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Almost all of us benefit from the streamlined efficiency of embedded finance, but do many of us actually understand its intricacies? \u00a0As a multi-trillion dollar financial tool, it is worth diving deeper into what the term actually means and how the technology that underpins it works.<\/p>\n
How important is API technology to embedded finance?<\/h2>\n
\u2018Embedded finance\u2019 refers to the incorporation of everyday financial amenities \u2013 banking services, insurance, payments or loans \u2013 into nonfinancial websites and apps. \u00a0In essence, it allows customers to conduct their financial transactions quickly and simply through a business\u2019s own online platform, instead of navigating away (or being redirected) to a bank or financial provider.<\/p>\n
It provides a safe, prompt method of making a transaction, setting up a payment plan, agreeing a loan or sourcing insurance, without the logistical headache of visiting multiple sites or applying for separate credit agreements. \u00a0Just as seamlessly as they handle payments, APIs are also powering embedded lending \u2014 from SME credit lines offered within e-commerce platforms to instant personal loans accessed through consumer apps.\u00a0 Embedded finance is a hallmark of a time-poor, one-click world, one which eases the wheels of commerce and gives consumers quick access to the products and services they need.<\/p>\n
That all makes sense in principle \u2013 so how exactly does it work? \u00a0Clearly, e-commerce platforms are not all expanding their operational remits to encompass financial services.\u00a0 Amazon has no wish to become a bank; your local car dealer lacks the skills to become a lender; travel firms don\u2019t want to become payment plan providers. How then can they offer these services without shouldering the massive technical and regulatory burdens of the financial sector?<\/p>\n
The answer is through Application Programming Interfaces, or APIs, managed by an external banking-as-a-service partner.\u00a0 An API is the connective tissue allowing e-commerce platforms to integrate basic banking services into their user experience.<\/p>\n
APIs are best imagined as \u2018software intermediaries\u2019 enabling secure data exchanges between financial institutions and customer-facing enterprises, such as retailers or investment platforms. \u00a0Typically, a five-step API process involves:<\/p>\n
- \n
- a request<\/strong> (a customer making a query via an online retailer)<\/li>\n
- an authentication<\/strong> (the API confirming the legitimacy of the request to access data)<\/li>\n
- data retrieval<\/strong> (downloading the necessary data from the bank or lender)<\/li>\n
- formatting<\/strong> (translating that data into a standardized form interpretable by third-party apps)<\/li>\n
- response<\/strong> (delivering the formatted data to the customer).<\/li>\n<\/ul>\n
Conveniently, shoppers only need link their bank account to an external platform once, and then all subsequent purchases are fast and effortless.<\/p>\n
![\"\"](\"https:\/\/media.alj.com\/app\/uploads\/2025\/10\/API-technology-in-finance_001-scaled.jpg\")
<\/p>\nSuch a system offers multiple benefits. \u00a0It allows different sectors to interact seamlessly, all while maintaining privacy protocols. \u00a0The data accessed is live, reflecting second-by-second fluctuations in bank accounts or stock markets. \u00a0It is also secure, demanding multi-factor authentications such as passwords, biometric data and one-time codes. \u00a0Encryption ensures communications remain confidential, while regulatory compliance offers reputational credibility. \u00a0APIs in Europe, for example, abide by Payment Card Industry Data Security Standard (PCI DSS) for payments and General Data Protection Regulation (GDPR)\u00a0for data protection.<\/p>\n
APIs, in other words, allow nonfinancial companies to communicate harmoniously with financial platforms. \u00a0The benefits, according to global business advisory PWC, do not end there.[4]<\/a> \u00a0Embedded finance can also:<\/p>\n
- \n
- Helps companies find and retain customers by maximizing convenience and reducing friction.<\/li>\n
- Creates new revenue streams with existing users by expanding the range of transactions and finance schemes on offer.<\/li>\n
- Equips companies with valuable data on customer preferences and behaviors, enabling the creation of tailored products and services.<\/li>\n
- Encourages customer loyalty by providing a one-stop-shop for all their transactional needs, without the risk of attention pivoting to third-party providers.<\/li>\n
