28 Feb 2022 | 4 minutes

Embedded Finance: A bubble or a paradigm shift?

Embedded Finance: A bubble or a paradigm shift?

We rounded off 2021 by holding our third virtual event in our ‘Money 2030’ series on the future of fintech, which featured expert panellists from across the technology and financial services.

The theme for our most recent event was: Embedded finance – a bubble or a paradigm shift? The online event was co-chaired by our CEO Mike Peplow and Co-founder Ivo Gueorguiev, our expert panel of speakers included:

  • Andrea Notaro – Managing Director, Rothschild & Co
  • Alex Mifsud – Co-founder and CEO, Weavr
  • Alison Donnelly - Director, Fscom
  • Tony Craddock - Director General, The Payments Association

This is the third and final in our series of blog posts, diving more deeply into the main and final question put to our expert panel.

This week, we will look at ‘Is embedded finance a bubble that will inevitably burst, or is it a complete paradigm shift?‘

Ivo Gueorguiev, the co-founder of Paynetics, kicked off the final discussion with the panellists, by highlighting there are two sides to the discussion. Ivo believes that embedded finance is definitely a paradigm shift due to the way consumers now perceive finance. He went on to echo the sentiments of Alex Mifsud, co-founder and CEO of Weavr, saying that with mortgages for example, people don’t go out to buy a mortgage, they merely need a mortgage to buy a house. Financing is a means to an end. Ivo added that although he believes embedded finance is a paradigm shift, there will be inevitable ‘bubbles’ along the way.

Alex Mifsud, followed up and agreed that it’s a paradigm shift. He said it’s all about asking your customer not to go to the bank but instead bringing the bank to the customer. It’s not a bubble as there's a real value story, the world works better with embedded finance. However, he went on to express some concern with the overexposure of the words embedded finance. He feared it could become somewhat of a bandwagon. Finishing his answer with “It’s a bubble of the term, but not a bubble of the concept”.

Likewise, Alison Donnelly, Director at Fscom, agreed, it’s not a bubble but instead an evolution. Embedded finance is a broad solution with customer demand and convenience at the heart of it. The evolution will continue with further variations of capability that, in turn, will generate new and novel end-user propositions.

Andrea Notaro, Managing Director at Rothschild & Co, said that embedded finance is a trend and will change the way customers see banks, insurance companies and the wider market.

Finally, Tony Craddock, Director General at The Payments Association disagreed with the other panellists. He instead described embedded finance as a necessary step towards opening up payments to a wider audience rather than a paradigm shift. Tony believes that it’s a step in the right direction as it focuses our minds on a set of consumer needs, creates business opportunities and encourages innovation.

And with that, the third Money 2030 event was over. We finished with the majority of speakers agreeing embedded finance was a paradigm shift, had excellent discussions and heard some great insights throughout.

Ivo closed the webinar with thanks to this year's panellists.