Welcome to the new era of platform potential
Platforms and marketplaces are at the center of a revolution changing the financial service industry as we know it. Emerging technology and growing user demand have opened a window of opportunity for platforms to provide the financial services their SMB users have been missing – but that window will only be open for so long.
BCG and the financial technology platform Adyen conducted a comprehensive evaluation of the embedded finance potential, leveraging quantitative and qualitative data gathered from more than 50 leading platforms and marketplaces and more than 2,000 SMB users globally.
The joint research shows that platforms and marketplaces are at the center of a revolution in the financial services industry:
There is high demand from SMBs for embedded finance: 64% of SMBs are interested in financial services embedded within a platform.
Platforms are uniquely positioned to address the finance needs of SMBs. Having built a central and trusted role in their users’ daily operations, platforms are well-placed to deliver financial services directly into SMBs’ workflows at the exact moment of need.
There are three key financial services categories—cash advances, bank accounts, and card issuing—that offer platforms the quickest path to market and a potential revenue uplift of up to 70%.
Together, cash advances, bank accounts, and card issuing represent an addressable market of approximately $110 billion in revenue in the US, Europe and the UK, which represents around 45% of the total SMB banking revenue pool.
The SMB embedded finance market is still nascent, with less than 5% of SMBs sourcing financial services through platforms. But things are moving fast. Everything points to rapid adoption, with accelerated industry consolidation within verticals and the geographic expansion of leaders. Now is the time to adjust to this new reality.
Platforms with the right timing, technology, and partnerships will thrive, while those without will risk falling behind the speed of market ambition.