The Euro Banking Association (EBA) has released a new report that examines embedded finance and identifies areas where it can have a positive impact.
“Navigating the path to embedded finance” is based on research by the EBA’s Open Finance Working Group (OFWG), which aims to help EBA members to understand the fundamental mechanisms of embedded finance and shape their own journey in this area.
Among the key objectives, the report is aiming to spark a discussion about how financial institutions will likely be affected by the embedded finance trend and what a collaborative approach in this area could look like. Embedded finance integrates financial services into non-financial platforms, offering seamless experiences for customers and monetisation opportunities for providers. Financial institutions can play various roles in the embedded finance value chain, including as providers, enablers, and distributors of financial services. The embedded finance market is projected to grow significantly, with an emphasis on consumer payments, POS lending, and B2B payments.
Speaking on the launch, Jose Vicente, Chairman of the OFWG, said: “Embedded finance is more than a hype and should be on the board agenda of any bank or other financial institution,”
He added: “A first step towards developing a strategic approach is understanding the basics: how embedded finance works, its significance in relation to the overall market, the effect on value chain dynamics and the potential benefits – as well as the possible threat of not participating in an evolving market.”
The report “Navigating the path to embedded finance” is now available for download for EBA Members.
