Banks beware, outsiders are cracking the code for finance

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  • Embedded finance investment jumps in 2021, data shows
  • Buy now pay later deals take centre stage
  • Fintech market valuations leapfrog banks

LONDON, Sept 17 (Reuters) – Anyone can be a banker these days, you just need the right code.

Global brands from Mercedes and Amazon (AMZN.O) to IKEA and Walmart (WMT.N) are cutting out the traditional financial middleman and plugging in software from tech startups to offer customers everything from banking and credit to insurance.

For established financial institutions, the warning signs are flashing.

So-called embedded finance – a fancy term for companies integrating software to offer financial services – means Amazon can let customers “buy now pay later” when they check out and Mercedes drivers can get their cars to pay for their fuel.

To be sure, banks are still behind most of the transactions but investors and analysts say the risk for traditional lenders is that they will get pushed further away from the front end of…

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