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Redefining Financial Services with Embedded Finance

March 06, 2024

  • Additiv
  • APIs
  • customer services

By Anurag Pandey, General Manager and Head, Asia Pacific at additiv

The financial services landscape is undergoing a significant transformation. The traditional model, where manufacturing and distribution were tightly integrated, is giving way to a new paradigm driven by embedded finance. This shift isn’t just a passing trend; it’s a fundamental change aimed at democratizing financial services and promoting inclusivity.

Consumer-Centric Revolution

Embedded finance is reshaping how financial services are delivered. It goes beyond incremental innovation,

Anurag Pandey, General Manager and Head, Asia Pacific at additiv

fundamentally restructuring the industry by offering services in new and non-traditional channels. This revolution is fueled by consumer demand for cost-effective, trustworthy, and engaging financial solutions, as highlighted by our recent consumer study[1], capturing insights from 4,500 individuals across 10 countries around online financial services.

Just 40% of consumers sought professional investment advice in the last year, with a staggering 69% expressing interest in receiving such advice moving forward. Historically, services like wealth management and investment advice were accessible to only a select few. However, technology has the potential to democratize these crucial financial services, making them more accessible and inclusive, whether through fully digital platforms or a hybrid approach.

How Consumers Access Financial Services

Historically, banks have enjoyed significant levels of trust, a trend reaffirmed by our survey findings. However, there’s a notable shift in consumer trust towards non-financial providers offering financial and investment services. On average, one out of every two consumers express trust in super-apps, eCommerce platforms, retailers, telecoms, and utilities providers to serve as their financial service providers. This indicates a broadening landscape for embedded financial services, welcoming participation from various non-financial brands.

Costs, trust, and distribution channels are pivotal factors shaping the future of the financial services value chain. The data underscores the importance of transparency and customer-centricity in integrating financial services into rich ecosystems, ensuring mobility and choice for consumers.

The Power of Finance-as-a-Service

To democratize financial services, it’s essential to establish an architecture that seamlessly embeds the right mix of products exactly when they’re needed. This involves orchestrating ecosystems that promote competition, drive down costs, and widen access. Achieving this requires highly efficient and scalable business models that overcome traditional barriers to service provision.

Finance-as-a-Service (FaaS) is the core infrastructure of embedded finance, enabling seamless integration of financial services into diverse platforms. This infrastructure, powered by APIs, cloud and digital technologies, facilitates the repackaging of financial products to resonate with modern consumer expectations at their point of need.

Coop Finance+ exemplifies the potential of embedded finance in action. By leveraging strategic partnerships with regulated financial services providers orchestrated by additiv’s platform, Coop, Switzerland’s largest retailer, has seamlessly integrated comprehensive banking, investment, and retirement solutions into its retail offerings, enhancing accessibility and affordability for a broader audience. Coop’s strategic partnerships exemplify the potential to leverage retail footprints for financial service distribution, marrying convenience with financial empowerment.

Embracing the Future of Finance

The future of finance lies in collaboration and innovation. Financial services must break free from traditional confines, embedding themselves into the fabric of consumers’ lives with a commitment to accessibility, affordability, and relevance. This collaborative approach benefits both non-financial brands and established financial providers. For non-financial brands, there is the opportunity to provide new value-added services for their customers. Meanwhile, established financial providers can tap into new markets, new customer segments and new, more efficient distribution channels, accessing much more holistic information about consumer activities and preferences.

In conclusion, embedded finance is not just a vision; it’s a reality reshaping the financial services value chain. By embracing this paradigm shift, industry players can deliver enhanced financial experiences that cater to the diverse needs of consumers.

[1] Embedded Finance Consumer Study 2024: How consumers access financial services, by additiv and Ipsos –


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