A subtle but significant change is underway when it comes to how financial services reach the businesses and consumers who need them. The headline story of fintech disruption over the past decade has focused on neobanks displacing high street institutions and payment apps reshaping how money moves. The deeper story, less visible but arguably more consequential, sits in the infrastructure layer beneath all of that activity. Components that once required a banking licence, a compliance team and several years of engineering work to assemble are now available as discrete services that any reasonably technical business can integrate.
The parallel with cloud computing is striking. Before AWS, owning servers meant capital expenditure, real estate, IT operations and lead times measured in months. After AWS, the same compute resources became something a developer could provision in minutes. Amazon did not conjure cloud computing from nothing. It took infrastructure that had previously been bundled tightly with ownership and stripped it apart into pieces businesses could rent on demand. A garage operation gained access to capabilities that had been reserved for companies with deep pockets and dedicated server rooms. Financial services are now travelling the same road.
Competing on more than scale
Sophisticated payment, lending and account capabilities were, until recently, the territory of large institutions. To offer them in any serious way, a company needed regulatory standing, internal expertise and either the budget to build from the ground up or the negotiating heft to extract favourable terms from a major processor. Everyone else accepted the constraints of off-the-shelf products that limited how they could serve their own customers.
That position is shifting. McKinsey’s research on embedded finance documents how the unbundling of banking allows businesses to construct their own combinations of payment acceptance, card issuance, lending and deposit functionality, each piece sourced from a specialist provider. The advantage is not just speed or cost. It is the freedom to compete on the qualities that actually differentiate one business from another: customer experience, relevance, vertical expertise. A freight platform can extend credit lines to operators who need them. A subscription business can launch a branded card programme. A marketplace can settle in multiple currencies. None of these companies need to become banks. They simply need to assemble the right components in the right way.
The embedded finance opportunity matures
What customers expect from the platforms they use has evolved quickly. Financial features are no longer treated as bolt-ons that come from somewhere else. They are simply part of the experience, and the underlying provider has become largely invisible to the end user. The test is whether the functionality feels natural and works without friction.
Behind that user-facing simplicity, the integration options available to platform builders have grown considerably more flexible. Early efforts involved adding a checkout option or a financing link. Today’s tooling supports complex combinations such as stored value accounts, instalment products, cross-border functionality and real-time risk decisioning. New capabilities can be turned on as a business grows, without forcing engineering teams to redesign systems. According to Bain & Company, embedded finance transaction value in the United States alone will surpass $7 trillion in 2026, representing over 10% of all US financial transactions.
This is no longer a side feature. When financial functionality lives inside the platform a customer already uses every day, that customer’s relationship with the platform changes. They consolidate behaviours that previously sat across several apps and services. Engagement deepens. Modular infrastructure is the mechanism that lets that consolidation happen at scale.
Access for the rest of the market
Size used to be the deciding factor. Large platforms could commission custom arrangements because their volumes justified the work, and they had engineers on staff to keep everything running. For smaller and mid-sized businesses, the picture was different: a narrower set of options, less leverage in commercial conversations, and limited ability to match the financial features that bigger competitors offered.
Modular providers change this calculation by handling the regulatory and technical heavy lifting on behalf of their customers. Capabilities that previously required serious investment, such as card issuing, acquiring infrastructure and instalment lending, become configuration choices rather than construction projects. A growing e-commerce business can issue virtual cards for supplier payments. A regional software vendor can offer collections and invoicing inside its product. A marketplace can introduce buy-now-pay-later without taking on credit risk or building a loan book.
The wider effects extend beyond individual companies. The Bank for International Settlements has cautioned that concentrating financial infrastructure among a small number of dominant providers creates systemic risk, raises questions about market power and complicates data governance. Where modular tooling enables more platforms to offer real financial capabilities, the system becomes less reliant on a handful of large players. Customers gain more choice, regulators see a less concentrated landscape, and competition broadens across the market.
More than a new revenue stream
The discussion around embedded finance often defaults to commercial metrics: interchange income, lending spreads, processing margins. Those numbers matter, and they are part of why so many platforms are looking at this space. But framing the opportunity purely in revenue terms misses a more interesting possibility.
The infrastructure that enables a platform to offer financial services also generates data about how its customers actually engage with money. When that data is treated as a resource for the customer rather than purely a business asset, and especially as AI-driven analysis makes it easier to surface patterns in real time, it can power genuinely useful tools. Cash flow projections, alerts on upcoming obligations, recommendations on smoothing irregular expenses, clearer views of where money is going. For owners of small businesses in particular, the difference between flying blind and having that kind of visibility can be substantial.
There is no contradiction between this and good commercial outcomes. Platforms that help their customers run their financial lives better tend to keep those customers longer. The companies likely to come out ahead in the next phase of embedded finance will be the ones that grasp the distinction between mining customers for fees and building services that genuinely serve them.
Steady progress, real
There is no dramatic narrative arc here. No legacy institution collapses overnight, no single product upends an entire category. What is happening instead is a slow, structural widening of who can offer financial services to whom. More platforms reaching more customers, with less friction at every step, and lower entry costs than at any previous point.
The infrastructure is ready, the components work, and the technical and regulatory barriers that once kept smaller players out have come down substantially. The interesting choice now sits with businesses themselves. They can treat modular finance as a way to bolt on another line of revenue, or they can use it to build experiences that materially improve the financial lives of the people they serve. The tools do not dictate which path gets taken. That decision belongs to whoever is doing the building.
About the author
Scott Dawson, CEO at DECTA UK, is a highly motivated and results-oriented individual with over 20 years of experience within the payments industry. He is committed to driving DECTA UK strategy forward, with a focus on its growth within the UK and supporting small to medium businesses with its broad range of payment solutions.
