Countries Covered: USA, UK, Australia, New Zealand.
Publication Date: 24/01/2024
Questions Covered in the Report:
- What are the main areas of embedded finance globally?
- What is the projected global payment volume in the embedded finance market by 2025?
- How is AI utilized in embedded finance, and what benefits and risks does it pose?
- What challenges does embedded finance face in the future?
- What is the projected market size of embedded finance in Europe by 2028?
Embedded finance payment volume is set to cross the EUR 6 trillion milestone globally by 2025: New yStats.com report
AI is driving enhanced customer experiences in the embedded finance sector
Embedded finance, encompassing various sectors, is witnessing rapid adoption, presenting a transformative shift in the way financial services are accessed and delivered globally. Despite the promising trajectory, the sector faces barriers rooted in uncertainty. Challenges such as risks associated with departing from established business models, apprehensions about self-competition, and the complexities of collaborations stand as obstacles to widespread adoption. Yet, these challenges also present opportunities for innovation, with technology playing a crucial role in shaping the future of embedded finance.
Artificial Intelligence (AI) emerges as a game-changer within the embedded finance sector, offering enhanced customer experiences, robust risk management, and effective fraud detection. Major platforms globally are already leveraging AI to streamline operations. However, the integration of AI introduces its own set of challenges, including transparency issues, security concerns, and risks on legal, operational, and reputational fronts.
The U.S. leads the global revenue race in embedded finance
The global embedded finance market is set to exceed EUR 6 trillion in payments by 2025, with the U.S. alone generating over EUR 20 billion in 2022. Fintech platforms envision a non-financial future, with around three-quarters expecting most financial products offered outside traditional channels. Consumer retail leads sector support at 95%, followed by telecom and healthcare. Regionally, Europe eyes significant growth, targeting more than EUR 150 billion by 2028, while the Asia-Pacific region aims for more than double that number by 2024. Notably, data security emerged as a top concern in Europe in April 2023.