Embedded Finance Could Unleash Business Growth | YouLend | Money20/20 Europe

At Money 20/20 Europe, we spoke to Jakob Pethick from YouLend, to find out about the advancements taking place in embedded finance, a market that is expected to reach nearly US$385 billion by 2029, and some very real use cases to boot.

Pethick points out the significant potential for banks through embedded lending, offering new ways to provide capital and how the technology is starting to pop up not only in ecommerce but traditional industries too.

In this revealing interview, Pethick explains that he sees a vast array of sectors ripe for embedded finance integration. Historically dominant in digitally savvy areas, embedded finance is now starting to be seen in more traditional sectors like pubs, restaurants, convenience stores, and trades such as plumbers and electricians. The primary driving force behind this adoption is the desire of businesses, exemplified by platforms like Amazon, to offer financing options that help small businesses grow faster and foster customer loyalty.

Embedded lending, a subset of the broader embedded finance market, presents an attractive opportunity for banks and financial institutions. As Pethick notes, this model allows banks access to cheap capital, which they can then offer to their clients. The widespread adoption of embedded lending signifies a shift in how financial services are delivered, creating new avenues for banks to engage with a broader customer base.

A partnership with Booking.com

YouLend has also made significant strides in providing financing solutions, through partnerships with major commerce platforms. A notable example is their collaboration with Booking.com, which addresses the financing challenges faced by hotels. This partnership enables hotels to access much-needed funds, illustrating the tangible benefits of embedded finance.

Looking ahead, YouLend is focused on expanding its current product offerings across the US, Europe, and the UK. According to Pethick, they have only scratched the surface of what is possible in these regions and see significant untapped potential. Rather than diversifying into new products, the company aims to deepen and enhance their existing offerings.

Addressing concerns about the environmental and social impact of financial products, Pethick highlighted YouLend’s commitment to sustainability and social responsibility.

A study conducted alongside Experian, titled ‘Widening Access to Capital’, revealed that the financing provided by YouLend has a substantial social impact. In fact it found that YouLend contributes £6.8 billion in SME revenue to annual UK GDP. This underscores YouLend’s dedication to not only financial success but also positive societal contributions. They’re also bucking trends in other areas according to another study which found that female-led SMEs are more likely to secure financing from embedded finance providers.

Watch the interview to find out more and watch out for more coverage from Money20/20 coming soon.