Embedded Finance at Scale: How Banks Can Build and Grow Successful Embedded Banking Businesses
Embedded finance is rapidly reshaping the financial services landscape, offering banks both a significant growth opportunity and a new set of competitive challenges. As financial products become seamlessly integrated into non-financial customer journeys—whether in e-commerce, enterprise software, or digital marketplaces—banks must rethink how they design, deliver, and scale their offerings. This page provides a comprehensive roadmap for banks aiming to build and grow successful embedded banking businesses, drawing on proven strategies, platform blueprints, and real-world case studies.
What Is Embedded Finance?
Embedded finance refers to the integration of financial services—such as payments, lending, insurance, and banking—directly into the digital experiences of non-financial companies. Instead of customers visiting a bank’s app or website, they access financial products at the point of need, within the platforms they already use. Examples include buy-now-pay-later options at online checkouts, business loans offered within accounting software, or payments and treasury services embedded in enterprise resource planning (ERP) systems.
While the concept of distributing financial products through partners is not new (think co-branded credit cards or point-of-sale finance), the digital era has dramatically expanded the scale, speed, and sophistication with which banks can embed their services. Today, embedded finance is a key driver of revenue growth, customer engagement, and competitive differentiation.
The Modular Capability Stack: Foundation for Scale
To succeed in embedded finance, banks must operate within a modular, API-driven ecosystem that enables them to serve multiple distribution partners efficiently. The typical embedded finance stack includes:
- Customer Proximity (Distributor/Partner): Non-financial companies (e.g., e-commerce platforms, ERP providers) that own the customer relationship and embed financial services into their journeys.
- API Layer: Enables secure, scalable, and compliant integration of banking services into partner platforms. Multi-tenancy is essential to serve multiple partners with varying needs.
- Financial Product Manufacturer: Designs and manages the financial products (e.g., loans, payments, accounts) offered through partners.
- Banking Infrastructure Provider: Delivers the underlying processes and technology to support product delivery, risk management, and compliance.
- Regulated Entity/Balance Sheet Provider: Holds the regulatory license and manages the financial exposures.
Banks can play multiple roles in this stack, but the ability to flexibly combine, adapt, and scale these capabilities is critical for success.
Commercial Strategies for Embedded Finance
Banks have several strategic options for embedded finance, including:
- Direct-to-Partner (Bank-Led): The bank owns the product and technology, distributing through selected partners.
- Fintech-Led: The bank provides regulated infrastructure and balance sheet, while fintechs manage the customer experience and partner relationships.
- API-Provider Model: The bank offers modular APIs for third parties to build on, focusing on scalability and compliance.
- SuperApp/Platform Model: The bank creates or participates in a broader digital ecosystem, blending financial and non-financial services.
Each model requires a clear approach to partner selection, economic incentives, risk management, and technology integration.
Roadmap: Designing, Launching, and Scaling Embedded Finance
1. Strategic Planning (0–3 Months)
- Define commercial objectives (growth, diversification, market share protection)
- Identify target customer segments and partner types
- Outline the economic model and regulatory approach
- Select pilot partners and set initial KPIs
2. MVP Build (3–9 Months)
- Develop a minimum viable product (MVP) with initial partners
- Establish a modular, API-first technology architecture
- Set up cross-functional teams (product, tech, compliance, partner management)
- Launch with a focus on rapid feedback and iteration
3. Proposition Scaling (9 Months+)
- Refine the offering based on partner and customer feedback
- Expand the partner ecosystem, onboarding new distributors efficiently
- Strengthen organizational capabilities (e.g., partner onboarding, support, compliance)
- Continuously enhance the platform for scalability, security, and resilience
Partner Ecosystem Management
Success in embedded finance depends on building strong, mutually beneficial relationships with a diverse set of partners. Key considerations include:
- Partner Selection: Focus on partners with aligned customer bases, digital maturity, and a willingness to co-create value.
- Proposition Co-Creation: Work closely with partners to design offerings that fit seamlessly into their customer journeys.
- Economic Model: Develop transparent revenue-sharing or fee structures that incentivize both parties.
- Operational Support: Provide robust onboarding, technical support, and ongoing relationship management.
Technology Architecture and Delivery Models
A scalable embedded finance platform is built on modern, cloud-native, event-driven architecture. Key features include:
- API Gateway & Management: Secure, scalable integration with partner systems
- Data at the Core: Real-time data lake for analytics, compliance, and personalization
- Composable Services: Modular business functions (e.g., onboarding, payments, KYC) that can be orchestrated for different partners
- Partner Ecosystem Integration: Flexibility to swap or run multiple fintech solutions per functional area
- Automated Operations: End-to-end automation for onboarding, servicing, and compliance
Delivery should be agile, with multidisciplinary teams empowered to iterate quickly and respond to partner and market feedback.
Case Studies & Platform Blueprints
SME Digital Bank (Built in 9 Months)
- Targeted 350,000 SMEs
- Orchestrated 22 fintech partners on a Microsoft Azure-based platform
- Delivered fully automated operational processes and real-time data analytics
- Enabled rapid onboarding of new partners and products via API-first design
Strategic Joint Venture in Asia
- Combined banking and non-banking services (e.g., food delivery, health, travel) on a single platform
- Scaled to over 10 million customers
- Leveraged a modular, partner-centric architecture to compete with digital-first entrants
These examples demonstrate that with the right approach, banks can move from pilot to scalable, multi-partner embedded finance businesses in under a year.
Moving from Pilot to Scale: Critical Success Factors
- Digital-First Mindset: Adopt agile, test-and-learn approaches to product development and partner engagement
- Modular, API-Driven Architecture: Build for flexibility, scalability, and rapid integration
- Partner-Centric Delivery Model: Organize cross-functional teams around partner and customer outcomes
- Efficient Customization: Develop the capability to adapt offerings for multiple partners without sacrificing speed or quality
- Continuous Learning: Use data and feedback to refine propositions and operations
Why Publicis Sapient?
Publicis Sapient has deep experience in designing, building, and scaling embedded finance platforms for leading banks and fintechs worldwide. Our end-to-end approach spans strategy, technology, partner ecosystem management, and agile delivery—enabling clients to move at pace and capture the full potential of embedded finance.
Ready to Scale Your Embedded Finance Business?
The future of banking is embedded, modular, and partner-driven. Banks that act now—building the right capability stack, commercial models, and delivery approaches—will be best positioned to lead in this new era. To learn how Publicis Sapient can help you design, launch, and scale your embedded finance business, get in touch with our experts today.