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Strategic Intelligence: Embedded Finance in Banking

Publisher GlobalData
Published Nov 04, 2025
SKU # GBDT20601983

Description

Strategic Intelligence: Embedded Finance in Banking

Summary

This report starts by defining exactly what we mean by “embedded finance.” It maps out the key gridlines of change likely to shape the evolution of embedded finance over the next two years. The report reviews executive survey data to delineate the level of preparedness and strategic focus for banks of various sizes across various parts of the world, before pivoting to consumer adoption and forecast data. It outlines the embedded finance value chain and key strategies providers can implement in this space. The report also provides brief firm-level summaries on who we think is best place to “win” in this theme and why, based on the preceding analysis.

Banking as a service (BaaS) (also known as embedded finance) was once the darling category in all of fintech, with unicorn valuations for new entrants threatening to unleash an avalanche of new, highly segmented players. Yet in the end that reality did not quite prevail. Buy now pay later (BNPL) took a big chunk out of banks’ credit card business, yet new providers in this space struggled to attain profitability, while regulatory headwinds challenge their unit economics further. Meanwhile, BaaS providers faced regulatory scrutiny following several high-profile failures that reverberated through the fintech ecosystem, with pioneers of the sector filing for bankruptcy and/or experiencing precipitous drops in their valuation. Yet GlobalData believes embedded distribution is here to stay, as guaranteed by consumer adoption rates.

Scope
  • Following the collapse of Synapse and consent orders against multiple other BaaS providers, increasing regulation is changing the risk and cost profile of the BaaS business model. Whereas smaller players led BaaS from the start, some of these regulatory changes play into the hands of larger banks with long, proven histories of various types of compliance.
  • Banks enabling embedded finance compete on various tech dimensions, but increasingly important in the lending context is a smooth orchestration layer that can bring together a wide range of disparate services across multiple vendors into one unified decision engine that acts reliably in real-time, while automatically logging every decision, rule path, and outcome for compliance purposes.
  • In 2025, Celent (part of GlobalData) surveyed retail banking executives on product-level investment priorities. BNPL-undeniably the single most mature product incarnation within embedded finance-was ranked “first” or “top” priority by 16% of respondents, second only to digital deposit account opening (19%).
Reasons to Buy
  • This report is essential reading for senior executives at financial services companies seeking to understand how to reassess and potentially recalibrate embedded finance efforts in accordance with evolving market conditions.
  • Discover how embedded finance has influenced the financial services sector since the concept was first introduced.
  • Identify key players within the embedded finance space, as well as the key strategies they use to succeed.
  • Learn about the embedded finance value chain, as well as key examples of success within the space.

Table of Contents

Executive Summary
Players
Thematic Briefing
Embedded finance
Trends
Technology trends
Macroeconomic and social trends
Regulatory trends
Industry Analysis
Embedded finance preparedness and adoption worldwide
Executive sentiment on open ecosystem strategy
BNPL adoption trends could replicate across all bank products
How fast is BNPL growing?
Why is BNPL growing?
Who uses BNPL?
Who are the preferred BNPL providers?
Timeline
Value Chain
Balance sheet provider
Banking infrastructure provider
Cards
Payment processing
Banking
Lending
Credit scoring
KYC
AML
Identification and onboarding
Enabling finance providers
API layers
Vertical distribution
Retail
Food delivery and ride-hailing
Entertainment
Automotive
Health and fitness
Marketplaces and platforms
Real estate
Healthcare
Telcos
Core customer journeys
Companies
BaaS
Tech providers
Distribution partners
Sector Scorecards
Banking sector scorecard
Who’s who
Thematic screen
Valuation screen
Risk screen
Glossary
Further Reading
GlobalData reports
Our Thematic Research Methodology
About GlobalData
Contact Us
List of Tables
Table 1: Technology trends
Table 2: Macroeconomic and social trends
Table 3: Regulatory trends
Table 4: BaaS
Table 5: Tech providers
Table 6: Distribution partners
Table 7: Glossary
Table 8: GlobalData reports
List of Figures
Figure 1: Who are the leading players in the embedded finance theme, and where do they sit in the value chain?
Figure 2: New routes to market for existing products
Figure 3: New bank products for new bank customers
Figure 4: Digital drives disaggregation and unbundling across the banking value chain
Figure 5: Confidence in commercial returns from an open ecosystems strategy varies
Figure 6: Retail banks are pursuing a wide range of lending opportunities
Figure 7: Security and risk concerns, alongside consumer adoption, are the biggest barriers to embedded finance
Figure 8: In 2025, BNPL was ranked as the first priority by the second-highest number of banking executives
Figure 9: BNPL volume is growing consistently year on year
Figure 10: Consumers do not choose BNPL for the absence of interest payments
Figure 11: BNPL grows in lockstep with ecommerce growth worldwide
Figure 12: BNPL is used by a wide range of income and age brackets
Figure 13: Non-bank BNPL providers dominate market share in key BNPL markets
Figure 14: The embedded finance story
Figure 15: Embedded finance value chain
Figure 16: Different industry verticals will enable embedded finance at different speeds
Figure 17: Who does what in the Banking space?
Figure 18: Thematic screen
Figure 19: Valuation screen
Figure 20: Risk screen
Figure 21: Our five-step approach for generating a sector scorecard

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