Embedded finance refers to integrating financial products and services in the value chain of a non-financial company’s services stated Bahaa Abdul Hussein. Embedded wealth is an extension of embedded finance and would offer integrated wealth and investment services. Embedded wealth is likely to be a disruptor and is definitely going to be the future of personal finance.
All about Embedded Wealth Management
The size of the embedded finance industry globally would cross 83 billion dollars in 2023. Embedded wealth has a potential of bringing in up to 33 trillion dollars of assets. It is also estimated that embedded wealth can bring up to 100 billion dollars in fees for the provider. Embedded wealth involves non-financial players offering wealth management services to their customers.
Through embedded wealth, a non-financial company can offer investment products for their customers. B2B platforms are available in the form of APIs that can be used by companies and integrated into their services. When embedded wealth services are offered, companies are essentially encouraging their customers to invest their money rather than spending.
The following are some use cases where embedded wealth services are being offered:
Health insurance
Health insurance providers have customers who use their services to obtain health insurance. Wealth management services can be embedded along with their insurance services and offered to their customers. It is a value-adding proposition that blends well with their existing services.
Digital banks
A large number of digital banks have come up that offer online-only services to clients. Apart from banking services, it is natural for them to offer allied services like wealth management. Digital banks are unlikely to have the expertise to offer wealth management. Offering embedded wealth management is a natural option.
Super apps
A super app is an omnibus service that offers a range of products and services for their customers. They do offer financial services, so it is natural to extend it to include wealth management.
Retailers
Leading retail companies are already offering wealth management services as an embedded service for their customers. They have partnered with fintech firms to offer these services to their clients.
The potential for embedded wealth services is high, which is why companies are already offering these services to clients. In the near future, more and more companies will start offering these services to add value to their customers. Asset managers and other investment professionals have created wealth management platforms. Businesses can easily embed these platforms into their services.
The blog has been authored by Bahaa Abdul Hussein and has been published by the editorial board of Fintek Diary. For more information, please visit www.fintekdiary.com.
