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Embedded finance , the integration of financial services such as payments , lending or collections , into nonfinancial platforms or applications , is the fastest growing trend in the FinTech industry . With the platforms operating these products ranging from online retailers to customer loyalty apps , accounting software or transport providers , embedded finance is bringing convenience , speed and economy to consumers and businesses across many of the services they use daily .

The research reveals that amid a wide range of financial concerns and a mixed level of satisfaction in the products and services provided by their banks , SMEs are increasingly using embedded financial services . Of the 43 % of SMEs that have used at least one embedded financial service in the last 12 months , improved customer service is the biggest benefit ( cited by 40 %), followed by improved cash flow ( 38 %), getting paid faster and increased sales ( both 34 %). SMEs also claim to benefit from embedded finance products through more efficient internal operations ( 31 %), a reduced amount of money spent on bank fees ( 27 %), faster customer onboarding ( 25 %) and time saved on financial admin ( 24 %).

The study reveals that younger SME decision-makers are much more likely to be using embedded finance products , with 78 % of respondents aged 18 – 34 having done so in the past year compared to 46 % of those aged 35 – 54 and just 16 % of those aged 55 or over . Similarly , two-thirds ( 65 %) of those aged 18 – 34 plan to use them more in the next 12 months , compared to 42 % of those aged 35 – 54 and just one in five ( 19 %) of those aged 55 or over .

Jon Davies , Research Director , TechMarketView , said : “ Embedded finance is redefining how customers use financial services , and this is just as true for SMEs as it is for consumers , who increasingly don ’ t interact directly with a bank for many of the financial services they use day-to-day .

“ The end-user may not be aware of it , but the bank can still be capturing a lot of the value of these services in the background . To stay relevant , banks are investing in modern technology platforms that enable them to adapt and take advantage of the new business models and market opportunities .”

Robert Wint , Senior Product Director , Temenos , said : “ To deliver embedded finance requires banking processes such as deposits , loans and Paymentsas-a-Service from specialist cloudbased API platforms that use a licensed bank ’ s secure and regulated infrastructure . This new Banking-asa-Service model is gaining popularity worldwide with almost 40 % of banks currently pursuing or considering pursuing a BaaS strategy .” �

THE STUDY

REVEALS THAT YOUNGER SME DECISION-MAKERS ARE MUCH MORE LIKELY TO BE USING EMBEDDED FINANCE PRODUCTS .