By MADE 
According to recent forecasts, the global embedded finance market is expected to surpass $138 billion by the end of this year. This exponential growth is a testament to the increasing demand for seamless, integrated financial experiences and as we’ll explore, it’s even shifting beyond consumer-facing services.
How Embedded Finance is Evolving
Embedded finance refers to the integration of financial services into non-financial platforms, enabling businesses to offer a wide range of financial products and services to their customers. This trend has been gaining momentum, and as Ivo Bozukov explains, “Embedded finance has stopped being a buzzword and turned into standard infrastructure that customers now expect.” Having previously spent over a decade leading Forum Energy Technologies, he understands the importance of listening to customers.
Companies like PayPal, Stripe, and Square have already made significant inroads in the embedded finance space, providing merchants with access to loans, payment processing, and other financial tools. Ivaylo Bozoukov adds that “without access to finance, people can’t easily pay bills, apply for loans, save securely, or trade with local businesses.”
The Shift Goes Far Beyond Consumer Facing Services
The shift towards embedded finance is not limited to consumer-facing services. Businesses are now leveraging embedded finance to optimise their operations, manage cash flow, and optimise financial performance. For instance, companies like SAP and Oracle are incorporating financial services into their enterprise software, enabling businesses to access a range of financial tools and services within their existing systems. This integration is expected to improve financial efficiency, reduce costs, and boost business performance.
How the Convergence of AI-Driven Embedded Finance is Creating Contextual Lending
The convergence of AI-driven embedded finance is creating new opportunities for contextual lending. By analyzing customer data and behavior, AI-powered systems can provide personalized lending offers, upping the entire customer experience. For example, companies like Klarna and Affirm are using AI-driven embedded finance to offer customers personalised payment plans and lending options. This approach not only enhances customer satisfaction but also reduces the risk of default, making lending more efficient and sustainable.
The Growing Importance of a Compliance-first Design
As embedded finance continues to grow, the importance of a compliance-first design is paramount. Regulatory compliance is critical to ensuring the integrity and security of financial transactions. Companies must prioritise compliance when designing their embedded finance solutions, factoring in aspects like data protection, anti-money laundering, and know-your-customer (KYC) regulations. By adopting a compliance-first approach, businesses can minimise risks, avoid regulatory penalties, and maintain customer trust.
Embedded finance is changing the financial landscape in 2026. With the global embedded finance market set to increase, it is essential for businesses to remain competitive. By understanding the evolution of embedded finance, its shift beyond consumer-facing services, and the role of AI-driven innovations, companies can harness the potential of embedded finance to drive growth, boost client satisfaction, and stay compliant with regulatory requirements.