Finance
The Death of Old Finance & the rise of embedded finance
Published by Jessica Weisman-Pitts
Posted on November 25, 2022
5 min readLast updated: February 3, 2026
Global Banking & Finance Review®
Company
Published by Jessica Weisman-Pitts
Posted on November 25, 2022
5 min readLast updated: February 3, 2026
By Nigel Verdon, CEO and co-founder ofRailsr
Embedded finance emerges
The pandemic has accelerated what would have been a decade of change in one year and along with all other sectors, the financial services industry has undergone radical digital transformation. What was originally called Banking-as-a-Service (BaaS) has now evolved into embedded finance – digitised financial products and transactions that eliminate the need for third-party providers and distributors.
At Railsr, we believe that these digitisation trends are only going to grow in the future as the desire for new consumer experiences becomes more and more urgent. The time for ‘old finance’ and traditional banking is well and truly up, and the next wave of fintech innovation is around the corner. The financial services industry needs to start thinking about how it can engage Gen Z and drive loyalty as requirements and demands continuously evolve.
Digital natives
Railsr is one of the major innovators in the embedded finance market, and we have even taken a step further with a category called embedded finance experiences. Today’s consumers are digital natives, but that doesn’t mean they need to be digital experts. We believe that the most important thing is understanding consumer behaviour, and over the years we have realised that they want frictionless, fun experiences, not finance.
Last year, we conducted research revealing that out of 2,000 consumers, only 35 per cent are happy with the loyalty rewards their bank offers them. So the question is, how can the digitised financial services industry learn from the mistakes of traditional banking?
Our solution has been to create a platform that provides all the capabilities, tools and advice in one place to ensure that brands can seamlessly embed financial services that are relevant within individual customer journeys. This enables brands and companies to focus on building deeper relationships and maximising revenue.
Who will drive the future of embedded finance?
While fintechs were the first to explore embedded finance, tech giants like Google, Facebook and Amazon quickly started to look into it. Now, the future of embedded finance is in the hands of retailers and brands that want to have a bigger digital grip over their customers.
The opportunity for sports brands to tap into the fan economy is also particularly ripe, and we will continue to see this in the future. We have worked with the likes of McLaren Racing to launch its own branded debit card with exciting loyalty rewards for fans like exclusive access to the pit lane at the Grand Prix. These are the sorts of financial experiences consumers are starting to expect from the brands they love.
Fintech in ten years time…
Banking in 2030 will look very different than it does today, with emerging technologies, new business models and changing consumer expectations bringing innovation to the forefront.
Fintech will become the new finance industry as opposed to the old finance. This will continue to be the way the finance industry is structured and operates – meaning older direct-to-consumer offerings are moving from transactional to subscription-based.
More non-financial firms will follow suit over the next ten years, meaning that the ‘back end’ of finance will continue to be where most of the innovation happens in fintech. This will see the industry restructure where capital sits on the balance sheets of banks, meaning banks will play a different role of managing risk, and the distribution of capital and the origination of lending assets will sit with digital finance.
Embedded finance experiences are the future
Embedded Finance Experiences and reward services are set to become the future of banking and will continue to be the next phase of growth. Moving away from basic banking, card or financial products to deeper and richer financial experiences that are seamlessly part of a brand’s customer journey. Research commissioned by Railsr uncovered growing demand for new and improved financial experiences and better rewards from consumers.
It found that 39% of consumers are interested in accessing financial services like credit, loans or investments from brands they love and trust; rising to 51% of 18-24 year olds. At the same time, 41% would be interested in a credit card that offered early access to tickets, exclusive offers, or other high-value rewards from their favourite high-street brand.
This new consumer trend will likely continue and increase in the future as the landscape of banking changes. Embedded Finance Experiences are the future of finance, but the opportunity here is vast and hugely untapped. Brands should be looking to invest in this in the future and instead of thinking in terms of delivering banking or cards, brands need to build next level financial experiences, at a pace previously unimaginable to stay relevant with consumers.
With the likes of brands and sports clubs now starting to use reward services to target customers accurately, these services will enable them to know who its customers are, allowing them to put customers at the heart of their business. This will allow brands and sports clubs to engage with customers and fans, using finance as a strategic tool to monetise with them to deepen relationships, generating revenue and relevance.
As customer trends change rapidly, an increasing demand for a digital banking experience from millennials and Gen Zers will transform how the entire banking industry operates over the next ten years. Innovation and evolving with customer expectations will be key in order to have continued success in the market and Embedded Finance Experiences contributing to this success.
Embedded finance refers to the integration of financial services into non-financial platforms, allowing companies to offer financial products directly within their customer experiences.
Digital natives are individuals who have grown up in the digital age, familiar with technology and the internet, and who expect seamless digital experiences in all aspects of life, including finance.
Fintech, or financial technology, refers to the use of technology to provide financial services, including banking, investing, and payments, often aimed at improving user experience and efficiency.
Consumer behavior in finance studies how individuals make decisions regarding financial products and services, influenced by factors such as technology, convenience, and personal preferences.
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