Asia Pacific Embedded Finance Business and Investment Opportunities Databook – 75+ KPIs on Embedded Lending, Insurance, Payment, and Wealth Segments - Q2 2024 Update

Asia Pacific Embedded Finance Business and Investment Opportunities Databook – 75+ KPIs on Embedded Lending, Insurance, Payment, and Wealth Segments - Q2 2024 Update

According to PayNXT360, the embedded finance industry in the region is expected to grow by 13.9% annually to reach US$73,751.2 million in 2024.

The embedded finance industry is expected to grow steadily over the forecast period, recording a CAGR of 28.2% from 2024 to 2029. The region embedded finance revenues will increase from US$73,751.2 million in 2024 to reach US$255,499.3 million by 2029.

The embedded finance sector in the Asia Pacific region is rapidly evolving, driven by increased digital adoption and integration into non-financial platforms. Recent innovations, strategic partnerships, and regulatory advancements are propelling growth and enhancing financial inclusion. As the region's digital economy matures, embedded finance is set to play a crucial role in shaping the future of financial services.

Growth in the Embedded Finance Sector

The growth of embedded finance in the Asia Pacific region has accelerated significantly over the past few months, driven by increasing digital adoption and integrating financial services into non-financial platforms. This trend is expected to continue, focusing on sub-segments such as embedded payments, lending, and insurance, as companies leverage technology to enhance customer experiences and promote financial inclusion among underserved populations.

In the forthcoming few months, further expansion is anticipated as businesses increasingly acknowledge the significance of providing integrated financial solutions. This transformative process is reshaping traditional financial services into seamless, user-friendly experiences. The region's youthful demographic and rapid digital maturity are expected to drive this growth, with embedded finance becoming a vital component of the evolving digital economy in the Asia Pacific region.

Key Developments in the Embedded Finance Sector

Product Launches and Innovations

Cashfree Payments' Embedded Payments Solution: Launched in March 2024, this solution is designed for software platforms, enabling seamless payment integration for businesses using enterprise resource planning (ERP), customer relationship management (CRM), and other SaaS applications.

Finology Group's Regional Expansion: The Malaysian firm expanded its offerings to include personal loans, mortgages, and insurance, aiming to support financial inclusion by providing embedded finance solutions to financial institutions and consumer brands across the Asia Pacific.

Xendit's Expansion into Thailand: In March 2024, Xendit entered the Thai market, enhancing its embedded finance and digital payment solutions, which already serve a diverse clientele across Southeast Asia, including over 6,000 clients.

Strategic Partnerships

Funding Societies and SGeBIZ Partnership In April 2024, Funding Societies, a leading SME digital financing platform, entered into a strategic partnership with Singapore E-Business (SGeBIZ). As part of this collaboration, Funding Societies integrated its Buy Now, Pay Later (BNPL) solution into SGeBIZ's procurement platform. The two firms aim to provide more than 2,000 SMEs in Singapore with tailored financing solutions to help them enhance their cash flow management in the competitive market.

Mergers and Acquisitions

Finology Group's Acquisition of Local Fintechs: In early 2024, Finology Group, a Malaysian embedded finance firm, acquired several local fintech companies to expand its service offerings, which now include personal loans, mortgages, and insurance. This move is part of their strategy to enhance financial inclusion and support underbanked populations in the region.

Xendit's Acquisition of Payment Solutions: In March 2024, Xendit, an Indonesian fintech, acquired a local payment processing company to bolster its embedded finance capabilities. This acquisition is aimed at enhancing its suite of digital payment solutions, thereby expanding its customer base across Southeast Asia.

Regulatory Changes

Regulators in Asia Pacific are prioritizing the digital transformation of the financial services sector, with a focus on fostering innovation while maintaining financial stability. Initiatives include:

Singapore: The Monetary Authority of Singapore (MAS) launched the Sandbox Express in 2024, a fast-track option for firms to test innovative financial services within a pre-defined environment and parameters. This aims to accelerate the development and adoption of new technologies in the financial sector.

Australia: The Australian government announced plans to introduce a new licensing framework for digital banks in 2024, building on lessons learned from the launch and subsequent failure of several digital banks in recent years. The new framework aims to strike a balance between encouraging innovation and mitigating risks.

Strengthening Cybersecurity and Data Privacy

As financial services become increasingly digitized, regulators are focused on enhancing cybersecurity measures and data privacy protections:

India: The Reserve Bank of India (RBI) issued guidelines in 2024 requiring banks and non-banking financial companies to implement robust cybersecurity controls, including mandatory reporting of major incidents within stipulated timelines. This aims to strengthen the resilience of the financial system against cyber threats.
Japan: The Financial Services Agency (FSA) introduced new regulations in 2024 to enhance data privacy and security standards for financial institutions. This includes requirements for firms to obtain customer consent before sharing data with third parties and to implement strong encryption measures.

Promoting Financial Inclusion through Embedded Finance

Regulators are leveraging embedded finance to drive financial inclusion, particularly for underserved populations:
Indonesia: Bank Indonesia, the central bank, partnered with e-commerce platforms in 2024 to offer embedded financial services such as digital payments and lending to small businesses. This initiative aims to expand access to financial services for the country's large unbanked and underbanked population.
Philippines: The Bangko Sentral ng Pilipinas (BSP) issued guidelines in 2024 for the establishment of digital banks, with a focus on serving the unbanked and underserved segments of the population. The BSP aims to leverage digital banking to drive financial inclusion and support the growth of micro, small, and medium enterprises.

