IN the not-so-distant past, buying something you couldn’t immediately afford meant saving up or borrowing from someone you knew. Today, thanks to embedded finance, a simple tap on your phone can turn a wish into a purchase, instantly.
This transformation is most visible in the rapid rise of Buy Now, Pay Later (BNPL) options integrated directly into e-commerce platforms in the Philippines.
This seamless integration of financial services into non-financial platforms, what we now refer to as embedded finance, has done more than just improve convenience. It has changed expectations — and the driving force behind this shift isn’t just the technology itself, but the demographic fueling it. Young Filipinos, increasingly digital-first, are growing up in a globalized, app-native world where access to fintech is as common as social media. While cash is still king in many parts of the country, there is a generational shift happening. The younger population, more educated on tech through social media, global trends, and the digital economy, demands more accessible, intuitive, and mobile-first financial solutions.
This is where embedded finance shines. Beyond BNPL, platforms are evolving with AI-powered tools such as AI agents, trained and deployed using cloud infrastructure through partnerships like ours with Microsoft, now acting as onboarding specialists, customer service reps, and even credit assessors. Furthermore, they are accessible directly from users’ preferred platforms — WhatsApp, Messenger, Viber — eliminating the need for multiple apps and storage-heavy downloads. For example, if a customer wants to purchase a product through BNPL, they simply chat with an AI agent on their favorite messaging platform. The agent collects necessary information, asks for a bank statement, and may even use AI-powered document analysis to assess affordability and approve credit, all within minutes. That’s the future of onboarding: fast, smart, and embedded.
This ease of use is no longer a novelty; it is now expected. Younger generations don’t want to visit physical branches or navigate clunky, outdated systems. And frankly, they shouldn’t have to. Fintech companies have proven that fully remote, efficient, and secure systems can work well. Fintechs are on the rise because of the digital-first agility provided to customers.
Traditional banks operate within complex, highly regulated environments and rely on established systems built to ensure stability, security, and compliance. Rather than disrupting this foundation, the financial sector is increasingly embracing collaboration with fintechs as a path forward. By integrating innovative technologies, such as loan origination systems or AI-powered risk assessment tools, into their existing infrastructure, banks can enhance their capabilities without a full-scale overhaul.
This collaborative model is already happening across Southeast Asia. Banks are teaming up with fintech companies to offer faster credit approvals, launch AI-powered financial tools, and embed e-wallet functionalities. These partnerships are essential to maintaining relevance in a market where 79 percent of consumers already use digital wallets.
As we look ahead to 2026, two AI-driven tools are set to define the fintech industry: intelligent document processing (IDP) and AI agents. IDP can handle the tedious task of reviewing bank statements, verifying identity, and assessing financial stability in seconds, something that once took days. Meanwhile, AI agents can offer real-time customer service, guidance, and support — all without human intervention. These tools democratize access and provide scale, boosting financial inclusion.
Southeast Asia has some unique advantages in fintech adoption. Unlike older economies, many financial systems here are newer and more adaptable. Without legacy burdens, we’ve leapfrogged into the digital age, adopting the latest tools right from the start. Cultural factors — such as a communal approach to finance — also make the region ripe for embedded, mobile-first financial tools that can serve individuals, families, and small businesses alike.
For traditional banks, partnering with fintechs can help them enhance innovation and embrace digitization to meet younger generations’ demands. There is enormous potential for collaboration, and in this rapidly digitizing world, the Filipino consumer will continue to demand better, faster, smarter, and more personalized solutions. Embedded finance isn’t just a trend. It’s the new expectation. And the future belongs to those who can meet it.
Abdul Mikael is the country manager for the Philippines at AND Solutions, a leading fintech company promoting financial inclusion across Southeast Asia with innovative technology solutions.