The digital economy continues to evolve and banks face a moment of reckoning. No longer can financial institutions afford to operate as mere destinations for transactional services.
Embedded finance – a strategic roadmap
The future – fast approaching, if not already here – demands that banks embed themselves seamlessly into the digital lives of consumers.
Mobey Forum’s latest report, “Embedded Finance: A Strategic Roadmap for Banks”, provides a clear-eyed framework for how banks can not only survive, but thrive, in this emerging paradigm.
At its core, embedded finance is the fusion of financial services with non-financial digital platforms.
It’s what enables consumers to access credit at the point of sale, initiate instant pay outs from within business software, or take out insurance while booking a holiday – all without visiting a bank app or website.
According to Mobey Forum, this is not a peripheral trend; it is a strategic inflection point.
Three Models, One Goal: Relevance
The report outlines three foundational business models banks can adopt, each representing a different degree of ecosystem integration.
API-Driven Banking is the gateway drug to embedded finance. Banks expose their services via APIs, allowing third parties to embed functionalities such as payments or lending into their platforms.
This model is low risk and capitalises on investments made under Open Banking mandates.
Real-world cases such as SEB Embedded and the UBS–Swiss Post partnership illustrate the model’s potential to extend distribution without eroding brand control.
However, with opportunity comes danger.
Banks that over-rely on APIs risk becoming undifferentiated utilities – mere “dumb pipes” beneath someone else’s UX.
Mobey Forum warns that banks must actively manage partner relationships and invest in technical scalability and commercial strategy to avoid this fate.
Verticalised Offering, by contrast, places banks in the role of distributor. Here, the institution curates and bundles third-party services with its own, creating holistic customer experiences.
Think of Revolut, where crypto trading, insurance, and travel services exist alongside traditional banking functions.
This model deepens customer stickiness and opens lucrative cross-sell opportunities.
In markets like Poland, where banks have integrated transport and parking payments into mobile banking apps, it is already reshaping the digital wallet.
The critical challenge is quality control.
Expanding horizontally without diluting brand integrity or service quality is no small feat.
Success hinges on strategic partner selection, seamless integration, and a data-led approach to personalisation.
Platform Banking, the third and most advanced model.
Here, banks transform into ecosystem orchestrators, offering a centralised space where both financial and non-financial actors converge.
This is banking as a marketplace – a model exemplified by India’s YONO app or UBS’s key4 mortgage platform.
These are not apps with a few bolt-on services; they are full-fledged ecosystems.
This approach is not for the faint-hearted. It demands significant investment in modular IT architecture, real-time analytics, and multi-sided business strategies.
Yet the rewards are compelling: diversified revenue, network effects, and leadership in the digital economy.
Why Now?
The urgency is explicit.
Mobey Forum draws a line in the sand: delay now, and banks risk irrelevance.
As non-bank platforms – from e-commerce giants to SaaS providers – embed finance into their user journeys, banks that hesitate will lose visibility, loyalty, and revenue.
Regulatory pressures compound the case for action. PSD3 and the proposed Payment Services Regulation (PSR) continue to encourage openness, interoperability, and data sharing.
The longer banks take to define their embedded finance strategies, the more space they cede to agile competitors.
From Strategy to Execution
The report doesn’t stop at theory.
It offers tactical steps for each model, from forming developer-first API portals and partner SLAs, to aligning embedded initiatives with core transformation programmes.
A test-and-learn mindset is critical: Mobey urges banks to pilot fast, fail intelligently, and refine continuously.
Moreover, the role banks choose to play – producer, distributor, or orchestrator – must be tightly aligned with their capabilities, market position, and appetite for risk.
Technology is a key enabler, but mindset and strategic clarity are what differentiate the leaders from the laggards.
Embed or Be Eclipsed
The message is clear: embedded finance is not a feature; it is the next business model.
For banks, this is not simply a matter of adopting new tools or channels. It is a chance to reimagine their place in the value chain – as invisible enablers of contextual, customer-centric services.
Mobey Forum’s report is both a wake-up call and a playbook. Banks have a choice: become integral to the digital lives of their customers – or become increasingly peripheral to them.
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