opportunities that lie within. On the other hand, Sophie has spent the last 10 years designing the go-to-market strategy and execution of BAAS providers and more recently, embedded finance propositions across the continent of Europe.
As Jelena McWilliams, the chairman of the FDIC puts it, “Scarlett's and Sophie's combined backgrounds give them a unique perspective into the future of this space. Their strategic thinking, operational excellence and deep understanding of key players and technologies afford them background knowledge that few people have mastered.”
With deep expertise in the space, they share a vision and excitement about where and how embedded finance will impact the lives of everyday consumers and the role that Big Tech companies and beyond will have as they become a monumental part of the fintech ecosystem.
After many conversations and many sleepless nights contemplating the vast opportunities, they have agreed that now is the time to tell this story.
WHY YOU?
Whether you're a banker, work at a fintech company, are a business owner, or just a curious consumer excited about the space, we have a lot to share about this new way of connecting consumers with financial services and most importantly, share how your day-to-day life will be impacted for the better.
Banks need to learn to adapt to remain relevant in the new hierarchy. Fintech companies need to shape the financial products that the consumer-facing businesses will ultimately deliver. Once financial services can be delivered through a company or product consumers use every day, there is a tremendous opportunity to reach a greater number of people than ever before, and there is already evidence from early success stories that more progress is possible. We are just at the beginning.
WHAT YOU NEED TO KNOW
The book will provide you everything you need to know about the evolving world of embedded finance from inception to predictions for the future. We will cover:
The Early Days: Proving the historical context and lessons learned from early players and how their efforts shaped the future.
The Present: Identifying the global enablers today, including detailed case studies about their approach with key takeaways you can start enacting immediately as well as highlighting the role that traditional financial service providers continue to play.
The Future: Predicting how the momentum of embedded finance will pick up, what the world of the future will look like, and what the impact on the consumer could be both for individuals as well as society as a whole.
Failing to prepare for, and at minimum be aware of, this monumental shift in how financial products are delivered to customers could lead to serious challenges down the road. The challenges have the ability to impact your talent, revenue, technology you use, and more. This is not the first push toward a new technological world order and we are not far from the days of Kodak failing to seize the digital picture boulevard or Best Buy failing to capture the future of cinematic entertainment. Not everyone should partake in such a journey but, regardless of your ambitions, it is important to understand what is happening at the macroeconomic level as the impact will reverberate into all parts of business. Taking your strategic career hat off and acting as a consumer like everyone else, as a consumer, this book will prepare you for the seismic changes you are about to experience in your day-to-day life.
After all, with a projected $3.6 trillion global market capitalization by 2030, why wouldn't you want to know more?2 Let the journey begin.
NOTES
1 1. https://www.lendingtree.com/tree-news/holiday-shopping-behavior/ Accessed January 25, 2022.
2 2. https://www.forbes.com/sites/matthewharris/2019/11/22/fintech-the-fourth-platformpart-two/?sh=45ed1e6f5be6 Accessed January 29, 2022.
CHAPTER TWO THE ORIGINS OF EMBEDDED FINANCE
How big of an opportunity is embedded finance? We will answer this question throughout the book, but before we talk about where we are now and where we are going in the future, we must start with the past.
HOW WE GOT HERE: BANKING IN REVIEW
Let's begin our journey by going back to the beginning of financial technology—fintech. Some industry experts say fintech began in the 1950s when the first credit cards were mailed to 60,000 consumers in Fresno, California. Others point to the widespread adoption of ATMs in the 1970s. Still others look much farther back, all the way to the telegraph system used to transmit financial orders in the nineteenth century.
But the very earliest instance of “financial technology” may be even older than that. Cuneiform is a system of writing developed more than 5,000 years ago in Mesopotamia, what is now Iraq and Kuwait. It was here, and in a few other areas such as Egypt, India, and China, that agriculture developed to a point where dependable harvests could provide food for urban developments, which served as centers of commerce and other forms of specialized labor. On clay tablets unearthed in the Middle East, archeologists have discovered a system of accounting in cuneiform, including loans and credits to farmers for the purchase of seeds, land, and equipment. It may be said without exaggeration that financial services accompanied the very earliest flowering of civilization.
Note that this is well before coins or cash or fiat money. This was an age of barter, of goods themselves being the means of transaction, rather than abstract symbols of value. The first coins seem to have appeared 3,000 years ago in China and a few hundred years later in Turkey. Both were advanced, literate societies with established social norms and laws protecting persons and property. But the act of borrowing and lending is more fundamental to human activity than the idea of “money,” as any child on the playground can tell you.
Lending appears to have been a family matter in ancient Mesopotamia, with wealthy families lending from their own reserves. In ancient Greece and Rome, banking became more formal and less personal, with lending and money-changing often tied to the economic activities of powerful entities such as temples or government offices.
The institutions we recognize today as banks originated in Italy during the Middle Ages. Banking groups would finance voyages, gambling that ships would return to port with more valuable cargo than they shipped out. In Renaissance Italy, banking became available to more of the population, what we would today call retail or consumer banking. The word bank comes from the Latin bancus, meaning bench or table. Bankers (banchieri) set up tables outdoors, at the entrance to markets, to help customers solve liquidity problems. They changed currency, operated as pawnbrokers, and made loans to people visiting the market. Wall Street brokers began much the same way, trading securities at tables along the tree-lined streets of lower Manhattan, when commerce was still an out-of-doors activity.
The consumer banking most of us are familiar with arrived in Europe and North America in the nineteenth century, along with industrialization and the emergence of the middle class. And of course, the twentieth century saw the trappings of traditional financial life become standardized: the checkbook, the bills arriving like clockwork every month,
