Embedded finance is revolutionizing the financial sector by offering financial services directly within non-financial products or platforms. As we enter 2024, understanding embedded finance trends becomes crucial for businesses aiming to stay competitive and meet growing consumer expectations for seamless and accessible financial services. In this article, we'll explore the five main trends shaping the embedded finance market in 2024 and beyond, offering valuable insights for industry players and businesses considering adopting these innovative solutions.

1\. A More Prudent and Strategic Approach to Embedded Finance

2024 marks a turning point in the approach to embedded finance, with a trend towards a more thoughtful and sustainable strategy. According to Treasury Prime's forecasts, market players will prioritize measured and sustainable growth rather than rapid but risky expansion.

Streamlining Investments in Embedded Finance

Companies are now focusing on optimizing their existing investments in embedded finance. This approach aims to consolidate gains and improve the efficiency of embedded finance solutions already in place, rather than launching new large-scale projects.

Prioritizing Profitability of Embedded Financial Services

Profitability is becoming the watchword, superseding the goal of rapid growth. Companies are seeking to optimize their business models and clearly demonstrate the added value of their embedded finance services, both for themselves and their customers.

2\. Increasing Involvement of Major Banks in Embedded Finance

A major trend for 2024 is the significant entry of traditional banking institutions into the embedded finance arena. Treasury Prime highlights this evolution, which marks a turning point in the embedded finance landscape.

Development of Proprietary Embedded Finance Services

Major banks are investing heavily in developing their own embedded finance services. They are capitalizing on their existing customer base, financial expertise, and trusted reputation to offer innovative solutions.

Multiplication of Strategic Partnerships

There's an increase in collaborations between traditional banks and fintech companies specializing in BaaS (Banking as a Service). These partnerships combine the technological innovation of fintechs with the strength and credibility of established banking institutions, creating more robust and comprehensive embedded finance offerings.

3\. Acceleration of Embedded Finance Due to Smartphone Expansion

The growing ubiquity of smartphones worldwide is playing a catalytic role in accelerating the embedded finance market. As highlighted by Fast Company, this trend is expected to intensify in 2024, opening new perspectives for embedded finance.

Democratization of Embedded Financial Services

The massive adoption of smartphones, including in emerging markets, allows for an unprecedented democratization of financial services. For example, in sub-Saharan Africa, smartphone penetration is expected to reach 65% by 2025, offering fertile ground for embedded finance solutions. This digitalization of financial services opens new opportunities for embedded finance players, particularly in previously underserved regions.

Mobile-Centric Innovations in Embedded Finance

Companies are intensifying their efforts to develop embedded finance solutions specifically designed for mobile devices. The focus is on user experience, ease of use, and security of mobile transactions. For example, features like biometric authentication and contactless payments are becoming standards in mobile embedded finance solutions.

4\. Significant Growth of the European Embedded Finance Market

The European embedded finance market is experiencing remarkable growth, as evidenced by the example of Germany. According to a report cited by Silicon Canals, the German embedded finance market is expected to grow by 28.2% to reach $9.79 billion in 2024.

Expansion of Embedded Finance Services Across Europe

This growth trend is not limited to Germany. Similar expansion of embedded finance services is expected in other European countries, driven by increasing demand from consumers and businesses. Countries like France, the UK, and Nordic countries are also showing promising signs of accelerated adoption of embedded finance.

Adaptation to Local Regulations in Embedded Finance

Players in the embedded finance market must navigate a complex and constantly evolving regulatory landscape. Adapting to local regulations while maintaining a coherent offer across Europe represents a major challenge but also an opportunity for differentiation. Initiatives such as the PSD2 directive and GDPR regulation continue to influence the development of embedded finance solutions in Europe.

5\. Evolution of Technological Solutions in Embedded Finance

The fifth major trend concerns the rapid evolution of technological solutions in the field of embedded finance, with a particular focus on low-code platforms like Basikon.

Rise of Low-Code Platforms in Embedded Finance

Low-code platforms are gaining popularity as they allow businesses to quickly develop and deploy embedded finance solutions without requiring in-depth technical expertise. Basikon, for example, offers a low-code finance platform that significantly simplifies the process of integrating financial services. This approach allows companies to reduce development and time-to-market for their embedded finance solutions by up to 70%.

Increased Customization and Flexibility in Embedded Finance Solutions

Technological solutions are evolving to offer greater flexibility and advanced customization options in the field of embedded finance. This allows companies to precisely tailor their embedded finance offerings to their specific needs and those of their customers. Basikon's customer success stories perfectly illustrate this trend towards customization, showing how companies from various sectors have been able to integrate tailored financial services using the platform.

Conclusion: The Promising Future of Embedded Finance

The embedded finance trends for 2024 reflect a maturing sector, characterized by a more strategic approach, increased involvement of traditional players, global expansion driven by mobile technology, significant growth in Europe, and continuous fintech innovations. These developments open new perspectives for companies wishing to integrate financial services into their existing offerings.

To fully leverage these trends, it is crucial to adopt flexible and scalable technological solutions. Low-code platforms like Basikon offer a promising path to quickly and efficiently integrate embedded finance services while remaining agile in the face of market developments. By embracing these trends and relying on innovative tools, companies can not only improve their service offerings but also open new revenue streams and strengthen customer relationships.

CTA: Ready to integrate these embedded finance trends into your business strategy? Discover how Basikon's low-code platform can help you stay at the forefront of embedded finance innovation. Request a personalized demo today and transform your approach to financing!

FAQ on Embedded Finance

What is embedded finance?

Embedded finance refers to the integration of financial services directly into non-financial products or services of a company. It allows consumers to access banking, payment, or credit services seamlessly and contextually. To learn more, check out our detailed article on embedded finance.

Why are major banks interested in embedded finance?

Major banks see embedded finance as an opportunity to diversify their services, reach new customers, and stay competitive against innovative fintechs. By developing embedded finance offerings, they can extend their presence in the digital ecosystem and capitalize on new consumer habits.

How do low-code platforms facilitate the adoption of embedded finance?

Low-code platforms like Basikon allow companies to quickly develop and deploy embedded finance solutions without requiring in-depth technical expertise. They thus reduce costs and time-to-market, while offering great flexibility to customize financial services according to each company's specific needs.

What are the challenges of embedded finance in Europe?

The main challenges include navigating a complex and varied regulatory landscape, adapting to local specificities while maintaining a coherent offer, and increased competition in a rapidly growing market. Compliance with regulations such as GDPR and PSD2 is also a major issue for embedded finance players in Europe.

How does smartphone growth impact embedded finance?

The expansion of smartphones promotes access to embedded financial services for a larger number of users, thus stimulating demand and opening new market opportunities, particularly in previously underserved regions. It also allows for the development of innovative financial solutions, centered on the mobile experience and adapted to the specific needs of smartphone users.

What are the specific advantages of Basikon for leveraging embedded finance trends?

Basikon offers a low-code platform specifically designed for embedded finance, allowing businesses to quickly deploy customized solutions. Its advantages include significant reduction in development time, great flexibility to adapt to market changes, and easy integration with existing systems. Additionally, Basikon offers advanced security and compliance features, essential in the current regulatory context of embedded finance.