The embedded finance market has been growing at pace since 2020. COVID proved to be a crucial catalyst, accelerating e-commerce, financial digitalisation, and consumers’ changing expectations. To add to that, fintech companies have been catching up with – and in some cases outpacing – traditional banks when it comes to gaining consumers’ trust in financial services. All these changes combined have created enormous opportunities for embedded finance.

In 2023, we will likely see embedded finance being adopted more widely in emerging markets. Led by inclusive fintech startups, embedded finance could empower consumers who were previously marginalised in the traditional financial sector. Similarly, emerging markets could offer a less restrictive environment, with lower costs and a larger customer base, stimulating innovation further.

Secondly, we could see more in-depth partnership between traditional financial services and fintech companies forming to support embedded finance adoption, namely banks and payment companies. This could lead to a scenario where banks provide fundamental infrastructure, and payment fintechs contribute greater inclusivity to tailor services for different business models, leasing greater potential.

Finally, there will also be much more emphasis on technological affordances and operational capacity to resolve any current challenges such as risk and compliance management in embedded finance solutions. Technologies such as cloud computing and AI machine learning will form multiplier effects across all industries, and support sectors’ abilities to embrace embedded finance.