- Enable businesses to move beyond transactions to build personalized financial journeys, tailoring credit, savings, or insurance offers in real-time based on customer behavior.<\/li>\n<\/ul>\n
Thanks to embedded finance, lenders, technology platforms and startups are busy collaborating on a new wave of financial technology (fintech<\/a>) partnerships heralding hassle-free, fully-integrated financial services. \u00a0What will this new API-driven ecosystem look like?<\/p>\n
How could partnerships and AI boost embedded finance?<\/h2>\n
Embedded finance is at the vanguard of fintech innovation and will transform the future delivery of financial services, according to the World Economic Forum[5]<\/a>. \u00a0Banks will interact with fewer customers directly, but will be far from obsolete. \u00a0APIs may govern payments, loans and insurances, but do not themselves retain or have access to funds \u2013 banks remain the repositories of wealth and investment.<\/p>\n
Banks offer size, a \u2018too big to fail\u2019 structure, scalability and longstanding reputational integrity. \u00a0Fintech operators, on the other hand, are quicker to embrace innovation, can react more nimbly to shifting trends and are not so wedded to outdated technology. \u00a0Partnerships, therefore, are emerging as the prime solution for our bold new age of embedded finance.<\/p>\n
Quantix, the fintech arm of UAE-based technology group Astra Tech, revealed in December 2024 that it had secured US$ 500 million in financing from American multinational bank Citigroup[6]<\/a>. \u00a0The investment enables Quantix to expand its CashNow consumer lending platform to overlooked communities such as SMEs and gig workers. \u00a0Citigroup, for its part, gets to penetrate the burgeoning embedded finance sector and diversify its portfolio. \u00a0As a collaboration, it signifies the UAE\u2019s largest fintech deal to date.[7]<\/a><\/p>\n
Similarly, international banking giant HSBC has partnered with San Francisco-based B2B fintech platform Tradeshift on a new venture named SemFi[8]<\/a>. \u00a0SemFi helps e-commerce sellers, often sole traders or SMEs, receive payments faster by having invoices paid early by HSBC. \u00a0It aims to provide new lines of credit to a wider range of customers by analyzing transaction histories and directly accessing sellers\u2019 accounting tools.<\/p>\n
Likewise, recent partnerships between US bank JPMorgan Chase and finance fintech Gusto, and UK bank NatWest and embedded finance innovator Vodeno, enable customers to embed payroll services within their systems and add payment options to products.[9]<\/a><\/p>\n
Such collaborations, along with others in the pipeline, could help empower those segments of society traditionally excluded<\/a> from banking services, all while improving financial literacy and democratizing access to investment.<\/p>\n
In emerging markets, embedded finance offers SMEs access to working capital, transforming supply chain finance into a real-time, digital service embedded directly into procurement and trade platforms.<\/p>\n
Breakthroughs in AI<\/a> will only hasten this journey. \u00a0AI will make embedded finance faster by allowing transactions in real-time. \u00a0Tailoring its interface around the individual, AI will also make buying products, paying invoices or handling investments far more intuitive. \u00a0With its unprecedented processing power and advanced algorithms, AI will also be able to pinpoint any illicit activity, making embedded finance the safest choice for future transactions. \u00a0In another win for financial inclusivity, AI-powered credit scoring could make loans available to people lacking traditional credit histories, potentially narrowing the finance gap between \u2018haves\u2019 and \u2018have nots\u2019.<\/p>\n
Indeed, with some of the more exciting innovations happening within the MENA region, embedded finance could eventually help emerging markets compete on a more level playing field with their mature market rivals.<\/p>\n
How advanced is the MENA region in embedded finance?<\/h2>\n
Although currently the size of the market in the MENA region is small, it boasts a promising embedded finance ecosystem with the potential to rapidly scale-up. In fact, with the Middle East serving as a hotbed of tech innovation, embedded finance is projected to grow twice as quickly in MENA this decade as in the rest of the world.[10]<\/a><\/p>\n
![\"\"](\"https:\/\/media.alj.com\/app\/uploads\/2025\/10\/Embedded-Finance-Market-Share-By-Region-2024-_001-scaled.jpg\")
