Embedded Finance Market Trend, Outlook & Forecast 2033 | FMI (2024)

Embedded Finance Market Outlook

The embedded finance market is projected to expand its roots at a strong CAGR of 16.5% during the forecast period. The market is likely to hold a revenue of US$ 63.2 billion in 2023 while it is anticipated to cross a value of US$ 291.3 billion by 2033.

Rising number of fintech brands expanding their roots in the insurance market, enhancing innovative platforms building contextual insurance products and services. This accelerates the growth of the embedded finance market in new market spaces. The digital lending sector flourishes and transforms as digitization increases in the corporate structure.

Fintech companies are evolving and introducing new technologies to enhance the customer experience. The Indian insurance industry has also helped in booming the embedded finance market, easing the complex processes through cutting-edge fintech. This leads to high sales of embedded finance solutions while vendors focus on making these solutions flexible so that they can be integrated with other cutting-edge technologies. This raises the demand for embedded finance solutions worldwide.

What Are The Key Drivers And Restraints For Growth Of The Embedded Finance Market?

Concepts like UPIs, consumer lending, SME lending, and insurance are helping the embedded finance market grow. These concepts are also expected to push the market upward in the forecast period, digitizing multiple sectors from finance to retail.

The key factors driving the growth of the embedded finance market are growing digitization in multiple spaces, acceptance of UPI payments, and increased consumer and SME lending.

Embedded finance can be known as financial services that are not integrated with banks.

The use of these services has increased lately due to the transformation of each sector and the fourth industrial revolution, also known as Industry 4.0. Covid-19 has also pushed the cashless economy and increased the consumption of embedded finance.

SME lending is another growing sector, accelerating the growth of the embedded finance market worldwide. Small and medium-sized enterprises seek financial aid to expand their distribution channels and supply chains; especially the covid-19 has impacted these SMEs adversely. To recover from the damage, these small and medium enterprises seek financial help, a loan against a business, or any other type of loan. This pushes the sales of embedded finance solutions and services.

Multiple investment schemes drawn up by governments and private players are also spreading awareness among people about alternative investment plans. Apart from this, the digitization of multiple sectors leads to cashless transactions, fueling the sales of embedded finance services. For instance,

Cashless transactions have skyrocketed in India due to covid-19 and demonetization. The UPI payments are now used largely, integrating with multiple platforms like Paytm, Google Pay, and Phone Pay. Low-cost EMIs are another important factor that drives the sales of consumer lending.

The B2B operations integrate with fintech services to improve financial management, increasing the sales of embedded finance solutions. Another key factor that pushes the market growth is the high penetration of the internet and 4G/5G services in developed and developing regions.

The only restraint to the market is the unavailability of the internet, including the incompetency of the workforce. New risks involving financial transactions that lead up to fraud and malicious activities are also hindering the growth of the embedded finance market.

Country-wise Insights

The embedded finance market is divided into regions such as North America, Latin America, Asia Pacific, the Middle East and Africa (MEA), and Europe. The foremost market is the United States, thriving at a CAGR of 16.1% between 2023 and 2033. The United States held a market share of 22.3% in 2002 while North America region held a market share of 32.5

The region is expected to hold a market revenue of US$ 89.1 billion by the end of 2033. Factors behind this region's high sales of embedded finance solutions and services are increased investment, payment, and loan digitization. Apart from this, China is the second high-growth market for embedded finance market, thriving at a CAGR of 15.8% and might hold a value of US$ 17 billion by 2032.

Japan region is estimated to hold US$ 13.8 billion by the end of 2033 as it thrives on a promising CAGR of 14.7% between 2023 and 2033. The United Kingdom also grows along with Japan and the forecasted value is US$ 10.5 billion (2033) at a CAGR of 15.3% between 2023 and 2033.

Key Regional Trends:

• The United States holds a significant portion of the embedded finance market.
• The United States of America is a notably growing market making North America region the highest growing region, thriving at a CAGR of 16.1% between 2023 and 2033.
• Better end user experience, growing digitization, better ROI, and smooth processes provided by embedded finance services in North American countries like the United States and Canada are pushing the demand for embedded finance solutions in the region.

Category-Wise Landscape

What is the Segmentation Outlook for the Embedded Finance Market?

