How is Embedded Investing Disrupting Fintech?

Shaily Shah
January 17, 2023
800 Mins
How is Embedded Investing Disrupting Fintech?

Embedded investing apart of Embedded finance, allows financial institutions and non-financial companies, such as banks, insurance companies and other businesses, to offer investment products and services as part of their existing product suite. This allows customers to access a wide range of financial products and services through a single platform, without having to open multiple accounts or switch between different providers. Companies looking to launch investment products as a part of their offerings can do so through integration with the company offering infrastructure for embedded investing such as Tarrakki.

It is expected that embedded finance will continue to grow as more companies and financial institutions adopt this model to offer a wider range of financial services and products to their customers. The growth of embedded finance is driven by several factors such as the increasing demand for digital financial services, the growing popularity of open banking and the increasing use of APIs (Application Programming Interfaces) to integrate financial services into existing platforms.

Predictions for the revenue potential of embedded finance in India vary, but many industry experts believe it has the potential to be a significant source of revenue growth. According to a report by KPMG, the embedded finance market in India could reach$1 trillion by 2030. Another report by Deloitte estimates that embedded finance in India could generate as much as $1.2 trillion in annual revenue by 2025,driven by the growing digital adoption and the increasing focus on financial inclusion.

One way that embedded finance is disrupting fintech is by making it easier for non-financial companies to enter the financial services market. By using embedded finance, companies can offer financial services to their customers without having to obtain licenses, comply with regulations, and build the necessary infrastructure as all the heavy lifting is done by the embedded infrastructure company. This allows them to focus on their core business while still being able to offer financial services and continue to enhance their distribution capabilities and not to worry about technology.

Embedded investing allows non-financial companies to offer a wider range of services to their customers, and it can also help them to increase customer convenience, loyalty, and retention as users can now invest their money through products, they are already familiar with and use regularly, making it easier to keep track of their investments and make more informed decisions. For example, HR Tech company could provide tax saving investments on their platform allowing the employees of the companies using their platform to save taxes. Or an e-commerce company app could offer its customers an embedded investing service that allows them to invest in financial products through the company's app more like a save now and buy later product.

Another way that embedded investing is disrupting fintech is by providing a more integrated and seamless experience for managing finances. In the past, customers often had to use multiple platforms and services to manage their money, which could be time-consuming and confusing. With embedded investing, however, customers can access all of their financial information and services in one place, making it easier to stay on top of their finances and make informed decisions.

In conclusion embedded investing is a relatively new concept in the fintech world but it's quickly becoming a game changer for the industry. By making investment services more accessible, more convenient, and more integrated, embedded investing is helping customers to better manage their finances and to achieve their financial goals. As the industry continues to evolve, we can expect to see more and more products and services incorporating embedded investing capabilities in the near future.

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