01.10.2025 02:59 PM

“Banking 2035”: Embedded finance makes financial services invisible

Thought experiment “Banking 2035”: When financial services become invisible through embedded finance

Imagine this: You buy a car in 2035. While you are still test driving it, AI is already analyzing your credit rating, creating a customized financing offer, and automatically opening a temporary account. Once the contract is signed, a smart contract processes the payment—and deletes the account again. As a customer, you never consciously interacted with a bank.

This – deliberately somewhat exaggerated – vision of “invisible banking” shows where the journey could lead. Financial services are seamlessly integrated into mobility, housing, and consumer platforms. Wallet-based systems manage the entire digital identity and adapt to individual needs in real time. Traditional banking is undergoing a transformation. However, while standard transactions are becoming invisible, more complex services such as asset management above a certain size remain visible to customers. Although digitalization and automation dominate these processes as well, conscious exchange between the bank and the customer still remains.

Technology drivers: The new (old) foundation of banks

Three technologies will drive this transformation, each with countless applications for financial service providers: Artificial intelligence, for example, is revolutionizing lending through forward-looking algorithms that go far beyond historical data analysis. Digital assets enable, among other things, the tokenization and fractionalization of assets—suddenly, anyone can invest in fractions of real estate or works of art. Smart contracts fully automate financial transactions and, in this use case, render the concept of “value” obsolete.

Edge computing and quantum cryptography act as critical enablers: they provide the necessary speed and security in a world where financial transactions must be processed in milliseconds.

Between efficiency boost and commoditization: Does embedded finance work?

This development offers enormous opportunities: banking transactions are becoming dramatically more efficient, and economies of scale are emerging automatically. AI-based customer analysis enables banks to provide their customers with more personalized advice than ever before—provided they manage to successfully adapt general AI models to their specific use cases.

But there is a flip side to the coin: in areas that are becoming invisible banking, only price and technical availability count. Here, banks become interchangeable and traditional differentiators disappear. In visible segments, such as large-volume asset management, other factors such as quality of advice and trust remain crucial. The risk of commoditization is real, but not universal.

The key success factor behind this trend: trust

As an early-stage investor and innovation unit of Commerzbank, we at neosfer see every day how fintechs and established players are battling for the future of banking. The key lies not only in technology, but also in user trust. Changes can only be scaled if customers accept and understand them.

Banks that want to successfully master this transformation must act now: they should actively accompany their customers through the change, invest in AI personalization as a new differentiator, and at the same time minimize the technical implementation risks. The future belongs to those who master both technology and trust.

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