<\/p>\nThis is partly driven by ambitious investments from telecommunications companies, retailers and tech startups, but also by MENA\u2019s embrace of an \u2018open banking\u2019 culture. \u00a0Open banking, in which financial institutions allow third-party developers access to their data, is a prerequisite for embedded finance. \u00a0At state level it has received major support via legislation such as Bahrain\u2019s Open Banking Framework<\/a>, the UAE\u2019s Financial Infrastructure Transformation Program<\/a> and Saudi Arabia\u2019s Open Banking Policy<\/a>.<\/p>\n
Businesses in MENA have taken note and invested accordingly. \u00a0Notable ventures include buy-now-pay-later (BNPL) startups, integrated digital banking platforms, and a raft of new insurance technologies, where embedded models are reshaping access, from travel protection at the point of booking, to micro-insurance for health, mobility, and devices embedded into everyday purchases. \u00a0One high profile deal, between ride-hailing app Uber and insurance giant Axa, offers bespoke insurance plans for Saudi Arabia\u2019s taxi and delivery sector, plus medical and legal coverage for all customers using the Uber app.[11]<\/a> \u00a0More recently, the Saudi Telecom Company (STC) joined forces with BNPL platform Tamara to offer payment schedules for customers of STC’s electronics and accessories, massively broadening its potential customer base[12]<\/a>.<\/p>\n
Embedded finance is gaining particular momentum in the UAE. \u00a0The sector is expecting a compound annual growth rate (CAGR) of 28.6% between now and 2029 thanks to a sharp rise in e-commerce and robust investment in digital infrastructure.[13]<\/a> \u00a0Dubai-based Careem Pay is continually expanding its international remittance services, this year adding an extra 18 European countries to its approved transfer corridors[14]<\/a>. \u00a0Online marketplace Noon, meanwhile, also headquartered in Dubai, has launched digital wallet Noon Pay<\/a>. \u00a0Noon allows users to add money to their balances using a Visa or Mastercard via a secure app on their iOS or Android cellphones. \u00a0With one eye on the future, the UAE’s Young Investor Program is equipping the entrepreneurs of tomorrow with all the financial and digital skills needed to become savvy operators in embedded finance[15]<\/a>. \u00a0In highlighting the spirit of \u2018coopetition\u2019 (a fusion of competition and cooperation) in the UAE\u2019s finance sector, the World Economic Forum cites the country as a potential global hub for fintech in the coming decades.[16]<\/a><\/p>\n
The financial services sector businesses within the Abdul Latif Jameel network are similarly immersed in several embedded finance initiatives within the region.<\/p>\n
- \n
- In 2023, Abdul Latif Jameel Finance<\/a> in Saudi Arabia launched its Jameel Business<\/a> app, the first digital platform dedicated to financing SMEs in the country, offering up to SAR 15m in credit.<\/li>\n
- Abdul Latif Jameel Finance also unveiled its personal loan app in 2022, Cash Jameel<\/a>. One of the first products of its kind in Saudi Arabia, Cash Jameel allows individuals to apply for personal loans between SAR 10,000 and SAR 20,000 each. \u00a0The user-friendly app processes bids within minutes and agreements can be signed digitally, avoiding time-consuming paperwork.<\/li>\n
- Similarly, in Turkey, ALJ Finans<\/a> has operated the award-winning<\/a> ALJPay credit application app since 2017.\u00a0 The app allows motorists to search for new vehicles by specifying their preferred manufacturers, including embedded financial services for end customers, dealerships and repayment schedules, with e-contracts emailed out in less than five minutes.<\/li>\n
- In the UAE, meanwhile, JIMCO\u2019s technology fund<\/a> is an investor in BNPL provider Tabby<\/a>, which has been integrated with major global brands including Ikea and Nike. Tabby allows customers to split debt into multiple interest-free payments and earn cashback at chosen retailers.<\/li>\n<\/ul>\n
- Abdul Latif Jameel Finance also unveiled its personal loan app in 2022, Cash Jameel<\/a>. One of the first products of its kind in Saudi Arabia, Cash Jameel allows individuals to apply for personal loans between SAR 10,000 and SAR 20,000 each. \u00a0The user-friendly app processes bids within minutes and agreements can be signed digitally, avoiding time-consuming paperwork.<\/li>\n
- In 2023, Abdul Latif Jameel Finance<\/a> in Saudi Arabia launched its Jameel Business<\/a> app, the first digital platform dedicated to financing SMEs in the country, offering up to SAR 15m in credit.<\/li>\n
- an authentication<\/strong> (the API confirming the legitimacy of the request to access data)<\/li>\n