Consumer Lending: The Next Frontier of Embedded Finance

As the wave of momentum around Fintech 2.0 and embedded finance has accelerated over the last decade-plus, a few spillways were obvious from the outset. Neobanks and PFM tools were the first to take the leap, leveraging fintech infrastructure platforms like Rize to stand up and streamline core banking offerings for consumers and businesses and achieve product parity with legacy institutions. Payments soon followed, with commerce platforms and other financial and non-financial companies turning to providers like Dwolla for faster, more streamlined money movement.

For each of these early adopters, embedded finance has several clear value propositions, including:

  • Better economics- Leverage all-inclusive, transparent economics that work at scale

But while the focus remains on the more obvious use cases, embedded finance is still early in its adoption. These same value propositions that have been proven out in banking and payments apply directly to another segment as well: consumer lending.

Lending has always been a key engine of financial services, even in low-interest rate environments. Consumer lending, in particular, though, has undergone a significant transformation over the last several years. Online, tech-enabled lenders and servicers have entered the fray, overturning decades of dominance by traditional, brick-and-mortar players. SoFi, LendingClub, and Mission Lane, among others, have built incredibly successful businesses by deploying digital, customer-centric solutions. Alternatives like Affirm and Kafene have similarly disrupted the space at the point-of-sale and beyond. But as builders increasingly target underserved, low-credit demographics and the $15.6 trillion market becomes saturated, the advantages of embedded finance within consumer lending become clear [CNBC].

Embedded finance, as with banking and payments before, has the same four value propositions within consumer lending:

  • Better economics- Earn interchange alongside additional interest and fee-based revenue as well as monitor use of funds, encourage on-time payments, and ensure maximum loan repayment


Largely neglected by embedded finance thus far, consumer lending is poised for disruption. Flexible fintech-as-a-service players like Rize are perfectly positioned to help facilitate this crucial transition, enabling all of the value props listed above — and more — via seamless, efficient API-based infrastructure. In just a matter of weeks, companies in the space can transform themselves into agile financial platforms with a wide array of high-margin revenue streams, a highly sticky customer base, and a clear competitive moat into the future. Embedded finance unlocks a massive opportunity for consumer lenders, and Rize helps make it all possible.

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