The Evolution of Embedded Finance

Embedded finance has become popular today with many businesses offering embedded finance services observed Bahaa Abdul Hussein. How did embedded finance actually evolve? Let’s look at the answer to this question and get a historical perspective of embedded finance.

Among the various buzzwords in the world of finance, ‘embedded finance’ is prominent. Embedded finance is essentially non-finance companies offering financial services to their customers. Some of the examples of embedded finance services include loans, payments, accounts, wallets, and even investments.

Embedded finance is not new. It has been in existence from some time. It was the COVID pandemic that accelerated the rise of embedded finance. Today, embedded finance has become a part of the world of finance. Many companies have realized the importance of embedded finance and have heartily embraced it. It would be interesting to look at the history of embedded finance to know how it evolved. Here is a historical perspective:

  • Embedded finance has been offered by companies from quite some time. For example, airlines have been offering cards and loyalty programs for their customers for long. This is an instance of a finance-related service offered by a non-finance company.
  • Banks used to offer financial services for a long time and had a virtual monopoly. Things changed at the start of the 21st century thanks to the arrival of startups. Young companies began to come out with innovations and started to use technology in a big way. This is how embedded finance became a reality with fintech firms getting into the act.
  • Initially, the banks were unsure about how this would work and even tried to fight back. Later, banks realized the need to partner with such firms. It soon led to the evolution of open banking, where third parties could access banking data to offer services. Banks and fintech firms are now collaborating to make embedded finance successful.
  • Businesses from various sectors began to realize that embedded finance allows them to directly offer finance services to their clients without having to use a visible third party. The collaborator would be invisible and the process seamless. This feature made embedded finance advantageous.
  • The evolution of technology and constant innovations have made it easy for companies to partner with fintech firms to offer embedded financial services.


By 2030, it is expected that the market for embedded finance would be worth 588 billion dollars. There is no doubt that embedded finance has taken off and is going to grow faster in the days to come. 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


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