Embedded Wealth

Digitization is racing ahead in all areas of finance. At the center of this digital rush, a new business model is emerging – embedded finance. In short, embedded finance is the integration of retail financial services, lending, insurance, and investment into non-financial apps or websites. It is also part of a larger movement for companies of all sectors to reshape themselves into platforms through which users can buy a range of financial products, from mortgages to investment products.

The trend toward building platforms can be traced back to the launch of the first iPhone and the subsequent explosive growth of mobile apps. Today over 25’000 fintech apps exist globally

for every conceivable banking function. These applications can seamlessly be integrated into existing non-banking marketplaces. For example, the ride-hailing app Grab in Singapore has over 60 partnerships with fintechs, banks, insurers, and other financial firms.

The embedded finance movement has blurred the lines between consumer companies and financial institutions, enabling companies to monetize their customer relationships like never before. With access to a full picture of users’ behavior, firms use algorithms to recommend financial products that may be specifically relevant to each user. Such developments seem to legitimize Bill Gates’ provocative claim that consumers will continue to need banking services, but not necessarily delivered from a bank.

This is also a threat to banks. In fact, of the 10 most valuable brands in the world according to the consulting firm Kantar, 9 offer banking services of some kind, and none of them are banks.

And as digitization continues to race ahead, this report explores how embedded wealth strategies represent an opportunity for wealth and asset managers to deliver more responsive financial services and provide better solutions for end customers.