The Rise of Embedded Finance: Can London Keep Its Fintech Crown? - Chetan Tak

Finance no longer lives in banks - it lives inside apps.

From India's UPI system to China's all-in-one apps and America's buy-now-pay-later craze, embedded finance is quietly changing how billions of people handle their money. The World Economic Forum (2025) calls it a game-changer that's reshaping traditional banks.

The global embedded finance market is expected to hit a staggering $588.49 trillion by 2030 (Grand View Research, 2024). As tech companies and financial services become increasingly intertwined, countries are racing to weave payments, loans, and insurance directly into the apps we use every day. London used to be the undisputed king of fintech innovation. Now it's facing a tough question: are emerging economies leaving it behind, or is the UK gearing up for a comeback?

How Embedded Finance Works 

At its core, embedded finance breaks down the old wall between financial services and everyday experiences. In the traditional setup, you'd have to leave a website or app and go to your bank to make a payment, get a loan, or buy insurance. With embedded finance, all these services are built right into the platform you're already using seamlessly, instantly, and exactly when you need them.

Take a small business owner using Shopify. They can get financing directly from their Shopify dashboard without ever visiting a bank's website. When you pay for an Uber ride or buy travel insurance inside a booking app, that's embedded finance in action. All this works through APIs and Banking-as-a-Service (BaaS) essentially, banks handle the regulated back-end work while the platforms create smooth experiences for customers (Bain & Company, 2022).

Figure 1: Traditional Finance vs Embedded Finance

Traditional Finance	Embedded Finance
Customer applies through a bank or branch	Service offered directly within an app (e.g., Uber, Shopify)
Long KYC and approval processes	Instant verification via APIs
Bank-designed, generic products	Personalized, contextual offers
Controlled by banks	Enabled through fintech–bank partnerships

Global Context: How Embedded Finance Evolved Worldwide 

A decade ago, banking was straightforward: local, linear, and controlled by banks. Embedded finance turned that on its head by weaving payments, loans, and insurance directly into the apps and platforms people were already using daily. The shift kicked off in the early 2010s when fintech companies used APIs to make finance "invisible" a change that's now reshaping economies around the world.

China and India were the early leaders. China's super-apps, Alipay and WeChat Pay, transformed simple mobile wallets into complete financial hubs where you could do everything. India's UPI, launched in 2016, built an open, government-backed system that now handles billions of instant payments every month. Singapore took a different route its financial regulator created a "sandbox" where companies could safely experiment, making embedded finance a core part of the region's tech identity.

In the UAE, embedded finance is booming at around 30% growth each year (WEF, 2025), fuelled by online shopping and digital lending. The country is positioning itself as the Middle East's go-to hub for embedded payments and financial innovation.

Meanwhile, the US is scaling through big private companies think Apple Pay and Shopify Capital while the UK leads with smart regulation, having introduced open banking rules back in 2018. Together, these different approaches show a clear global shift: finance isn't a separate industry anymore. It's becoming a digital layer woven into everything we do.

Theories & Rhetoric: Transformation or Hype? 

Experts can't agree on whether embedded finance is a genuine revolution or just the latest fintech hype. Bain & Company believes digital platforms are becoming "the new financial distributors”, with traditional banks relegated to invisible back-office roles. From this perspective, embedded finance is simply the natural next step in digital banking moving power from old institutions to new digital ecosystems.

But regulators aren't so sure. The UK's Financial Conduct Authority warns that unregulated embedded products could create hidden credit risks and harm consumers (Financial Conduct Authority). The World Economic Forum (2025) agrees, pointing out that innovation in emerging markets is often racing ahead of proper oversight. Still, the market seems to be betting on speed over safety fintech integrations in Asia and the US are growing far faster than traditional banking systems (World Economic Forum).

The divide is clear: Asia is sprinting forward with innovation, while London is hitting the brakes to focus on rules and consumer protection. The big question now is whether regulation will slow everything down or actually help embedded finance grow in a way that lasts.

Regional Case Study & Comparison: Asia’s Scale vs London’s Early Start 

Now that embedded finance has gone global, the real competition is between Asia's innovation powerhouses and London's regulatory expertise.

In Asia, embedded finance isn't just a trend; it's how people live. India's UPI handles over 18 billion transactions every month (National Payments Corporation of India), weaving payments and credit into everything from grocery stores to government services. China's Alipay and WeChat Pay reach more than 900 million users (Reuters, 2023), offering deposits, loans, and insurance all in one place. Singapore's regulatory sandbox, launched in 2017, lets fintech companies quickly test and roll out embedded products across Southeast Asian markets at impressive speed.

The UK took a different path it didn't chase volume, but it built the foundation. From Barclays Pingit in 2012 to London's contactless transport system in 2014 and the Open Banking rules in 2018, Britain showed the world how to safely integrate finance into daily life. It wrote the playbook that others eventually followed. Today, the UK's embedded finance revenues are expected to double to £15.77 billion by 2029 (The Fintech Times, 2025).

Asia wins on scale; London wins on trust. The real question isn't who started embedded finance first it's who can combine rapid innovation with solid regulation for the years ahead.

Conclusion – Leadership, Lessons, and the Road Ahead

Embedded finance is no longer a fintech trend; it is the new fabric of global finance. While Asia leads in scale and innovation, the UK remains a pioneer in regulatory design and consumer trust. Its early integration of payments into public systems and open banking architecture gave shape to the global model we see today.

Two lessons stand out:

1. Collaboration between regulators and innovators will determine leadership.

2. Consumer trust remains the anchor for long-term adoption.

London may have started the rhythm, but the beat of embedded finance now plays across Mumbai, Singapore, and Shanghai setting the tempo for the decade ahead.

Bibliography

Bain & Company, 2022. Embedded Finance: What It Takes to Prosper in the New Value Chain. [Online] Available at: https://www.bain.com/insights/embedded-finance/

Financial Conduct Authority, n.d. Portfolio letter: FCA strategy for retail banks in 2025. [Online] Available at: https://www.fca.org.uk/publication/correspondence/portfolio-letter-fca-strategy-retail-banks-2025.pdf

Grand View Research, 2024. Embedded Finance Market Size and Share Report. [Online] Available at: https://www.grandviewresearch.com/industry-analysis/embedded-finance-market-report

National Payments Corporation of India, n.d. Enabling digital payments in India. [Online] Available at: https://www.npci.org.in/

Reuters, 2023. China’s digital yuan transactions seeing strong momentum, says central-bank governor Yi. [Online] Available at: https://www.reuters.com/markets/asia/chinas-digital-yuan-transactions-seeing-strong-momentum-says-cbank-gov-yi-2023-07-19/

The Fintech Times, 2025. Embedded Finance Poised to Double UK Revenue to £15.77 bn by 2029. [Online] Available at: https://thefintechtimes.com/embedded-finance-poised-to-double-uk-revenue-to-15-77bn-by-2029/

World Economic Forum, n.d. Why embedded finance is a disruptive force financial institutions can’t ignore. [Online] Available at: https://www.weforum.org/stories/2025/04/embedded-finance-disruptive-force-financial-institutions/