Embedded finance: challenging common assumptions
“Every company will be a fintech company”.
This phrase was spoken 4 years ago, from Angela Strange, general partner at Andreesen Horowitz, a legendary Valley VC firm. She was mainly referring to payments embedded mainly in market places but at this same speech, she introduced how this will evolve in small loans, mortgages, cards etc.
A market which would presumably reach $50bil in 2023, has achieved that target already by 2022 and is growing double-digit every year, regardless the slow down of the fintech industry investments. A quarter of a trillion will be the market size by 2030 and this is huge.
Put simply, embedded finance is the placing of a financial product in a nonfinancial customer experience, journey, or platform. In itself, that is nothing new. For decades, non-financial institutions have offered financial services via private-label credit cards at retail chains, supermarkets, and airlines. The difference now is that the methodology is streamlined, there are many tools and automations allow for an amazing customer experience, a key point in the process and its adoption.
For embedded finance, an operator is needed (a retailer, a utility, a telco, a marketplace etc), a licensed institution which is most probably offering Banking-as-a service and a tech company which integrates all these and focuses on the experience.
We at FUND4ALL, want to touch this last part. We want to offer amazing fintech to the operators and enhance their user experience. With products like BUILT-OPERATE-TRANSFER or product and strategy development project management, we want to support operators in embedding finance without de-focusing from their main business. They shall do what they know and we shall do what we know and in the meantime share the risk.