemic to score such partnerships, as the crisis has put into sharper focus existing inefficiencies—such as the lack of remote banking services—and amplified the need for disruption in the distribution of financial services.

In addition, 60% of survey respondents believe that there will be less fintech funding over the next decade, and that investors will focus on tangible numbers, such as the cost of acquiring customers and profitability. We therefore expect funding to flow toward fintechs that facilitate the embedding of finance, as these will have the clearest growth trajectory.

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