The embedded finance market is categorized by type and end user. These categories are further divided into small segments that expand their channels in multiple market spaces. These segments perform differently in multiple markets as they have a stronghold in multiple regions.

The type category is segmented into embedded banking, embedded insurance, embedded investments, embedded lending, and embedded payments. The end user category is segmented into loan associations, investment banks & investments companies, brokerage firms, insurance companies, and mortgage companies.

Which Segment is Likely to Lead the Embedded Finance Market by Type?

By type, the FMI study finds that the embedded banking type has a high sales potential through 2033. The adoption of embedded held a market share of 32.1% in 2022. Its growth is attributed to the rapid digitization of banking services and private banks, enhancing and transforming the customer experience.

In the future, sales of embedded banking services are estimated to grow in proportion to the need for easy processes and smooth transactions. This pushes the sales of embedded finance systems in new markets.

Which Segment is Likely to Lead the Embedded Finance Market by End User?

By the end, the user, investment banks & investment companies segment is the big segment in the embedded finance market and is expected to hold a notable portion in the forecast period. The segment held a market share of 27.2% in 2022.

Factors behind the growth of this segment are rising start-ups and demand for high investments. The increased consumption through investment services and integration of embedded fintech services is increasing the sales of embedded finance solutions.

Competition Scenario

The competitive landscape of embedded finance is diversified and makes the market exclusive for new players. Companies also collaborate and merge with other companies, which enhances operability. The vendors focus on expanding their supply chain and distribution channels.

Market Developments

• Bankable has introduced its series of virtual ledger managers, payment card programs, digital banking, and e-wallet. This pushes the sales of embedded finance services.
• Crossriver has launched its multiple embedded finance services like payment, lending, banking, traditional banking, and compliance. These fuel the sales of embedded finance services.
• Flywire has upgraded its set of services covering multiple industries like education, healthcare, travel, and B2B, fueling the sales of embedded finance solutions.
• Balance has introduced its platform that delivers credit limit and net terms with financing deals up to US$ 4.5 million through the real-time application. The platform also provides the service of instant payouts, automatic reconciliation, and vendor out-boarding through a smooth B2B-friendly design.
• Stripe is another embedded finance platform that builds enhanced financial services for B2B clients. Online payments, capital access, fund generation, and card issuing are some of the other services the company delivers.

Key Players Working in the Embedded Finance Market

• Bankable
• Banxware
• Cross River
• Finix
• Flywire
• Resolve
• Parafin
• TreviPay
• Balance
• Stripe

Key Segments Covered

By Type:

• Embedded Banking
• Embedded Insurance
• Embedded Investments
• Embedded Lending
• Embedded Payment

By End User:

• Loans Associations
• Investment Banks & Investment Companies
• Brokerage Firms
• Insurance Companies
• Mortgage Companies

Key Regions Covered:

• North America
  • The United States
  • Canada
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Europe
  • Germany
  • The United Kingdom
  • France
  • Spain
  • Russia
  • Rest of Europe
• Japan
• Asia Pacific Excluding Japan
  • China
  • India
  • Malaysia
  • Singapore
  • Australia
  • Rest of Asia Pacific Excluding Japan (APEJ)
• The Middle East and Africa
  • GCC Countries
  • Israel
  • South Africa
  • The Middle East and Africa (MEA)

