The study predicts embedded finance - where fintech becomes embedded non-financial specific products and services - will dominate the industry by 2030. Contributors include 11:FS, Bain Capital, Currencycloud, eToro, iwoca, Locke Lord, Moneyfarm, N26, Onfido, Plaid, Plum, Qadre, Thought Machine, Tribe Payments, Wirex and Zego.

By 2030 the industry expects embedded finance to change market structures and business models.
Payments are already moving in that direction with taxi applications and stores without checkouts removing the act of paying, and the transaction is automated in the background. Embedded finance will see software companies - many of them big tech firms - embed financial services within their offerings to attract and retain customers. As fintech continues to be embedded into financial and increasingly non-financial products, we will no longer categorise fintech as its own distinct sector, just as no one today talks about the Internet as a discrete market.

Key findings:
● More innovation, more fintechs, but less funding
○ An overwhelming 86% see the next decade of fintech building on the first, with fintech innovation accelerating. Only 14% said that innovation and change has peaked or plateaued.
○ Three quarters of respondents state that there will be an increase in the number of fintechs. And 37% said that the number of fintechs is likely to double by 2030.
○ Fintech funding is likely to change with nearly two thirds (60%) agreeing that investors will favour profitability over “moonshots”.
● Banks, big tech and fintech
○ No respondents saw the success of fintechs leading to the end of incumbent banks. In fact, just over half (51%) claimed banks will become platforms that curate fintech services for their customers, while 43% think that fintechs and traditional providers will simply exist alongside each other as they do now.
○ Just over a third (38%) see banks becoming ‘dumb pipes’, like the relationship between a mobile operator and WhatsApp or Netflix.
○ Less than one in ten thought that Big Tech firms have a chance of dominating the market completely. 34% said that Big Tech will become aggregators of bank and fintech services.
● Machine learning, IoT and automation will drive embedded finance
○ The three most important technologies today - Open Banking, data analytics and blockchain - will not be the most important in 2030.
○ The three most important financial technologies in 2030 will be machine learning (71%), the internet of things (49%) and automation (40%)
○ These are all technologies that will support embedded finance, where non-financial services businesses can give their customers access to financial services and payments, often in an invisible, seamless way.
“Fintech 2030 is a detailed journey into the future of finance, giving us a glimpse into not only how fintech will change, but how it will change every market it touches,” said Alex Reddish, Chief Commercial Officer at Tribe Payments. “While every contributor has their own vision, the consensus is that fintech will continue to evolve, with innovation accelerating. And just as we no longer think of “online businesses”—because every business is online—embedded finance will become so ubiquitous that fintech as a category becomes less and less useful. The very nature of embedded means that fintech firms will need to partner, collaborate and integrate in the search for scale and success.”

“Fintech is, on one hand, moving “down” towards becoming a platform, and on the other hand, moving “up” towards ever more niche services and specialisms,” said Simon Taylor, Co-founder of 11:FS. “While it shifts vertically, it is also moving horizontally in terms of the customer segment. For instance, challenger banks started at the consumer, digitally savvy end of the market. The question now for fintech is how to go from the creative teenage phase to the productive and profitable phase. Do they move down to be a platform? Up to niches and higher per customer revenue? Or move left and right in terms of product offering? Regardless of the path taken it is my firm belief that fintech is only 1% finished, and the next decade is going to be its most exciting and challenging yet.”