What is Embedded Finance and why does it create a new $7 Trillion market opportunity?

Slides from my latest conference presentation, to a banking audience, are here: Embedded Finance - $7 Trillion market opportunity

There are 10 Key Messages:


1.) The current financial system is not fit for purpose. On the customer side: huge gaps between what's needed by humanity and what's offered.
2.) On the supply side (banks and insurers): unsustainable, out-of-date business models (delivering zero/negative Economic Profit on average, exacerbated further by Covid digital acceleration/disruption), need for urgent re-juvenation.
3.) Huge development in the capabilities of financial technology (new technical innovation platform, to complement cloud, mobile, internet)
4.) Any company can now harness #fintech to embed innovative and compelling financial service components or solutions (of any kind - payments, credit, savings, insurance, investments) into their propositions and customer experiences, as native components or add-ons - quickly, cheaply; testing and iterating fast.
5.) Very tangible benefits for companies of all types, across all sectors - new levels of customer retention, engagement and/or new high margin revenue streams.
6.) BIG market opportunity for those who enable embedded finance - startups, techcos, or incumbent banks/insurers/WMs. Potentially worth double the value of the Top 30 financial institutions today.
7.) Key Battlegrounds/Control Points are: 1.) Digital Wallets, 2.) Dev Platform Intermediaries/Neo-aggregators, 3.) Open Banking data.
8.) Increased competition among fintech infrastructure suppliers (BaaS/IaaS etc etc) - robust APIs not enough. Opportunities in full managed service partnerships with brands.
9.) Incumbent (bank/insurer) best practice from around the world: create separate BU's or ventures to play in this market (ensure they also drive demand for the core business to increase value capture potential).
10.) 9 critical success factors for incumbents (techcos, banks, insurers, wealth managers) to check against (very few comply today): an ambidextrous organisation is the No. 1 foundational requirement for effective execution and business model re-juvenation.

Every company needs an Embedded Finance strategy - what's your's?

More on the $3 Trillion Embedded Insurance market opportunity specifically here: https://lnkd.in/dmij3f5

#openbanking #baas #bankingasaservice #platformstrategy #digitalecosystems #apis #newgrowthplaybook #digitaltransformaton #corporateventuring #corporateinnovation #embeddedinsurance

 

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