Embedded finance market to reach $7trn by 2026
The embedded finance market is set to be worth $7trn (£6trn) by 2026, according to a new study by management consultancy firm Bain & Company.
In 2021, embedded finance was worth $2.6trn, and accounted for amost five per cent of all US financial transactions.
Bain believes that by 2026, embedded finance will account for 10 per cent of all US transactions, as the technology becomes more mainstream.
“Embedded finance has quietly become a significant part of the way consumers and businesses make payments and access funding,” said Adam Davis, associate partner in Bain & Company’s fintech practice.
“In the years to come it will have a transformative effect on the relationship we have with our finances, removing friction from the sector and making financial services more contextual, accessible and helpful.”
Read more: Funding Circle works on further embedded finance partnerships
Several alternative lenders have entered the embedded finance market in recent years.
Former peer-to-peer lending giant Funding Circle has pivoted its business towards embedded finance, as it aims to become a multi-product platform.
Zopa has also expressed an interest in this part of the market. Meanwhile, business lender MarketFinance was recently added to Funding Options’ embedded finance platform in order to create more choice for borrowers.
Embedded finance allows retailers and other businesses to seamlessly add financial offerings to their websites and mobile apps. This makes it faster and easier for consumers to compare finance options.
Read more: Could P2P platforms benefit from embedded finance?