Embedded finance is revolutionizing the financial industry, offering unique growth opportunities to financial institutions. In a new report published by Mobey Forum’s Payments Expert Group, the incredible potential of embedded finance is highlighted, shedding light on its rapid growth and the revenue opportunities it brings.
The Rapid Growth of Embedded Finance
Embedded finance is already gaining momentum globally, with forecasted transaction values of USD $7 trillion in the U.S. alone by 2026. The potential for substantial growth is evident. According to experts, embedded finance is expected to account for up to 15% of revenues in Europe by 2030.
Exploring Integration of Financial Services
The Mobey Forum report delves into the integration of financial services, emphasizing how they can enhance and complement third-party service offerings from both banking and non-banking entities. By leveraging embedded finance, financial institutions can seamlessly integrate their products and services into retailers’ sales channels, placing themselves at the core of the customer journey.
Benefits of Embedded Finance for Banks
Embedded finance offers numerous benefits for banks, empowering them to optimize customer engagement. By integrating financial solutions directly into retailers’ sales channels, banks can fortify their position in the value chain. This integration enhances the customer journey and unlocks new revenue streams.
Revenue Opportunities for Banks
Financial institutions that embrace embedded finance can unlock significant revenue opportunities by capturing a larger share of the value chain. By establishing direct connections with customer-facing third parties, banks can rapidly scale up and potentially realize additional revenue opportunities ranging from 10% to 100% of the total value created within the value chain.
Insights from Mobey Forum Members
The Mobey Forum report derives insights from its members, who are industry experts and practitioners operating within the banking and payments landscape. These subject matter experts analyze trends, opportunities, and risks, ensuring the report’s credibility and relevance. Their expertise adds valuable perspectives to the analysis of embedded finance.
The report by Mobey Forum’s Payments Expert Group underscores the unique growth drivers and opportunities that embedded finance offers financial institutions. With its potential to transform the financial landscape, embedded finance demands that banks adjust their thinking and optimize their engagement within the value chain. By embracing embedded finance, financial institutions can position themselves at the forefront of innovation and tap into unprecedented revenue streams.
In conclusion, as embedded finance continues to gain ground, financial institutions must recognize the potential it holds. The report by Mobey Forum’s Payments Expert Group serves as a valuable resource for banks to understand the growth drivers, revenue opportunities, and integration possibilities that embedded finance offers. With the insights and recommendations provided, financial institutions can navigate the path towards embedded finance and capitalize on its transformative power.