The Latest Embedded Lending Industry Statistics Explained
The embedded finance industry, which includes embedded lending, is projected to generate $7.2 trillion in revenue globally by 2030.
The statistic that the embedded finance industry, encompassing embedded lending, is expected to generate $7.2 trillion in revenue by 2030 reflects the significant growth potential of integrating financial services into non-financial products and services. Sectors such as e-commerce, technology, and healthcare are increasingly leveraging this model to offer seamless and convenient financial solutions to customers. The projected revenue highlights the expanding role of embedded finance in transforming traditional banking and lending practices, driving innovation, and enhancing customer experience. This trend underscores the importance of businesses embracing embedded finance to stay competitive and capitalize on the evolving landscape of financial services.
The embedded finance market is anticipated to be worth $138 billion by 2026, with embedded lending a key part of this segment.
The statistic indicates that the embedded finance market, which involves integrating financial services into non-financial products and services, is projected to reach a value of $138 billion by the year 2026. Within this market, embedded lending is expected to be a significant component driving this growth. Embedded lending refers to the seamless integration of lending capabilities into various platforms and applications, providing customers with convenient access to credit or loans at the point of need. The anticipated value of $138 billion underscores the increasing trend of financial services being embedded into everyday products and services, highlighting the potential for significant innovation and disruption within the financial industry in the coming years.
The percentage of unbanked people worldwide has declined from 28% to 22% in large part due to embedded lending solutions.
The statistic indicates that the proportion of unbanked individuals globally has decreased from 28% to 22%, a significant improvement that can be attributed largely to the implementation of embedded lending solutions. Embedded lending solutions, also known as integrated or in-app lending, refer to financial services seamlessly embedded within digital platforms or applications. These innovative financial products have enabled easier access to credit and financial services for underserved populations, thereby contributing to the reduction in the number of unbanked individuals worldwide. This shift demonstrates the impact of leveraging technology and financial innovation to promote financial inclusion and empower individuals who were previously excluded from traditional banking systems.
In the UK, 78% of businesses believe embedded finance improves their customer experience, with embedded lending playing an important role.
The statistic indicating that 78% of businesses in the UK believe embedded finance enhances their customer experience, with embedded lending being a key factor, suggests a strong positive perception and adoption of financial technology solutions in the business industry. Embedded finance refers to the integration of financial services and products directly into platforms or applications beyond traditional financial institutions. The high percentage of businesses recognizing the benefits of embedded finance signals a growing recognition of the importance of seamless financial services in enhancing customer experiences, streamlining processes, and driving business growth. The emphasis on embedded lending specifically highlights its significance in providing businesses with easy access to capital, fueling growth opportunities and improving financial flexibility for both businesses and their customers.
Amazon Lending, a form of embedded lending, has issued $3 billion in loans since its inception.
The statistic, “Amazon Lending, a form of embedded lending, has issued $3 billion in loans since its inception,” highlights the significant monetary impact of Amazon’s lending program. Embedded lending, a strategy where loans are seamlessly integrated within a platform or service, has proven successful for Amazon as evidenced by the substantial $3 billion in loans disbursed thus far. This statistic reflects the trust and confidence that borrowers, likely Amazon sellers or small businesses, have in the program, as well as the scalability and reach of Amazon’s platform to provide financial services. The sheer magnitude of loans issued underscores the importance and growth of alternative financing options within the e-commerce ecosystem.
Embedded finance has helped 300 million people globally gain access to financial services like loans.
The statistic that embedded finance has helped 300 million people globally gain access to financial services like loans refers to the significant impact of embedded finance technologies on expanding financial inclusion. Embedded finance, which integrates financial services into non-financial platforms like e-commerce or mobile apps, has played a crucial role in reaching underserved populations around the world with essential financial products. By leveraging data and technology, embedded finance has enabled millions of individuals to access loans and other financial services that were previously out of reach, fostering economic empowerment and driving financial inclusion on a global scale.
Shopify, through its embedded lending product, provided $1.2 billion in loans and cash advances in 2020.
The statistic indicates that Shopify, a popular e-commerce platform, offered a total of $1.2 billion in loans and cash advances to businesses through its embedded lending product in the year 2020. This demonstrates Shopify’s commitment to supporting small and medium-sized businesses by providing them with financial assistance to grow and expand their operations. By offering these financial services, Shopify aims to empower entrepreneurs to invest in their businesses, increase their sales, and ultimately thrive in the competitive e-commerce landscape. The $1.2 billion figure highlights the significant impact that Shopify’s lending program had in supporting the growth and success of its merchant base during the challenging economic conditions of 2020.
Square Capital facilitated over 60,000 business loans amounting to $400 million in 2015, demonstrating the potential of embedded lending.
The statistic indicates that Square Capital, a financial services company, played a crucial role in facilitating over 60,000 business loans with a total value of $400 million in the year 2015. This showcases the effectiveness and potential of embedded lending, where financial services are integrated into the operations of businesses. By providing easy access to capital for a large number of businesses, Square Capital has demonstrated the impact of their lending services in supporting the growth and development of small and medium-sized enterprises. The substantial amount of loans facilitated highlights the significant role that embedded lending can play in fostering entrepreneurship and economic prosperity.
Point-of-sale financing, an aspect of embedded lending, is expected to grow to $2.52 trillion by 2027.
