By Philipp Buschmann, co-founder and CEO of AAZZUR
Finance used to be something customers went looking for. If they needed a loan, insurance, a payment account or a card, they went to a bank or another financial provider, however, that model is changing. Increasingly, financial services are appearing inside the products and platforms people already use, and that shift is beginning to reshape industries far beyond banking.
The first change is in customer expectations. When finance is built into an existing journey, it becomes less visible and, ideally, less disruptive. A customer booking a trip can arrange insurance without leaving the travel platform. A small business using accounting software can access working capital in the same environment where it manages invoices. A driver working through a platform can receive earnings without having to move between several financial services.
This matters because the value is not simply in adding another financial product. It is in removing a point of friction. The best embedded finance experiences understand what the customer is already trying to do and make the financial step feel like a natural part of that activity.
Retail is a clear example here, payments have been embedded for years, but the opportunity now extends further. Retailers can connect purchasing behaviour with financing, loyalty, wallets or other financial services. The important distinction is that these services can be presented in context rather than as standalone products. The customer does not necessarily need to think of themselves as using a financial service at all.
IKEA provides a practical example. Alongside conventional payment methods, the retailer offers financial services including IKEA Family credit and financing options as part of the purchasing journey. This is particularly relevant for higher-value purchases such as kitchens and furniture, where access to finance can be directly connected to the customer’s decision to buy rather than requiring them to seek credit separately.
The same logic applies to software. Business platforms increasingly sit at the centre of how companies invoice customers, pay suppliers and manage cash flow. Once financial services are connected to those workflows, software providers can become an important access point for payments, credit and other financial products. Finance is no longer a separate destination, it becomes part of the operating system of the business.
Travel, mobility and marketplaces are following a similar path. These sectors already control a significant part of the customer journey, which gives them a natural place to introduce financial services at the moment they are most relevant. The challenge is making that experience useful rather than simply adding more options to an already crowded interface.
Hopper is a strong example from travel. The travel booking platform has built financial products directly into the booking experience, including price-freezing products that allow customers to protect a flight price and options around changing or cancelling bookings. Rather than simply selling the flight and sending customers elsewhere for financial protection, Hopper uses its technology and customer data to offer financial flexibility at the point where the traveller is making a booking decision.
This is also where the pressure on financial infrastructure becomes more visible. Embedded finance requires financial institutions and technology providers to support constant interaction with partners, real-time data and changing customer behaviour. Systems built around periodic updates and isolated products are harder to adapt to this model. The problem is not just technical. It affects how quickly a company can launch, test and improve a service.
There is a temptation to view embedded finance as another fintech trend, but that misses the bigger shift. The more important change is that the boundary between financial services and other industries is becoming less defined. Companies that never considered themselves financial businesses can increasingly influence how customers pay, borrow, insure and manage money.
The winners will not necessarily be the companies offering the most financial products. They will be the ones that understand where finance belongs in the customer journey and where it does not. Embedded finance works when it solves a real problem at the right moment. When it is bolted on simply because it is possible, it risks creating more complexity rather than less.
Banking is therefore only one part of the story. Embedded finance is changing the role of finance itself; from a destination customers visit to a capability that can sit quietly inside everyday experiences. That shift has implications for almost every industry, because almost every industry has moments where money, trust or access to capital matters.
Why Embedded Finance Is Reshaping Every Industry, Not Just Banking
By Philipp Buschmann, co-founder and CEO of AAZZUR
Finance used to be something customers went looking for. If they needed a loan, insurance, a payment account or a card, they went to a bank or another financial provider, however, that model is changing. Increasingly, financial services are appearing inside the products and platforms people already use, and that shift is beginning to reshape industries far beyond banking.
The first change is in customer expectations. When finance is built into an existing journey, it becomes less visible and, ideally, less disruptive. A customer booking a trip can arrange insurance without leaving the travel platform. A small business using accounting software can access working capital in the same environment where it manages invoices. A driver working through a platform can receive earnings without having to move between several financial services.
This matters because the value is not simply in adding another financial product. It is in removing a point of friction. The best embedded finance experiences understand what the customer is already trying to do and make the financial step feel like a natural part of that activity.
Retail is a clear example here, payments have been embedded for years, but the opportunity now extends further. Retailers can connect purchasing behaviour with financing, loyalty, wallets or other financial services. The important distinction is that these services can be presented in context rather than as standalone products. The customer does not necessarily need to think of themselves as using a financial service at all.
IKEA provides a practical example. Alongside conventional payment methods, the retailer offers financial services including IKEA Family credit and financing options as part of the purchasing journey. This is particularly relevant for higher-value purchases such as kitchens and furniture, where access to finance can be directly connected to the customer’s decision to buy rather than requiring them to seek credit separately.
The same logic applies to software. Business platforms increasingly sit at the centre of how companies invoice customers, pay suppliers and manage cash flow. Once financial services are connected to those workflows, software providers can become an important access point for payments, credit and other financial products. Finance is no longer a separate destination, it becomes part of the operating system of the business.
Travel, mobility and marketplaces are following a similar path. These sectors already control a significant part of the customer journey, which gives them a natural place to introduce financial services at the moment they are most relevant. The challenge is making that experience useful rather than simply adding more options to an already crowded interface.
Hopper is a strong example from travel. The travel booking platform has built financial products directly into the booking experience, including price-freezing products that allow customers to protect a flight price and options around changing or cancelling bookings. Rather than simply selling the flight and sending customers elsewhere for financial protection, Hopper uses its technology and customer data to offer financial flexibility at the point where the traveller is making a booking decision.
This is also where the pressure on financial infrastructure becomes more visible. Embedded finance requires financial institutions and technology providers to support constant interaction with partners, real-time data and changing customer behaviour. Systems built around periodic updates and isolated products are harder to adapt to this model. The problem is not just technical. It affects how quickly a company can launch, test and improve a service.
There is a temptation to view embedded finance as another fintech trend, but that misses the bigger shift. The more important change is that the boundary between financial services and other industries is becoming less defined. Companies that never considered themselves financial businesses can increasingly influence how customers pay, borrow, insure and manage money.
The winners will not necessarily be the companies offering the most financial products. They will be the ones that understand where finance belongs in the customer journey and where it does not. Embedded finance works when it solves a real problem at the right moment. When it is bolted on simply because it is possible, it risks creating more complexity rather than less.
Banking is therefore only one part of the story. Embedded finance is changing the role of finance itself; from a destination customers visit to a capability that can sit quietly inside everyday experiences. That shift has implications for almost every industry, because almost every industry has moments where money, trust or access to capital matters.