Embedded Finance

How FIs plan to deal with embedded finance, crypto, DeFi and the metaverse

  • Embedded finance, cryptocurrencies, the Metaverse and DeFi are influencing the direction of financial products.
  • Around 80% of senior executives from FIs and non-FIs expect these four trends to impact their business and are applying various strategies to deal with them.

Email a Friend

How FIs plan to deal with embedded finance, crypto, DeFi and the metaverse

Amid dealing with a challenging economic climate, senior executives are also keeping up with tech innovations for new opportunities. For now, they may be dealing with inflation and layoffs for recession-proofing. But for future-proofing, new innovations are non-negotiable. 

Embedded finance, cryptocurrencies, the Metaverse and DeFi are four innovations most senior executives are zoning in on. Over the next 12 months, around 80% of FI and non-FI executives expect these four trends to affect the way they do business. FIS surveyed 2,000 senior executives in both sectors to find out their views and strategies. Here are the key takeaways.

Embedded finance

Embedded finance is increasingly blurring the lines between Trad-Fi and non-FI products and services. The study found that 83% of financial executives and 84% of non-financial executives believe embedded finance will impact their business operations within the next 12 months. 31% of FI executives said implementing it would change their sales and distribution models, while 29% of non-FIs believed it would ‘increase their operating costs.’ 

According to John Stuckey, Senior Director of Product – Retail Solutions at FIS, FIs and non-FIs are motivated by different objectives. “Financial institutions are looking for new revenue streams while non-FIs are looking to increase the value they bring to their customers and to enhance their services.”

For FI executives, the predominant strategies are to hire skilled people (24%), purchase new technology (24%), and increase their technology budget (24%). Non-FI executives, on the other hand, plan to build new technology (31%), increase their tech budgets (31%), and partner with third-party service providers (24%). 

Strategies FI executives are adopting to deal with embedded finance, crypto, DeFi and the metaverse


In the wake of Operation Choke Point 2.0 – where government regulation is trying to make crypto a no-go zone for traditional finance – most FI and non-FI executives are conflicted when it comes to crypto. Only a third (32%) of FI executives have no interest in developing any kind of cryptocurrency services, 8% plan on developing crypto products within the next 12 months, and the rest are mute. Or are they?

One sneaky but smart strategy is taking the sandbox approach. According to Francisco Palminha, FIS' Crypto Product Strategist, some FIs are applying a sandbox approach towards regulation. They are experimenting with cryptocurrencies and blockchain technology in controlled environments or test networks. The plan is to understand the benefits, risks, and potential hurdles before fully integrating these technologies into their systems.

For non-FI executives, almost half (49%) say their customers are asking to pay with cryptocurrencies. But most companies that are into crypto are only using it for investments or returns rather than for payments. Their predominant strategies for the next 12 months are to build more tech (25%), hire skilled people (24%), and seek partners to add tech capabilities (23%). 

Strategies non-FI executives are adopting to deal with embedded finance, crypto and the metaverse

The Metaverse

While many businesses lost their shirts in 2022, luxury brands such as LVMH, Gucci, and Burberry boosted their sales riding the Web3 NFT wave. It makes sense 85% of senior executives in tech companies believe it will be strategically important to have a presence in the Metaverse. 

Most FI executives (83%) say that venturing into the so-called “Ether” will improve their brand image and increase their competitive advantage. And 83% of non-financial executives believe it will change their operations, mainly their sales and distribution models. 

The most popular strategies among FI executives are to build new tech (38%) and hire more skilled people (38%). Non-FI executives will increase their R&D budgets (35%), hire skilled people (29%), and build new technologies (25%).


While non-FIs did not feature in this segment, FI executives had strong feelings about the subject. The report defines DeFi as using “blockchain and digital asset technologies to manage financial transactions.” The term is frequently referred to as an alternative financial system independent of traditional financial institutions, which explains why some FI execs might feel threatened.

30% of FI executives plan to hire more knowledgeable people, 29% plan to purchase new technology, and 24% will look for partners with tech capabilities. However, opportunity waits for no one. Last year, fintechs like Robinhood launched a non-custodial DeFi wallet with no fees – and we’ll see how that works out. 

0 comments on “How FIs plan to deal with embedded finance, crypto, DeFi and the metaverse”

Embedded Finance

Do US super apps stand a chance in today’s embedded finance landscape?

  • Super apps are particularly hard to build in the US financial ecosystem, which is very different from financial systems in other parts of the world.
  • Given embedded finance has snowballed over the last few years, is now the right time for super apps in the US market?
Sara Khairi | January 30, 2023
Embedded Finance

How the role of partnerships is changing in the embedded finance ecosystem

  • Executives from Shopify, Upgrade, Fiserv, Synchrony, Cross River, and GlossGenius shed light on the scale of the opportunity and evolving partnerships in the embedded finance space, at Tearsheet's 'The Big Bank Theory' Conference.
  • Many players are already offering embedded finance solutions, and brands are actively looking for new ways of embedding financial services into their offerings. However, as the market expands, it all comes down to evolving and embracing different integration models that locate and resolve pain points for end-consumers as well as merchants.
Sara Khairi | January 12, 2023
Embedded Finance, Member Exclusive

Embedded Briefing: Mapping the largest credit card-as-a-service providers

  • Fintechs are reimagining corporate cards and how businesses can manage their expenses, while others focus on issuing white-label consumer cards. But all of this takes partnering with banks and technology providers.
  • There are many providers of such services on the market currently. We take a look at a couple of the biggest players in this space.
Iulia Ciutina | January 10, 2023
Embedded Finance, Member Exclusive

Embedded Briefing: TreviPay acquires Apruve to expand B2B payments offering

  • B2B payments solutions provider TreviPay acquired Apruve to expand its product offerings and reach new geographies.
  • TreviPay's current offerings include technologies enabling the order-to-cash flow, and specialized payment networks for businesses of all sizes.
Subboh Jaffery | December 27, 2022
Embedded Finance, Member Exclusive

Embedded Briefing: The growing value proposition of embedded finance across industries

  • Changing demographics and behavior, increasing internet penetration, technological advances, and growing trust in the digital ecosystem is helping make embedded finance the norm among consumers.
  • Embedded finance can serve to benefit the entire financial value chain, from banks, to brands, governments, and consumers.
Subboh Jaffery | December 13, 2022
More Articles