Sanjeev Dahiwadkar, Founder and CEO, Moringa Techsolv

Sanjeev Dahiwadkar is a serial entrepreneur in the technology space who has built several companies in the last two decades with minimal external funding. Sanjeev completed his master in Computer Science and started his entrepreneurial journey in 1999 when he co-founded MSTD, a software development firm focused on default service processes in the US. Under his stewardship, IndiSoft- a company he cofounded in 2005 in the US and was at the helm till 2021- registered a 1500% annual growth in its early years. Currently, he is heading three companies- ITShastra, Cognota Healthcare, and Moringa Techsolv as Founder & CEO.


Embedded finance is the most emerging theme in the financial services world. This enables a company or an online retailer to incorporate banking services directly on their websites or mobile apps. Such incorporation allows users to undertake a range of services on the company’s website without being redirected to third-party websites, which is the case in most instances. Embedded finance, therefore, not only provides superior customer experience; it also provides data for drawing valuable insights on consumer behaviour. Given the growth of ecommerce sector and under penetration of financial services in India, this new segment holds a lot of promise in India.

High potential in India:

Globally, embedded finance is likely to have an addressable market size of $7 trillion by 2030. Such huge opportunity stems from the rising role of fintechs in the financial services world coupled with the swift moves by global companies to tap this route. Walmart’s announcement to build a financial service offering with Ribbit and Ikea’s move to purchase stake in its banking partner indicate the promptness of global majors to integrate financial offerings on their apps or websites.

In this perspective, the opportunity is also huge for a developing economy like India. As a nation, the country is one of the fastest growing economies in terms of digital adoption in recent time. The COVID pandemic has only accelerated this pace. However, penetration of financial services remains low. According to a State Bank of India research report, India’s insurance penetration rate remains at 4.2 per cent with a total value of financial assets is pegged at Rs 263 trillion. This displays that access to financial services has been severely restricted. But this scenario is changing fast. With around 76 crore people using internet, ecommerce is one of the fastest growing segments in India with close to 30 crore users. As more users opt to shop digitally, the potential of embedded finance is huge.

Moreover, India has already started to see embedded finance playing out due to a robust digital payment ecosystem. The National Payments Corporation of India (NPCI)-promoted Unified Payment Interface (UPI) is facilitating the growth of embedded finance. Out of the total value of transactions, around 20 per cent are peer to merchant, which means users are taking the UPI route for their purchases. With sophisticated platforms like UPI being available, it will be relatively easier to come up with solutions that can be integrated with non-finance companies’ apps or websites.

Fintechs, bankingtech startups can cash in:

The integration of financial services into non-financial websites, mobile applications, and business processes create ample opportunities for banks, fintechs and bankingtech startups. To meet the rising demand for embedded finance, financial institutions are increasingly offering Banking-as-a-Service (BaaS) that bundle offerings, often as white-labeled or cobranded services, that nonbanks can use to serve their customers.  Many fintechs have emerged offering intermediate BaaS relationships to these non-finance companies. As fintechs are agile entities in terms of adopting cutting edge technological applications, these entities can work as an intermediary between banks and merchants. Similarly, bankingtech companies can come up with innovative technological applications in the form of APIs which can be easily integrated with non-finance companies’ websites for seamless purchase experience of customers. Moreover, as financial transactions happen on merchant websites, robust cybersecurity features will be critical for ensuring safety of customers’ data.

Meanwhile, traditional banking ecosystem will also benefit from increasing penetration of embedded finance. Through these applications, banks will be able to create an additional revenue source. Moreover, these transactions will provide rich data sets on consumer behaviour, spending habits and credit worthiness of a lot of customers. Drawing insights from these data sets, banks can target a lot many customers with credit and other products.

India has already witnessed consumers opting for EMI schemes for purchases. Also,  BNPL (Buy-Now-Pay-Later) facilities are slowly spreading its wings. Interestingly, these facilities are making entry beyond physical products. Therefore, availing a loan from merchant website or buying an insurance product from a non-finance company’s app seem to be a reality in the near future. If that happens, embedded finance has the scope of driving financial inclusion. Many segments of people such as blue collar and gig workers can come under the fold of formal financial system through embedded finance. Given the vibrant startup ecosystem, technological prowess and well-regulated financial system, India has all the favourable factors to accelerate the pace of financial inclusion in coming days.

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