Financial Services

Can banks create a true ecosystem with embedded finance?

October 03, 2023


Can banks create a true ecosystem with embedded finance?

October 03, 2023

Sardar Karim

Manager at Economist Impact

Sardar is a manager at Economist Impact with more than ten years of professional experience in policy analysis, economics and management consultancy. He has worked in the Middle East, South Asia and Africa with various national and regional government and development agencies, such as the UN, USAID and FCDO. His main areas of expertise include sustainable economic development, labour productivity, social protection, education, food security and poverty alleviation. He has extensive experience in designing and conducting large-scale research projects and surveys, impact assessments, project evaluations and programme management. 

Sardar holds a master’s degree in Public Administration in International Development from Harvard University and a bachelor's degree in Economics from Lahore University of Management Sciences. He studied abroad at Waseda University in Japan and Malardalen University in Sweden. Sardar is a recipient of the Fulbright Scholarship, Erasmus Mundus Fellowship, Joint Japan World Bank Graduate Scholarship and Pakistan’s Presidential Award for Academic Excellence.

As payments, technology and e-commerce disrupters cut banks out of the equation with embedded finance solutions, banks must harness emerging technologies to create their own digital ecosystems and remain at the centre of the banking universe.

  • New technologies will have the biggest impact on banks in the next five years—more than changing customer demand and evolving regulation. Generative artificial intelligence (AI) in particular is expected to impact banking, according to 75% of respondents to a survey conducted by Economist Impact. More than 70% of survey respondents see unlocking value from AI as a key differentiator between winners and losers.
  • Collaboration with fintechs or other technology providers is key to access expertise in emerging technologies as openbanking initiatives multiply across the world.
  • Banks see their business model evolving in the next 12-24 months, offering bankingas-a-service to brands and fintechs, and enabling embedded finance within their own products and services—79% of survey respondents agree that banking will become “embedded” in consumers’ lives and businesses’ value chains.
  • Nearly two-in-five banks (38%) foresee acting as a true digital ecosystem offering own and third-party banking and non-banking products and services.
  • Improving personalised and embedded customer experiences remains a top strategic priority. Three-quarters of survey respondents agree that banks will seek to differentiate on customer experience rather than products in the next five years.
  • Customer centricity is driving banks to offer more embedded environment, social and governance (ESG) propositions to their customers (73%), as well as providing capital to environmentally friendly projects (74%).
  • With the focus on lowering their carbon footprint, as well as the increasing use of data-intensive AI, banks are inevitably moving to the public cloud—51% of respondents agree that banks will no longer own any private data centres in the next five years after moving to the public cloud.


Economist Impact conducted a study, commissioned by Temenos, to understand emerging trends in the banking industry. This report presents insights from a global survey of 300 executives in retail, commercial and private banking spanning Europe (25%), North America (23%), Asia Pacific (18%), Middle East and Africa (17%), and Latin America (17%). Respondents perform various job functions, such as IT, customer service, finance, marketing and sales, strategy and business development, and general management, among others. Half of the respondents were C-suite executives. This is the seventh year that Economist Impact has conducted this survey. The research also included interviews with industry practitioners to gain further insights.

Which trends do you believe will have the biggest impact on banks in the next five years?

Source: Economist Impact survey.

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