Embedded Finance: Rewiring the Value Chain of Financial Services

By Dr. Manuel Thomet, Head Embedded Finance & BaaS at Synpulse

Not long ago, accessing a financial product or service meant visiting a branch. Or navigating a standalone app. Today, that is changing fast. Financial services are becoming invisible, woven into the platforms, marketplaces, and everyday tools that consumers and businesses already use. From 2026, a new frontier is emerging: financial services are increasingly accessible through AI assistants such as ChatGPT, Perplexity, or Claude. The implications for banks, fintechs, and non-financial companies alike are profound. The way financial services are distributed, consumed, and monetised is changing – fundamentally and irreversibly.

The Evolution of Banking: From Visible to Invisible

Financial services are not a primary need, but they are part of virtually every transaction that satisfies one. Whether buying a home, paying for groceries, or booking a trip, a financial step is always involved. Today's technology makes it possible to embed that transaction seamlessly into the primary journey, without the consumer ever stepping outside it. The result is a shift from banking as a destination to an invisible layer beneath experiences people already have. The best Embedded Finance solutions deliver relevance at exactly the right moment.

Embedded Finance denotes a new configuration of the financial services value chain, in which non-financial companies collaborate with regulated providers to deliver financial products seamlessly within existing consumer journeys. It is the umbrella term for two demand-side models available to non-banks: Embedded Insurance and Embedded Banking.

On the supply side, Finance as a Service enables regulated institutions, insurers and banks, to make their products and capabilities available via APIs. Banking as a Service, through which licensed banks provide their infrastructure to non-licensed companies, and Insurance as a Service, through which insurers do the same, sit at the centre of this model. Together, they give rise to a value chain where the roles of producer, enabler, and distributor are increasingly separated and recombined.

When a financial product appears at exactly the right moment in a non-financial journey, adoption friction drops dramatically.

Consumers Are Ready: The Tipping Point Has Been Reached

Consumer adoption of Embedded Finance is no longer in question. According to the study "Embedded Finance and BaaS in Switzerland: Outlook 2024" (Synpulse and Swiss NextGen Finance), the adoption tipping point, approximately 16% of potential users, as identified by Everett M. Rogers’ Diffusion of Innovations theory, has already been crossed in three of the five banking categories. Regular use stands at 33.1% for payments, 26.6% for retirement provision, and 25.1% for investing. In savings (14.9%) and financing (14.0%), adoption is approaching the threshold.

What drives adoption? Speed and efficiency top the list, cited by 43.5% of users. Cost follows at 17.8%, and accessibility, gaining access to services that would otherwise be difficult to obtain through conventional banking channels, at 13.9%. When a financial product appears at exactly the right moment in a non-financial journey, adoption friction drops dramatically. Traditional channels cannot easily replicate that contextual relevance.

The Business Case: Revenue on Both Sides

The data is compelling: between 50% (payments) and 85.7% (investing) of non-banks consider their Embedded Banking offerings economically relevant, actively generating revenues from them. On the supply side, banks operating BaaS models report similar figures: 58.3% in financing and 80% in investing cite their BaaS activities as economically relevant. Embedded Banking is not a peripheral experiment. It is a revenue-generating reality.

For non-financial companies, the benefits are multi-dimensional: new revenue streams, higher consumer retention, improved conversion rates, and deeper data-based insights. Digital platforms and SaaS providers are particularly well-positioned, given their existing infrastructure and strong consumer relationships.

For banks, BaaS is a complementary business model, not a replacement. The data shows that 47.6% of banks cite expanded sales and new revenue streams as the primary driver, with 30.9% pointing to access to new consumer segments. Technology modernisation accounts for 14.2%. Yet 54.2% of participating banks had not yet made a strategic decision on BaaS. The window for early movers remains open.

Thought Leaders, Shapers and Makers: A Shared Conviction

Recent evidence from the MoneyToday article series on Embedded Finance in Switzerland, drawing on 84 quotes from 29 industry voices, points to one conclusion: Embedded Finance is no longer a future vision. Financial services will increasingly take place where decisions are made, not at the bank counter. Revenue is already materialising: one participating bank reported growth of 70% in 2024 and 50% in 2025. For banks, the question is no longer whether Embedded Banking is relevant, but how to position within the new value chain, and how quickly.

The Strategic Imperative: Act Now

For both banks and non-banks, the immediate priority is a strategic decision, not further analysis. Consumers have crossed the adoption threshold, revenues are materialising, and early movers are already pulling ahead. Banks need to decide whether they want to operate BaaS as a business model, and how to position themselves successfully within the new value chain. Non-banks should be identifying the use cases and partners that turn the opportunity into revenue. Embedded Finance is not a technology project. It is a strategic choice, and the time to make it is now.