The 3 A’s of Embedded Finance: Fundamentals for Success in Financial Services Firms

Embedded finance can’t be ignored; it is fundamentally transforming the face of financial services, injecting growth and innovation into traditional products and services at a time when fintechs, challenger banks, and insuretechs are taking on incumbents. Industry expert Simon Torrance estimates the addressable market opportunity for embedded finance will be greater than $7 trillion in ten years, an amount that is twice the current combined value of the world’s top 30 banks.

The 3 A’s of Embedded Finance: Fundamentals for Success in Financial Services Firms

What is Embedded Finance?

If you’re unfamiliar with embedded finance, here’s a quick primer: Embedded finance is the deployment of technology that allows any brand or merchant to rapidly integrate financial services and products into their offerings or customer experiences — usually at low cost. A major example is how Google now allows users to find and purchase services directly through the search function instead of using another app. By crossing or blurring the lines between traditional functions, it represents a direct threat to incumbent banks, insurers, and other financial services providers. 

The 3 A’s of Embedded Finance

The embedded finance opportunity is massive, so it can be helpful to reduce the conversation to the “three A’s” that are essential for success in this area, which are: 

  • Apps
  • APIs
  • Artificial Intelligence (AI)

Let’s take a closer look at these three essential areas and how they impact embedded finance:


There’s no denying that we live in an app-driven world where consumers expect their interactions with financial services providers to be fast, easy, and secure on all of their devices. Embedded finance seizes on this reality by offering products and services within a single app instead of forcing consumers to navigate to separate sites.

To succeed with apps, service providers must build integrated capabilities. This isn’t simply a technical requirement: it also provides fresh approaches to the way institutions complete their work and track interactions with customers. Embedded finance isn’t simply moving existing functions from the analog to the digital realm; it’s about creating whole new experiences, and this requires new forms and processes for teams. In the end, an app is the surface manifestation of the complex work structure behind it.


APIs enable the easy sharing of data as well as the ability to partner with fintechs (and other providers) to build and deliver cutting-edge services. Success with APIs boils down to three steps:

  1. Break down data silos so information is freely available across the enterprise. This is often easier said than done, and quite frequently, it demands the lion’s share of time and resources.
  2. Build the infrastructure necessary to support the APIs. This should include the ability to interact with outside sources of data. 
  3. Recognize that API policies must support cooperation both within and without the organization. The ability to interact with outside sources is particularly important as the rise of fintechs and open banking herald a new approach and outlook moving forward.

Artificial Intelligence

Data without insight is just noise, and continual insights and learnings that are often outside of the box predict the premise of embedded finance. Advanced analytic capabilities make the most of existing data and partner input, and they respond to the innovations and insights that arise from competitors. We are quickly moving from “nice to have” to “need to have” when it comes to AI, and its capabilities are essential to building embedded finance that is responsive and ongoing.

Embedded Finance Is the Future of Financial Services and Insurance.

Embedded finance is the result of a dramatic increase in technological capabilities, and it presents a vision of the future of financial services. The borders between types of business are dissipating as products, services, and experiences are increasingly integrated and delivered seamlessly to consumers. In other words, ignore embedded finance at your own risk.

On the same note, Google Cloud has released a new white paper, “Embedded Finance: The key to survival and growth for financial institutions.” It provides insight on why digitizing existing services is no longer enough to satisfy consumer expectations. Learn how banks, insurers, and payments companies can leverage API management solutions to embed their services with non-financial products; meeting customers where they are, at their convenience, and on their own terms. Download the white paper now to learn more.


About the Author

Kylie McKee
Kylie McKee is a Content Marketing Strategist at Maven Wave with more than eight years of tech industry experience and five years of content marketing experience. Prior to joining the Maven Wave team, Kylie worked as a Content Marketing Specialist for WebPT, Inc. and earned an Associate in Applied Science in Motion Picture, Television, and New Media Production with a CCL in Screenwriting from Scottsdale Community College.
October 26th, 2021

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