Wednesday, January 19

The embedded finance market gains importance in key sectors


The retail sector is estimated to represent 49% of this market in the next ten years. Healthcare is expected to hit 17% due to the addition of tech companies offering health-related insurance and payments. The growth opportunity in the education sector could make it account for 7% due to the boom in tech education. According to a report by Mambu, a SaaS financial services cloud platform, and Amazon Web Services

Mambu, SaaS financial services cloud platform, presents “Finance embedded, who will win the battle for the next digital revolution? “, a new report that estimates that the embedded finance market is gaining more and more importance in key sectors. This report, which has been carried out to determine the degree of acceptance of embedded finance in different industries over the next decade, highlights the figures in the retail sector and also shows the growth opportunities in the healthcare and education sectors. According to the report, in which Amazon Web Services has also participated, the embedded finance sector is estimated to turn around $ 7 trillion globally by 2030.

In this way, it is estimated that the retail sector will reach a value of 3.5 trillion dollars worldwide and represent 49% of the embedded financial market in the next ten years. Retail lending alone accounts for nearly a third (29%) of the embedded financing opportunity, and the digitization of retail services is poised to drive greater adoption of digital portfolios and flexible financing options, such as lending in the point of sale or services of ‘Buy Now Pay Later’.

For its part, medical care is expected to reach 1.2 trillion dollars, 17% of the market, due to the incorporation of technology companies that offer insurance and health-related payments. Finally, the report also indicates a growth opportunity in the education sector, reaching 7% of the market, due to the boom in technology education and a growing demand for loans in a record period of student debt.

Demand for new services
The Mambu study also confirms that consumer demand for embedded finance is high in these key sectors. A survey of 3,000 consumers, as part of the report, indicates that 86% would be interested in buying food in a store without a cashier and 60% would prefer to obtain a student loan directly from their academic institution instead of a bank. In addition, 81% of consumers would be interested in purchasing health insurance through an application, and of them, almost half would pay a small premium to be able to enjoy this mobile service. The findings also reflect the increase in ‘anywhere finance’ during the pandemic and the ability of technology-based industries to adapt more quickly to changing consumer needs.

Likewise, Mambu also shows the three key trends that will drive the growth of the embedded finance market:

  • Payments as part of the experience. Companies are increasingly using flexible payment options, such as “Buy Now Pay Later (BNPL)” to differentiate your offer, increase sales and offer more services to your customers when paying.
  • Loan growth at the point of sale (POS). The volume of flexible installment payments and instant credit options have increased significantly in the past five years, with an increase of 20% by 2021. These figures indicate strong consumer demand for instant access to short loans term.
  • Increased use of digital wallets. As more people use their mobile phones to browse, buy and pay for products and / or services online, digital wallets are projected to account for 51% of e-commerce payments by 2024.

Eugene Danilkis, CEO of Mambu, comments, “We are moving towards the ‘fourth industrial revolution’ in which financial institutions must make strategic decisions to take full advantage of the opportunities that embedded finance offers. One of our clients, ZestMoney, already offers its 7 million clients in India the ability to pay in installments without the need for a credit or debit card. This allows them to take advantage of the banking infrastructure to acquire clients from different sectors and, at the same time, offer customized products. Thanks to our report we can see the size of the existing opportunity and how financial institutions such as banks should think, act and have the technological power of fintech. For banks to compete effectively, they must invest in technology to build and improve their own digital offerings. “

About Mambu
Mambu is the only SaaS financial services cloud platform. Created in 2011, it enables the acceleration of the launch of digital products for financial institutions such as banks of any size, finance companies, retailers, telcos, or fintechs, among others. Thanks to its unique approach, independent components, systems and connectors can be assembled in any configuration to meet the needs and demands of businesses and users. Mambu has 700 employees who support 200 clients in more than 65 countries, such as N26, OakNorth, Tandem, ABN AMRO, Bank Islam and Orange. For more information: www.mambu.com

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