Table of Content

1. Executive Summary 1.1. Global Market Outlook 1.2. Demand-side Trends 1.3. Supply-side Trends 1.4. Technology Roadmap Analysis 1.5. Analysis and Recommendations2. Market Overview 2.1. Market Coverage / Taxonomy 2.2. Market Definition / Scope / Limitations3. Market Background 3.1. Market Dynamics 3.1.1. Drivers 3.1.2. Restraints 3.1.3. Opportunity 3.1.4. Trends 3.2. Scenario Forecast 3.2.1. Demand in Optimistic Scenario 3.2.2. Demand in Likely Scenario 3.2.3. Demand in Conservative Scenario 3.3. Opportunity Map Analysis 3.4. Investment Feasibility Matrix 3.5. PESTLE and Porter’s Analysis 3.6. Regulatory Landscape 3.6.1. By Key Regions 3.6.2. By Key Countries 3.7. Regional Parent Market Outlook4. Global Market Analysis 2018 to 2022 and Forecast, 2023 to 2033 4.1. Historical Market Size Value (US$ Million) Analysis, 2018 to 2022 4.2. Current and Future Market Size Value (US$ Million) Projections, 2023 to 2033 4.2.1. Y-o-Y Growth Trend Analysis 4.2.2. Absolute $ Opportunity Analysis5. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Type 5.1. Introduction / Key Findings 5.2. Historical Market Size Value (US$ Million) Analysis By Type, 2018 to 2022 5.3. Current and Future Market Size Value (US$ Million) Analysis and Forecast By Type, 2023 to 2033 5.3.1. Banking 5.3.2. Insurance 5.3.3. Investments 5.3.4. Lending 5.3.5. Payment 5.4. Y-o-Y Growth Trend Analysis By Type, 2018 to 2022 5.5. Absolute $ Opportunity Analysis By Type, 2023 to 20336. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By End User 6.1. Introduction / Key Findings 6.2. Historical Market Size Value (US$ Million) Analysis By End User, 2018 to 2022 6.3. Current and Future Market Size Value (US$ Million) Analysis and Forecast By End User, 2023 to 2033 6.3.1. Loans Associations 6.3.2. Investment Banks & Investment Companies 6.3.3. Brokerage Firms 6.3.4. Insurance Companies 6.3.5. Mortgage Companies 6.4. Y-o-Y Growth Trend Analysis By End User, 2018 to 2022 6.5. Absolute $ Opportunity Analysis By End User, 2023 to 20337. Global Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Region 7.1. Introduction 7.2. Historical Market Size Value (US$ Million) Analysis By Region, 2018 to 2022 7.3. Current Market Size Value (US$ Million) Analysis and Forecast By Region, 2023 to 2033 7.3.1. North America 7.3.2. Latin America 7.3.3. Europe 7.3.4. South Asia 7.3.5. East Asia 7.3.6. Oceania 7.3.7. MEA 7.4. Market Attractiveness Analysis By Region8. North America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 8.1. Historical Market Size Value (US$ Million) Trend Analysis By Market Taxonomy, 2018 to 2022 8.2. Market Size Value (US$ Million) Forecast By Market Taxonomy, 2023 to 2033 8.2.1. By Country 8.2.1.1. The USA 8.2.1.2. Canada 8.2.2. By Type 8.2.3. By End User 8.3. Market Attractiveness Analysis 8.3.1. By Country 8.3.2. By Type 8.3.3. By End User 8.4. Key Takeaways9. Latin America Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 9.1. Historical Market Size Value (US$ Million) Trend Analysis By Market Taxonomy, 2018 to 2022 9.2. Market Size Value (US$ Million) Forecast By Market Taxonomy, 2023 to 2033 9.2.1. By Country 9.2.1.1. Brazil 9.2.1.2. Mexico 9.2.1.3. Rest of Latin America 9.2.2. By Type 9.2.3. By End User 9.3. Market Attractiveness Analysis 9.3.1. By Country 9.3.2. By Type 9.3.3. By End User 9.4. Key Takeaways10. Europe Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 10.1. Historical Market Size Value (US$ Million) Trend Analysis By Market Taxonomy, 2018 to 2022 10.2. Market Size Value (US$ Million) Forecast By Market Taxonomy, 2023 to 2033 10.2.1. By Country 10.2.1.1. Germany 10.2.1.2. United Kingdom 10.2.1.3. France 10.2.1.4. Spain 10.2.1.5. Italy 10.2.1.6. Rest of Europe 10.2.2. By Type 10.2.3. By End User 10.3. Market Attractiveness Analysis 10.3.1. By Country 10.3.2. By Type 10.3.3. By End User 10.4. Key Takeaways11. South Asia Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 11.1. Historical Market Size Value (US$ Million) Trend Analysis By Market Taxonomy, 2018 to 2022 11.2. Market Size Value (US$ Million) Forecast By Market Taxonomy, 2023 to 2033 11.2.1. By Country 11.2.1.1. India 11.2.1.2. Malaysia 11.2.1.3. Singapore 11.2.1.4. Thailand 11.2.1.5. Rest of South Asia 11.2.2. By Type 11.2.3. By End User 11.3. Market Attractiveness Analysis 11.3.1. By Country 11.3.2. By Type 11.3.3. By End User 11.4. Key Takeaways12. East Asia Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 12.1. Historical Market Size Value (US$ Million) Trend Analysis By Market Taxonomy, 2018 to 2022 12.2. Market Size Value (US$ Million) Forecast By Market Taxonomy, 2023 to 2033 12.2.1. By Country 12.2.1.1. China 12.2.1.2. Japan 12.2.1.3. South Korea 12.2.2. By Type 12.2.3. By End User 12.3. Market Attractiveness Analysis 12.3.1. By Country 12.3.2. By Type 12.3.3. By End User 12.4. Key Takeaways13. Oceania Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 13.1. Historical Market Size Value (US$ Million) Trend Analysis By Market Taxonomy, 2018 to 2022 13.2. Market Size Value (US$ Million) Forecast By Market Taxonomy, 2023 to 2033 13.2.1. By Country 13.2.1.1. Australia 13.2.1.2. New Zealand 13.2.2. By Type 13.2.3. By End User 13.3. Market Attractiveness Analysis 13.3.1. By Country 13.3.2. By Type 13.3.3. By End User 13.4. Key Takeaways14. MEA Market Analysis 2018 to 2022 and Forecast 2023 to 2033, By Country 14.1. Historical Market Size Value (US$ Million) Trend Analysis By Market Taxonomy, 2018 to 2022 14.2. Market Size Value (US$ Million) Forecast By Market Taxonomy, 2023 to 2033 14.2.1. By Country 14.2.1.1. GCC Countries 14.2.1.2. South Africa 14.2.1.3. Israel 14.2.1.4. Rest of MEA 14.2.2. By Type 14.2.3. By End User 14.3. Market Attractiveness Analysis 14.3.1. By Country 14.3.2. By Type 14.3.3. By End User 14.4. Key Takeaways15. Key Countries Market Analysis 15.1. USA 15.1.1. Pricing Analysis 15.1.2. Market Share Analysis, 2022 15.1.2.1. By Type 15.1.2.2. By End User 15.2. Canada 15.2.1. Pricing Analysis 15.2.2. Market Share Analysis, 2022 15.2.2.1. By Type 15.2.2.2. By End User 15.3. Brazil 15.3.1. Pricing Analysis 15.3.2. Market Share Analysis, 2022 15.3.2.1. By Type 15.3.2.2. By End User 15.4. Mexico 15.4.1. Pricing Analysis 15.4.2. Market Share Analysis, 2022 15.4.2.1. By Type 15.4.2.2. By End User 15.5. Germany 15.5.1. Pricing Analysis 15.5.2. Market Share Analysis, 2022 15.5.2.1. By Type 15.5.2.2. By End User 15.6. United Kingdom 15.6.1. Pricing Analysis 15.6.2. Market Share Analysis, 2022 15.6.2.1. By Type 15.6.2.2. By End User 15.7. France 15.7.1. Pricing Analysis 15.7.2. Market Share Analysis, 2022 15.7.2.1. By Type 15.7.2.2. By End User 15.8. Spain 15.8.1. Pricing Analysis 15.8.2. Market Share Analysis, 2022 15.8.2.1. By Type 15.8.2.2. By End User 15.9. Italy 15.9.1. Pricing Analysis 15.9.2. Market Share Analysis, 2022 15.9.2.1. By Type 15.9.2.2. By End User 15.10. India 15.10.1. Pricing Analysis 15.10.2. Market Share Analysis, 2022 15.10.2.1. By Type 15.10.2.2. By End User 15.11. Malaysia 15.11.1. Pricing Analysis 15.11.2. Market Share Analysis, 2022 15.11.2.1. By