These regulatory and government policies demonstrate the Asia Pacific region's commitment to harnessing the potential of embedded finance to drive innovation, enhance financial inclusion, and maintain the stability of the financial system in the face of rapidly evolving digital transformation.

This report offers a comprehensive, data-centric analysis of the embedded finance industry. It covers lending, insurance, payment, wealth and asset-based finance sectors and provides a detailed breakdown of market opportunities and risks across various sectors. With over 75+ KPIs at the country level, this report ensures a thorough understanding of embedded finance market dynamics, market size, and forecast.

It breaks down market opportunities by type of business model, consumer segment, and distribution model. In addition, it provides detailed information across various segments in each sector of embedded finance. KPI revenue helps in getting an in-depth understanding of end market dynamics.

PayNXT360's research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view of emerging business and investment market opportunities.

Scope

This report provides regional insights, along with an in-depth data centric analysis of the Embedded Finance industry in the Asia Pacific, covering 50+ KPIs for each region and country (650+ charts and 500+ tables in all). Below is a summary of key market segments:

Embedded Finance Market Size and Forecast

• Embedded Finance by Key Sectors
Retail
Logistics
Telecommunications
Manufacturing
Consumer Health
Others

• Embedded Finance by Business Model
Platforms
Enabler
Regulatory Entity

• Embedded Finance by Distribution Model
Own Platforms
Third Party Platforms

Embedded Insurance Market Size and Forecast

• Embedded Insurance by Industry
Embedded Insurance in Consumer Products
Embedded Insurance in Travel & Hospitality
Embedded Insurance in Automotive
Embedded Insurance in Healthcare
Embedded Insurance in Real Estate
Embedded Insurance in Transport & Logistics
Embedded Insurance in Others

• Embedded Insurance by Consumer Segments
B2B
B2C

• Embedded Insurance by Type of Offering
Embedded Insurance in Product Segment
Embedded Insurance in Service Segment

Embedded Insurance by Business Model
Platforms
Enabler
Regulatory Entity

• Embedded Insurance by Distribution Model
Own Platforms
Third Party Platforms

• Embedded Insurance by Distribution Channel
Embedded Sales
Bancassurance
Broker’s/IFA’s
Tied Agents

• Embedded Insurance by Insurance Type
Embedded Insurance in Life Segment
Embedded Insurance in Non-Life Segment

• Embedded Insurance in Non-Life Segment
Motor Vehicle
Fire and Property
Accident and Health
General Liability
Marine, Aviation and other Transport
Other

Embedded Lending Market Size and Forecast

• Embedded Lending by Consumer Segments
Business Lending
Retail Lending

• Embedded Lending by B2B Sectors
Embedded Lending in Retail & Consumer Goods
Embedded Lending in IT & Software Services
Embedded Lending in Media, Entertainment & Leisure
Embedded Lending in Manufacturing & Distribution
Embedded Lending in Real Estate
Embedded Lending in Other

• Embedded Lending by B2C Sectors
Embedded Lending in Retail Shopping
Embedded Lending in Home Improvement
Embedded Lending in Leisure & Entertainment
Embedded Lending in Healthcare and Wellness
Embedded Lending in Other

• Embedded Lending by Type
BNPL Lending
POS Lending
Personal Loans

• Embedded Lending by Business Model
Platforms
Enabler
Regulatory Entity

• Embedded Lending by Distribution Model
Own Platforms
Third Party Platforms

Embedded Payment Market Size and Forecast

• Embedded Payment by Consumer Segments
B2B
B2C

• Embedded Payment by End-Use Sector
Embedded Payment in Retail & Consumer Goods
Embedded Payment in Digital Products & Services
Embedded Payment in Utility Bill Payment
Embedded Payment in Travel & Hospitality
Embedded Payment in Leisure & Entertainment
Embedded Payment in Health & Wellness
Embedded Payment in Office Supplies & Equipment
Embedded Payment in Other

• Embedded Payment by Business Model
Platforms
Enabler
Regulatory Entity

• Embedded Payment by Distribution Model
Own Platforms
Third Party Platforms

Embedded Wealth Management Market Size and Forecast

Asset Based Finance Management Industry Market Size and Forecast
• Asset Based Finance by Type of Asset
Hard Assets
Soft Assets

• Asset Based Finance by End Users
SME’s
Large Enterprises

Reasons to buy

• In-depth Understanding of Embedded Finance Market Dynamics: Understand market opportunities and key trends along with forecast (2019-2028).

• Insights into Opportunity by end-use sectors – Get market dynamics by end-use sectors to assess emerging opportunity across various end-use sectors.

• Develop Market Specific Strategies: Identify growth segments and target specific opportunities to formulate embedded finance strategy; assess market specific key trends, drivers, and risks in the industry.

• Get Sector Insights: Drawing from proprietary survey results, this report identifies opportunities across embedded lending, embedded insurance, embedded finance, and embedded wealth sectors.

•Get insights at segment level, by the distribution model and by business model in key embedded finance segments

•Insights into the asset based finance market size and by type of assets, by end users.