Embedded Finance and Sustainable Business Models: Conceptualizing the Role of AI-Driven Automation in Reshaping Cross-Sector Value Creation and Programme Delivery

Abstract

This conceptual paper examines how embedded finance and AI-driven automation enable sustainable business models and cross-sector value creation. The authors investigated the capacity of the digital-first fintech services to break the traditional, centralized financial models of banking that introduced the financial products (payments and lending) into the non-financial platforms. This approach is particularly relevant for sustainable business models in sectors such as renewable energy and social enterprises  where access to capital was cumbersome in the past. The theoretical framework offered in the paper has AI playing the role of an accelerator through delivering real-time insights, dynamic risk management, and autonomous workflow to bridge the gap between financial inclusion and environmental, social, and governance (ESG) goals. It was also noted that AI-based systems saved as much as 60 percent of transaction costs and time wasted to deliver a service, which took days and some seconds with an automated data integration process. However, the paper identified a Strategic Frontier where the high-impact applications, such as alternative credit scoring of the unbanked, required a high level of ethical control to remove the threat of algorithmic bias. Lastly, the paper discovered that the paradigm shift from “banking as a destination” to “banking as a feature was a major source of organisational resiliency and an inclusive development.