Type 15.11.2.2. By End User 15.12. Singapore 15.12.1. Pricing Analysis 15.12.2. Market Share Analysis, 2022 15.12.2.1. By Type 15.12.2.2. By End User 15.13. Thailand 15.13.1. Pricing Analysis 15.13.2. Market Share Analysis, 2022 15.13.2.1. By Type 15.13.2.2. By End User 15.14. China 15.14.1. Pricing Analysis 15.14.2. Market Share Analysis, 2022 15.14.2.1. By Type 15.14.2.2. By End User 15.15. Japan 15.15.1. Pricing Analysis 15.15.2. Market Share Analysis, 2022 15.15.2.1. By Type 15.15.2.2. By End User 15.16. South Korea 15.16.1. Pricing Analysis 15.16.2. Market Share Analysis, 2022 15.16.2.1. By Type 15.16.2.2. By End User 15.17. Australia 15.17.1. Pricing Analysis 15.17.2. Market Share Analysis, 2022 15.17.2.1. By Type 15.17.2.2. By End User 15.18. New Zealand 15.18.1. Pricing Analysis 15.18.2. Market Share Analysis, 2022 15.18.2.1. By Type 15.18.2.2. By End User 15.19. GCC Countries 15.19.1. Pricing Analysis 15.19.2. Market Share Analysis, 2022 15.19.2.1. By Type 15.19.2.2. By End User 15.20. South Africa 15.20.1. Pricing Analysis 15.20.2. Market Share Analysis, 2022 15.20.2.1. By Type 15.20.2.2. By End User 15.21. Israel 15.21.1. Pricing Analysis 15.21.2. Market Share Analysis, 2022 15.21.2.1. By Type 15.21.2.2. By End User16. Market Structure Analysis 16.1. Competition Dashboard 16.2. Competition Benchmarking 16.3. Market Share Analysis of Top Players 16.3.1. By Regional 16.3.2. By Type 16.3.3. By End User17. Competition Analysis 17.1. Competition Deep Dive 17.1.1. Stripe, Inc. 17.1.1.1. Overview 17.1.1.2. Product Portfolio 17.1.1.3. Profitability by Market Segments 17.1.1.4. Sales Footprint 17.1.1.5. Strategy Overview 17.1.1.5.1. Marketing Strategy 17.1.2. PAYRIX 17.1.2.1. Overview 17.1.2.2. Product Portfolio 17.1.2.3. Profitability by Market Segments 17.1.2.4. Sales Footprint 17.1.2.5. Strategy Overview 17.1.2.5.1. Marketing Strategy 17.1.3. Cybrid Technology Inc. 17.1.3.1. Overview 17.1.3.2. Product Portfolio 17.1.3.3. Profitability by Market Segments 17.1.3.4. Sales Footprint 17.1.3.5. Strategy Overview 17.1.3.5.1. Marketing Strategy 17.1.4. Walnut Insurance Inc. 17.1.4.1. Overview 17.1.4.2. Product Portfolio 17.1.4.3. Profitability by Market Segments 17.1.4.4. Sales Footprint 17.1.4.5. Strategy Overview 17.1.4.5.1. Marketing Strategy 17.1.5. Lendflow 17.1.5.1. Overview 17.1.5.2. Product Portfolio 17.1.5.3. Profitability by Market Segments 17.1.5.4. Sales Footprint 17.1.5.5. Strategy Overview 17.1.5.5.1. Marketing Strategy 17.1.6. Finastra 17.1.6.1. Overview 17.1.6.2. Product Portfolio 17.1.6.3. Profitability by Market Segments 17.1.6.4. Sales Footprint 17.1.6.5. Strategy Overview 17.1.6.5.1. Marketing Strategy 17.1.7. Zopa Bank Limited 17.1.7.1. Overview 17.1.7.2. Product Portfolio 17.1.7.3. Profitability by Market Segments 17.1.7.4. Sales Footprint 17.1.7.5. Strategy Overview 17.1.7.5.1. Marketing Strategy 17.1.8. Fortis Payment Systems, LLC 17.1.8.1. Overview 17.1.8.2. Product Portfolio 17.1.8.3. Profitability by Market Segments 17.1.8.4. Sales Footprint 17.1.8.5. Strategy Overview 17.1.8.5.1. Marketing Strategy 17.1.9. Transcard Payments 17.1.9.1. Overview 17.1.9.2. Product Portfolio 17.1.9.3. Profitability by Market Segments 17.1.9.4. Sales Footprint 17.1.9.5. Strategy Overview 17.1.9.5.1. Marketing Strategy 17.1.10. Fluenccy Pty Limited 17.1.10.1. Overview 17.1.10.2. Product Portfolio 17.1.10.3. Profitability by Market Segments 17.1.10.4. Sales Footprint 17.1.10.5. Strategy Overview 17.1.10.5.1. Marketing Strategy18. Assumptions & Acronyms Used19. Research Methodology