Every company was going to be a fintech company – how’s that going?

This shift became known as embedded finance, which is a term used to describe non-financial brands offering financial products directly within their platforms. The idea was that delivering embedded financial services at the point of need would boost conversion, drive loyalty and open up new revenue streams. 

The vision has captured the imagination of global markets, with Boston Consulting Group (BCG) forecasting that 50% of global banking revenue will be earned by non-banks by 2030, up from 28% in 2022. Five years on, how is embedded finance living up to this promise?

Outside of the Buy Now, Pay Later (BNPL) sector, broader adoption has stalled. Key setbacks—including regulatory missteps and high-profile operational failures—have dampened the enthusiasm of consumer-facing brands and enterprise platforms alike. Yet as we move into 2025, a resurgence is underway.

Business models are shifting away from being so narrowly focused on technology and are now extensively taking into account the regulatory, operational and customer complexities that have limited adoption to date. To better understand where we are and how we’ve reached this point, let’s first look at where we’ve come from.

What the early days of embedded finance taught us

The initial phase of embedded finance was led by fintechs and defined by rapid innovation and deployment. Here, we saw that speed to market sometimes compromised regulatory compliance, operational resilience, and customer support. While this approach accelerated adoption and visibility, it also exposed systemic vulnerabilities.

BNPL is a good example. While the innovation has allowed millions of consumers to spread the cost of purchases, it also raised affordability questions from a regulatory and good customer outcomes perspective. 

While BNPL is often seen as the poster child of embedded finance, many brands have also integrated personal loans, savings accounts, insurance, and other financial services. To achieve sustainable scale for all these services and potentially add more to enter the mix, the sector requires a more mature operating model – one that reflects a shift from experimentation to long-term value creation. At the centre of this model is trust; that embedded finance can chart a path to future growth.

Trust as a catalyst for scaling embedded finance

Brands need embedded finance partners with the right level of technological, customer, operational and regulatory excellence. After all, as a brand, the purpose of deploying embedded finance is to boost customer engagement and revenues. But if customer support fails, systems face outages, or regulators intervene, a loss of customer trust and a subsequent dip in revenues will follow.

Embedded finance could run the risk of doing precisely the opposite of what it aims to do. For embedded finance to work, consumers must trust both the brand and the financial institution enabling these services. According to our latest research exploring the impact embedded finance has had on brands, we found that 57% of brands want to promote their embedded finance provider as a trusted name. Many brands have crossed the threshold of deciding whether embedded finance is a worthy investment; the question is how and with whom?

Why big banks and big brands bring trust and scale

To date, embedded finance has been led by fintechs because they are used to providing technology infrastructure to third parties at speed. Banks have been slower to capitalise on the embedded finance opportunity as their value proposition has historically focused on serving customers directly. However, this is changing. 

A number of banks—both large and small—have built high-quality tech stacks, which puts them in a prime position to serve brands. Furthermore, banks also intrinsically possess customer support, operational rigour, governance structures, and, quite frankly, the balance sheet to support large-scale financial service roll-outs.

Big brands that see the promise of embedded finance but have been unsure whether they can find a partner that can manage the complexities of delivering regulated financial services to millions of customers now have a solution. Partnerships between recognised financial institutions and consumer-facing brands not only solve the trust problem in embedded finance but also drive scale.

For example, at NatWest Boxed, we recently announced one of the largest embedded finance roll-outs in the UK through our partnership with The AA, which will initially target over three million personal AA breakdown members and insurance customers.

Every major embedded financial service needs a bank behind it 

Whether ‘every company will be a fintech company’ remains to be seen.

While rolling out financial services offers many advantages to brands, it’s not without its complexities and may not be for everyone. What we do believe is that those that most benefit are trusted consumer brands with large customer bases that can create a strong return on their embedded finance investment. But that return on investment won’t be realised if embedded finance doesn’t scale successfully.

Brands need a partner with operational resilience, customer service excellence and regulatory expertise to make embedded finance work for millions of customers. Equipped with strong balance sheets, mature compliance frameworks, and the trust of millions of consumers, banks are well-positioned to be the partner of choice for major brands. So while I don’t believe that every company will become a fintech company, I do believe that every major embedded financial service will need a bank behind it.

Andy Ellis is the CEO at NatWest Boxed.