Embedded Finance, Member Exclusive

Embedded Briefing: What’s driving the embedded finance boom?

  • Bain & Company estimates that the embedded finance industry will swell up to $7 trillion in transactions by 2026, up from $2.6 trillion in 2021.
  • Payments, lending, and banking were found to be the key drivers of the embedded finance boom. In the future, embedded insurance, tax, and accounting are poised for significant growth.
close

Email a Friend

Embedded Briefing: What’s driving the embedded finance boom?

Embedded finance is changing how finance is done by adding a key new stakeholder to the process: the customer. With the prevalence of embedded solutions across finance functions like payments, lending, and card programs, the face of the financial services industry is changing. New players are occupying the big seats, and incumbents are working on redefining themselves.

A new report by Bain & Company provides a good look into the industry. It charts down the growth in embedded over the last year, details what’s powering it, and provides an outlook for the future. In today’s briefing, let’s go over what the report found.

Embedded finance is changing how finance is done by adding a key new stakeholder to the process: the customer. With the prevalence of embedded solutions across finance functions like payments, lending, and card programs, the face of the financial services industry is changing. New players are occupying the big seats, and incumbents are working on redefining themselves.

A new report by Bain & Company provides a good look into the industry. It charts down the growth in embedded over the last year, details what’s powering it, and provides an outlook for the future. In today’s briefing, let’s go over what the report found.

In 2021, embedded financial experiences accounted for 5% of the total transactions in America, at $2.6 trillion. By 2026, Bain & Company expects that figure to rise above $7 trillion, or over 10% of total US transactions.

Of all the subcategories in embedded finance, payments, lending, and banking are spearheading its boom. Platforms enabling embedded payments, B2B and consumer-grade, collected about $14 billion in revenues last year, while embedded lending providers across businesses and consumers scooped up $6 billion. By 2026, payments are forecasted to generate about $20 billion in revenues, and lending about $13 billion.


This content is available exclusively to Tearsheet Outlier members.

Tearsheet Outlier information and signup Missing out? Subscribe today and you’ll receive unlimited access to all Tearsheet content, original research, exclusive webinars and events, member-only newsletters from Tearsheet editors and reporters and much more. Join Outlier now — only $49/mo. Already an Outlier member? Sign in to your account

1 comments on “Embedded Briefing: What’s driving the embedded finance boom?”

Outlier OpinionsMakers

Data Snacks, Member Exclusive

Data Snack: The dawn of bank branch 2.0?

  • The ‘death of the branch’ saga was all the rage back in 2020.
  • But now, with back-to-routine vibes emerging, it’s time to re-evaluate the role of a bank branch.
Rivka Abramson | December 05, 2022
Data Snacks, Member Exclusive

Data Snack: Millennial retail traders rise during the bear market

  • Millennials opened 46% of all new retail trading accounts in the first half of 2022, according to DriveWealth’s Global Investor Report.
  • The ability to invest with small dollar amounts was the most frequently cited motivator to start investing.
Lindi Miti | December 01, 2022
Green Finance, Member Exclusive

Green Finance Briefing: The stroll to zero – finance has a long way to go

  • At COP27, there were no commitments to phase down or reduce fossil fuel use in the final overarching deal, and there was no breakthrough in the rules of finance either.
  • GFANZ faces a serious question: what is the purpose of a net-zero alliance when members are allowed to continue investing in fossil fuel expansion?
Iulia Ciutina | November 30, 2022
Embedded Finance, Member Exclusive

Embedded Briefing: SMB servicing presents strong potential for embedded finance

  • Across the US, UK, and Europe, the SMB embedded finance market presents a $110 billion opportunity.
  • SMBs are demanding easier access to capital, simplified financial management, and card issuing capabilities.
Subboh Jaffery | November 29, 2022
Blockchain and Crypto, Member Exclusive

Bankchain Briefing: FTX — implications, impact, and the way forward

  • In the aftermath of FTX, the crypto world seems to be in disarray.
  • Where do we go from here?
Ismail Umar | November 28, 2022
More Articles