In a relatively short period of time embedded finance has become a genuinely disruptive force in countless industries. Thanks to its ability to unlock innovation and enable any company to offer bank-like services, embedded finance has been embraced across the world.

Thanks to a combination of positive developments, including growing online sales and improving API solutions, the embedded marketplace is booming. Putting an exact figure on the future size of the embedded finance ecosystem is an extremely difficult task with several consultancies having significantly different forecasts.

According to forecasts by Future Market Insights, the global embedded finance market is expected to continue its strong development and register annual growth of more than 16% over the next decade. Valued at $54.3 billion in 2022, the market is on track to reach $248.4 billion by 2032.

However, a PYMNTS and FISPAN survey reports that embedded finance will reach a $7 trillion value in ten years. When it comes to a regional breakdown, the US market remains dominant and is expected to increase from $22.5 billion in 2020 to $230 billion by 2025, according to Statista data.

In Asia Pacific the embedded finance market is projected to total $358 billion by 2029 at a growth rate of over 24% per year. The European market is on course to grow from more than $42 billion in 2022 to $121 billion in 2029, with the UK accounting for a large share of this figure.

Intense competition

German-based lemon.markets is one of the companies that recently raised €15 million to support the launch of its product that gives non-financial firms the ability to offer stock trading services.

Synovus Bank in the US has already created a money-as-a-service offering that joins together payment processing, banking and lending solutions. Berlin-based Banxware bills itself as the “future of business ending” and offers a lending-as-a-service solution for firms.

More established firms, such as OpenPayd that was founded in 2015 and offers banking-as-a-service, also play a vital role in the marketplace.

Looking forward, embedded payments, embedded lending and embedded insurance will remain the strongest areas of the industry. In lending, buy-now-pay-later (BNPL) is enabling consumers and businesses alike to access credit that suits them, with Klarna and Clearpay leading the sector.

Embedded insurance is rapidly growing thanks to the convenience it offers to users, who no longer need to spend lots of time deciding which insurance product to use, with the right insurance being offered at the point of purchase, whether a TV, car or train ticket is being bought. A report by InsTech London forecasts embedded insurance to be valued at as much as $722billion by 2030. A large element of the sector is related to embedded payments, with instant payments being possible at the touch of a button.

New innovative embedded finance firms are being founded on an almost daily basis. There’s no shortage of embedded finance start-ups that are gaining often substantial investments from investment funds.

Want to hear more about embedded finance? 

You can’t miss out the next edition of FTT Embedded Finance & Super Apps taking place in London on 13th May 2025 and as part of the FTT Fintech Festival on 11th – 12th November 2024 at The Brewery, London. Save the dates!   

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Written by Finbarr Toesland, Editorial Contributor, VC Innovations