If the FinTech “revolution” that has emerged since the financial crisis is still young, embedded finance is “in its first inning.”
As traditional financial institutions and FinTechs work together to give everything from bank accounts to lending products to a larger audience through digital channels, Matthew Valente, head of product strategy at FIS, claims that we are only at the very beginning of this process.
Valente clarified the distinctions between embedded finance and baaS, which many observers could have confused. In his words: “Embedded finance is the genuine “experience” provided to the individual consumer or company client, whereas banking as a service is the “enabler” of embedded finance.
A Natural Evolution
He said, “We’re seeing a change in embedded finance.
Uber may be one of the forerunners in terms of how to smoothly include payments into the customer experience, but Valente said that restaurants, software platforms, and shops have all been adopting the practise. According to Valente, banks have become increasingly interested in providing BaaS, especially those that employ FIS as a service.
He asserted that the current economic headwinds won’t prevent the emergence of BaaS and embedded finance. Both large and small organisations are generally updating their investment plans for the upcoming year. But as Valente pointed out, there is a demand, therefore expanding financial services, payments, and loans will be on their to-do lists.
