Unlocking the Future: Embedded Finance and Its Transformative Impact
- Written by Francisco Mones , with contributions from Eoghan Nolan , Carter Pettus, and Mohamed Desoky. Listen to the full conversation here.
“The best financial services are the ones you don’t see.”— Matt Harris, Bain Capital Ventures
From integrated buy-now-pay-later checkouts to instant merchant cash advances, embedded finance is quietly transforming the way we interact with money. In a recent episode of the FaaS podcast, fintech veteran Eoghan Nolan—whose experience spans Google, eBay, and LendingTree—joined hosts Mohamed Desoky, Carter Pettus, and Francisco Mones Pena to explore how financial services are increasingly built into the apps and platforms we use every day. Their conversation unpacked how embedded finance is disrupting traditional banking, building on existing consumer behavior, and creating new business models across industries—from ride-hailing to retail. This blog highlights key insights from the episode and explores why embedded finance isn’t just a trend—it’s a structural shift in the future of fintech.
The Driver of Embedded Finance
Embedded finance refers to the integration of financial products into non-financial services. This concept is driven by the need to reduce friction in financial transactions and meet evolving consumer expectations. Eoghan Nolan emphasized that embedded finance allows companies to offer financial services seamlessly within their existing platforms, enhancing the overall customer experience.
Eoghan's journey into the world of FinTech began as a billing and payments product manager at a startup. A pivotal moment in his career was an interaction with Eric Schmidt at Google, which underscored the importance of seamless financial transactions. This experience highlighted the challenges of international payments and the need for innovative solutions like Stripe to address these issues.
The Disruptive Nature of Embedded Finance and Consumer Trends
Embedded finance is not just a trend; it is a disruptive force reshaping industries. Eoghan pointed out that millennials and Gen Z are driving this shift, as they prefer engaging with financial products outside traditional banking environments. The integration of financial services into everyday platforms is becoming the norm, with examples like Apple Pay illustrating the move towards “frictionless” financial services. According to GrandView research, embedded financial servicers are projected to grow at a 32.8% CAGR through 2030.
Our discussion highlighted a generational shift in financial service expectations. Younger consumers demand seamless, digital experiences, and embedded finance is meeting this need. Francisco Mones Pena notes that “millennials and Gen Z are unfamiliar with traditional banking practices like writing checks or visiting branches.” Instead, they expect instant, digital solutions that fit seamlessly into their daily lives. Carter Pettus referenced Apple Pay as a prime example of this trend, showcasing how digital wallets are becoming integral to modern financial interactions.
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Embedded Finance Modern Monetization Models and Bank Reliance
Embedded finance is opening up new monetization models. Eoghan discussed how financial products can add utility and enhance consumer experiences. For instance, the auto industry has been an early adopter, integrating financial services like auto loans directly into the car buying process. Francisco Mones Pena highlighted the potential for offering insurance for products or services as part of these new monetization models. This seamless integration is also seen in ecosystems like Amazon, where correlated products such as insurance and lending are offered.
However, the conversation dove tailed back to banks and their crucial role in the embedded finance ecosystem. They act as enablers, providing the necessary infrastructure for these services. The discussion touched on the differences in payment systems across regions, with the US, China, and Europe each having unique approaches. The integration of Buy Now Pay Later (BNPL) services in retail environments is another example of how embedded finance is expanding into various asset classes, including investments and crypto.
Balancing Challenges and Risks
While embedded finance offers numerous benefits, it also comes with challenges and risks. Eoghan highlighted the internal discussions within financial institutions about whether to build in-house embedded ecosystems or partner with fintechs. Legacy technology in banks poses a significant challenge, necessitating a shift towards distributed architectures. Additionally, embedded finance platforms often experience higher fraud rates compared to traditional banking, underscoring the need for robust fraud management.
Navigating the evolving fintech landscape requires a delicate balance between customer needs and business objectives. Mohamed Desoky provided great insight into this balance, emphasizing the importance of balancing the user experience with Know Your Customer (KYC) requirements and federal regulations in maintaining trust and security. Eoghan advised that success in this space hinges on understanding and addressing customer expectations while aligning them with business goals.
Looking Ahead
As the boundaries between financial services and digital experiences continue to blur, embedded finance is no longer optional—it’s becoming a core differentiator for eCommerce, SaaS and consumer businesses. Whether it’s financing a car within a dealership app or accessing credit through a checkout page, the future of finance is increasingly contextual, invisible, and personalized. We’re just scratching the surface of this transformation. How is embedded finance showing up in your industry—or your daily life?
Join the conversation by sharing your experiences, questions, or predictions using #EmbeddedFinance or tagging @WakeSPS.
Let’s explore what’s next together.