My journey into embedded finance

I started out doing everything but financial services. After years working in industrial goods, private equity, and other areas, I was forced onto a project related to payments. And it was everything I’d been looking for. 

I fell in love with the pace of change and the complex business model. Unlike many other industries, finance isn’t static—it evolves daily, and the impact is tangible. 

What began as a two-person team in 2017 has grown into a fully developed payments practice in Paris and one of the most successful segments globally. 

The state of embedded finance 

BCG recently produced a report with Adyen based on a survey of thousands of SMBs worldwide, plus platforms leveraging embedded finance. The findings reaffirm what I’ve seen firsthand:

• The market is growing at 50% year over year.
• Platforms integrating embedded finance see a fourfold revenue increase.
• Businesses are shifting beyond traditional financial models to leverage new opportunities.

But behind these numbers lies a fundamental shift in how SMBs operate, and their access to financial tools that were previously out of reach. Embedded finance isn’t just making transactions easier—it’s reshaping the way businesses manage cash flow, obtain credit, and handle risk.

Beyond payments, embedded capital as the next wave 

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Today, embedded finance is largely associated with payments, seamlessly integrating into workflows. But this is just the beginning. For example, nearly all SMBs use some form of payment platform, yet many of these platforms do not incorporate embedded financial services.

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This represents a massive untapped opportunity, particularly for ERPs. If finance isn’t already embedded in their products, the question isn’t if they’ll add it—it’s how.

Capital allocation is where embedded finance is headed next. Being able to unlock credit facilities and seamlessly integrating financing into your daily activities—be it invoice financing or leasing solutions—so that treasury is no longer a burden. 

Imagine a small French retailer leveraging embedded working capital within their POS platform to secure €50,000 in under 24 hours. This would allow them to restock inventory ahead of peak season, avoiding stockouts and driving sales uplift. These are not just transactional benefits; they could be lifelines for small businesses.

Or envision a logistics startup that could access real-time invoice financing through their procurement software. They might cut their cash conversion cycle by 10 days, freeing up liquidity to expand into new markets faster than anticipated.

The AI factor: A 10x accelerator 

What’s going to supercharge this transformation? AI.

In the last 12 months, we’ve seen financial institutions shift from watching AI from the sidelines to investing tens of millions into real deployment and core transformation of their operating and business models. It’s no longer just the Klarnas and Defactos building AI-powered models from scratch—traditional banks and investors are moving fast, too.

But scaling AI in financial institutions comes with challenges:

• Legacy infrastructure that slows down innovation.
• Regulatory burdens that make AI adoption complex.
• The sheer cultural shift required for banks to embrace AI.

Yet, the impact is already undeniable:

• Boosting productivity—automating workflows and streamlining operations.
• Improving risk and compliance—using GenAI to generate reports and synthesize data.
• Unlocking new products and services—leveraging AI to offer hyper-personalized financial solutions.

What excites me most in all this? AI is leveling the playing field for smaller European banks. When we talk about banks and financial institutions, we always talk about the same 20 banks in Europe—maybe 50 banks if I'm generous. But there are scores of European banks that no one ever talks about facing exactly the same challenges. 

While the biggest institutions pour capital into AI innovation, mid-sized and niche banks have an opportunity to leapfrog ahead by partnering with fintechs offering AI-powered, plug-and-play solutions. And that goes beyond major banks and even mid-market banks, to all of the other regulated financial institutions. You have funds, firms, and the entire financial ecosystem.

The future belongs to collaboration 

Embedded finance is evolving fast, and AI is multiplying its impact. But the real winners in this space won’t be those who go at it alone—it will be banks and fintechs that collaborate effectively.

• Banks bring trust, regulatory expertise, and deep capital reserves.
• Fintechs bring agility, seamless experiences, and AI-powered innovation.

Together, they can redefine financial services—unlocking new business models, delivering smarter financial products, and driving the next phase of embedded finance.

Successful partnerships already exist. HSBC's collaboration with Tradeshift is transforming invoice processing and supplier financing. BBVA's embedded financial solutions integrated into Uber's ecosystem demonstrate how embedded finance can scale with everyday platforms.

The future of finance isn’t about competition—it’s about strategic partnerships. The institutions that embrace AI-driven collaboration will lead the next wave of financial transformation.