Dublin, July 01, 2024 (GLOBE NEWSWIRE) -- The "Global Embedded Finance Market 2024" report has been added to ResearchAndMarkets.com's offering.
The global embedded finance market is undergoing a dynamic shift, transcending traditional financial service models and establishing a new paradigm for financial transactions. By integrating financial services directly into non-financial platforms and applications, embedded finance is revolutionizing how consumers and businesses access and use financial products. With an impressive projected payment volume that is set to exceed EUR 6 trillion by the year 2025, the embedded finance sector stands at the forefront of a financial services evolution.
AI's Impact on the Embedded Finance Sector
Artificial Intelligence (AI) is proving to be an integral part of this transformation, significantly contributing to an enhanced customer experience, robust risk management, and effective fraud prevention within the sector. Major global platforms are now leveraging AI's capabilities to refine operations and service delivery. However, this integration is met with challenges related to transparency and security as well as the need to address legal, operational, and reputational risks. Organizations are navigating these complexities while harnessing AI's potential for innovation.
Data Security: A Priority in European Embedded Finance
Notably, the United States currently leads in global embedded finance revenue, generating over EUR 20 billion in 2022. However, European markets show strong potential for growth, with projections indicating a reach of more than EUR 150 billion by 2028. Concurrently, Asia-Pacific regions are expected to see substantial advancements, with projections of more than doubling Europe's figures by 2024. Amidst this expansion, data security remains a pivotal concern within the European embedded finance landscape, spotlighting the ongoing need for stringent data protection measures.
Future Challenges and Market Projections
Looking forward, the embedded finance market must contend with potential uncertainties, including how it will move away from established financial models, address self-competition, and manage the intricacies of collaboration. Fintech platforms are increasingly envisioning a future where most financial services exist primarily outside traditional channels, such as banks, with the consumer retail sector showing overwhelming support.
These challenges present not just obstacles but also opportunities for continued innovation and growth within the embedded finance industry. With its significant projected payment volume and widespread use across industries, embedded finance is poised to redefine the realm of financial services on a global scale.
Concluding Remarks
The global embedded finance market is decisively set for a transformative phase filled with substantial growth and advancements. As AI continues to play a pivotal role, stakeholders are encouraged to remain cognizant of the obstacles that accompany this technological integration. Amidst the potential and growth, prioritizing data security, particularly in the European market, will be crucial in maintaining consumer trust and the integrity of the financial ecosystem at large. The industry is charting a course towards an innovative financial future, with embedded finance at the vanguard of this changing tide.
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