The new research suggests transaction value of embedded finance will double in the US to $7 trillion by 2026, redefining how consumers and businesses build and manage relationships with financial services
Embedded finance has potential for explosive growth. Source: Shutterstock
The research from Bain & Company and Bain Capital forecasts enormous revenue opportunities for embedded finance software platforms and enabling infrastructure providers. These revenues may soar to $51 billion in 2026.?
The study predicts payments and lending will continue to be the two biggest segments of embedded finance. Today, consumer payments account for more than 60% of all embedded finance transactions. They are expected to reach $3.5 trillion by 2026.?
Meanwhile, embedded finance-driven business lending is projected to grow fivefold over the next five years. It might grow from $200 million in 2021 to $1.3 billion by 2026, thanks to the rise of new specialist providers.?
In addition, the research identifies digital-first organisations, especially platform businesses, as the ones which can take the best advantage of the embedded finance sector’s expansion. Their access to more sophisticated technologies, algorithms and data gives them an edge in targeting the most creditworthy customers.?
On the contrary, embedded finance presents a major challenge to traditional financial institutions with legacy technologies. However, Bain argues, there is still a significant opportunity for them to use embedded finance, rethink their core business and drive growth through new services.
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Nina Bobro
Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.
