Reshaping APAC Markets with Embedded Finance

Embedded finance is a major trend among APAC businesses that is being integrated into different non-financial use cases with the aim of developing user-friendly platforms.

FREMONT, CA: Embedded finance, or the integration of financial services into non-financial businesses, is a major trend reshaping business landscapes. In this regard, Asia Pacific (APAC) stands out as one of the regions that can significantly benefit from this transformative trend.

Until recently, companies had to develop their financial technologies, which took years and gigantic investments to build. However, the new financial integration capability called embedded finance greatly eases the process, helping businesses to develop platforms to digitally offer financial services to their customers.  

Landscape of Embedded Finance

In the landscape of embedded finance, there is a clear hierarchy as lending is leading the way with the highest evaluation, followed by deposits and at last, payments. Within embedded lending, small and medium-sized business (SMB) lending particularly stands out, boasting a market value of over 100 billion USD.   

Market Scenario

Embedded finance has the potential to transform the financial landscape of APAC. It can stream the work process of APAC's digital technology and software providers. Major financial institutions are acknowledging the potential of embedded finance and are investing in different financial verticals such as embedded issuing, lending and payments. Companies are further building partnership chains with financial institutions, fintechs, and platform providers to bring growth opportunities and cost efficiency to the market.

Enhancing Customer Experience

In response to increasing demand for more user-friendly solutions, traditional banks and other platforms are adopting modernised embedded financial services in order to stay competitive in an ever-growing field. Banks are now more dedicated to improving their financial services and offerings that help them stand out from their competitors.

Integration of banking services to non-financial platforms enhances customer experience, providing additional services that can transform how customers interact with platforms. These platforms include healthcare, e-commerce apps, and food delivery services that encourage expansion into entirely different customer segments. This enabled seamless payment flow within the use cases like payroll automation software, integration of e-wallets, and subscription-based payments. 

Adapting to challenges for success     

The emergence of new technologies gives rise to responsibilities and challenges that companies need to efficiently navigate, particularly in key areas such as data privacy, regulatory requirements, and brand salience.

Industry players recognise the embedded finances’ capability to maximise profit while providing customers with an enhanced platform-use experience. With its additional abilities of simplifying the provision of financial services and seamless integration into non-financial platforms, it continues to transform APAC businesses.