The statistic indicates that the practice of point-of-sale financing, a component of embedded lending where financial services are integrated seamlessly into the purchase process, is projected to see a substantial increase in value, reaching $2.52 trillion by the year 2027. This growth trend suggests a significant expansion in consumer adoption of point-of-sale financing options, where individuals can access credit and installment payment plans directly at the point of purchase. The statistic highlights the increasing popularity and convenience of this financial service model, as more consumers opt for alternative payment methods and seek flexibility in managing their expenses. Ultimately, the predicted rise in point-of-sale financing to $2.52 trillion by 2027 reflects a shift towards more accessible and tailored financial solutions in the retail and consumer finance sectors.
Nearly 90% of consumers prefer financing at the point-of-sale, pointing to the demand for embedded lending solutions.
The statistic indicating that nearly 90% of consumers prefer financing at the point-of-sale highlights a strong consumer preference towards embedded lending solutions. This suggests that consumers value the convenience and flexibility of being able to access financing options at the time of purchase rather than seeking external sources of credit. This high preference for point-of-sale financing underscores the growing demand for seamless and integrated lending solutions within the shopping experience. Businesses that offer embedded lending solutions stand to benefit from meeting this consumer demand and potentially increasing sales by providing customers with a convenient and desirable payment option.
Affirm, a leader in embedded finance, processed more than $5.6 billion in loans in 2020.
The statistic that Affirm, a prominent player in the embedded finance industry, processed over $5.6 billion in loans in 2020 highlights the significant scale and impact of Affirm’s loan services during that year. This substantial figure indicates the substantial financial activity driven by Affirm in facilitating consumer financing and lending opportunities. By successfully processing such a sizeable volume of loans, Affirm has demonstrated its market presence and importance in the financial services sector. It underscores the trust and utilization of Affirm’s loan platform by customers and businesses alike, showcasing its effectiveness and stability as a finance partner.
40% of companies plan to engage in embedded finance services like lending by 2023.
The statistic indicates that 40% of companies are expected to offer embedded finance services, such as lending, by the year 2023. Embedded finance refers to the integration of financial services into non-financial platforms or businesses, enabling them to provide financial products and services seamlessly to their customers. This trend suggests a growing interest among businesses to expand their offerings beyond their core products and incorporate financial services as part of their value proposition. By engaging in embedded finance, companies aim to enhance customer experiences, increase revenue streams, and gain a competitive edge in the market.
The global embedded finance industry is expected to grow at a compound annual growth rate (CAGR) of 57% between 2020-2026.
The statistic regarding the global embedded finance industry’s growth projected at a compound annual growth rate (CAGR) of 57% between 2020 and 2026 indicates a rapid pace of expansion within the industry. Embedded finance refers to the integration of financial services into non-financial platforms, such as e-commerce websites or mobile applications. This high CAGR suggests a strong market demand for embedded finance solutions, likely driven by factors like increasing digitalization, evolving consumer preferences for seamless financial experiences, and advancements in technology enabling the integration of financial services into various products and services. The projected growth rate signifies significant opportunities for innovation, investment, and partnerships within the embedded finance sector during the specified timeframe.
Klarna, a company offering point-of-sale loans, saw a 44% increase in the use of its services in 2021.
The statistic indicates that Klarna, a company specializing in point-of-sale loans, experienced a significant 44% increase in the utilization of its services during the year 2021 compared to the previous period. This growth suggests a rising trend in the adoption and popularity of Klarna’s offerings among consumers. The increase may be attributed to various factors, such as changing consumer preferences towards flexible payment options, expanded market reach and partnerships, effective marketing efforts, and possibly economic conditions driving greater demand for loan services. The substantial rise in service usage underscores Klarna’s success in capturing a larger market share and meeting the evolving needs of customers seeking convenient and accessible financing solutions in their point-of-sale transactions.
Asia-Pacific possessed the largest share of the global embedded finance market in 2020.
The statistic ‘Asia-Pacific possessed the largest share of the global embedded finance market in 2020’ indicates that the Asia-Pacific region, encompassing countries such as China, Japan, and South Korea, had the highest level of penetration and adoption of embedded finance solutions compared to other regions worldwide. Embedded finance refers to the integration of financial services into non-financial platforms such as e-commerce websites, mobile apps, and social media platforms. The fact that Asia-Pacific led this market in 2020 suggests a strong appetite for innovative financial products and services within the region, as well as a conducive technological and regulatory environment for the growth of embedded finance solutions.
The fintech platform market, inclusive of embedded lending, holds 60% of the total market in 2020, and is projected to exhibit the highest CAGR between 2021 and 2026.
The statistic indicates that in the year 2020, the fintech platform market, which includes embedded lending services, comprised 60% of the total market share. Moreover, it is projected to display the highest Compound Annual Growth Rate (CAGR) between the years 2021 and 2026. This suggests that the fintech sector, especially with a focus on embedded lending within platforms, has been a dominant force in the market and is anticipated to experience rapid growth over the coming years. This growth trajectory highlights the increasing adoption and significance of fintech solutions, particularly those integrating lending services, in the financial industry.
Conclusion
Overall, the embedded lending industry statistics highlight the significant growth and impact of this evolving sector. The data reveals promising trends that indicate a thriving market with ample opportunities for stakeholders. As technology continues to advance and consumer behavior shifts, embedded lending is positioned to further revolutionize the financial services landscape. Keep an eye on these statistics to stay informed and make informed decisions in this dynamic industry.
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