Embedded finance enables the financial institutions to reach greater number of customers cost effectively. It opens up new revenue lines It offers opportunities to cross-sell. It deepens relationship with customers, often by remaining behind the scene. Embedded finance allows brands and business to integrate financial services to their existing platforms and applications. Digital lending, payments, insurance, investments are classic examples of embedded finance.

Several banks use lending and embedded lending platforms both for retail and B2B purposes. The embedded finance service providers leverage technology for building solutions, e.g. decision-as-a-service (Dass), lending evaluation and analytics platform (LEAP) to enable customers to avail of a loan in a few steps while checking out on a merchant’s e-commerce platform’s payment gateway. AI/ML-based credit assessment scores a customer using available data.

Large banks use embedded finance through Fin Tech SaaS route.

Some banks such as Yes Bank have embraced Baas model. It rationalises technology cost and reduces time-to-market. It enables the bank to offer competitive products faster. The customers will be given tailor-made financial solutions. Several innovative use cases and product lines could be introduced.

Falcon and Jocata are the companies that operate in Baas and embedded finance area.