Secure Embedded Finance: What SDK and Mobile App Developers Must Know

Mobile apps are an integral part of daily life, powering shopping, travel, entertainment, and social interactions. Increasingly, they are also transforming financial services. Embedded finance, which refers to the integration of financial services into non-financial products and services, enables mobile app publishers to offer financial services and products to their customers without having to build their own financial infrastructure. This seamless integration enhances user engagement by allowing financial transactions without users needing to leave the app.

Embedded finance is more than just a convenience; it’s reshaping customer engagement, revenue models, and financial inclusion. For banks, it presents an opportunity to expand their reach through Banking-as-a-Service by providing SDKs to mobile app publishers willing to integrate such services.

While there are many advantages, embedding financial services into non-financial apps introduces security risks. To fully leverage embedded finance, app developers need to prioritize security while also ensuring compliance and delivering an optimal user experience.

This blog helps mobile app developers mitigate security risks and maximize the benefits of embedded financial services. Specifically, you will learn:

• the benefits of embedded finance for customers, banks, fintechs, and mobile app publishers.
• the security risks associated with embedded finance in mobile apps with a focus on embedded payments.
• best practices for securely integrating SDKs into apps offering embedded finance.

The benefits of embedded finance for the mobile app ecosystem

Embedded finance delivers value across the mobile ecosystem, benefiting consumers, banks, and mobile app publishers. Here’s how different stakeholders gain from this integration: 

Enhanced user experience for consumers

For consumers, embedded finance simplifies transactions, reducing friction and making financial actions seamless. Users can access relevant financial services within the context of their transactions. For example, they can choose a "Buy Now, Pay Later" (BNPL) option at checkout or purchase travel insurance while booking airline tickets. 

AI-driven insights further enhance personalization, ensuring financial offerings align with user preferences and behaviors. This level of contextual and frictionless integration improves a customer’s experience and can lead to stronger brand loyalty. 

Expanding financial services beyond traditional channels

Traditional banks are evolving as financial services become increasingly more digital. Embedded finance allows banks to integrate directly into everyday consumer experiences, extending their reach beyond traditional banking channels. Banks can seamlessly integrate their services into e-commerce, ride-sharing, travel, and social platforms. Instead of requiring users to leave an app to complete a transaction, banks can provide services at the point of need, whether it’s a loan, instant payments, or insurance.

New revenue streams for banks

Banks can monetize embedded finance by charging transaction fees on in-app payments, earning interest from in-app loans, or by offering white-label banking solutions for third-party apps.

Strengthening customer engagement & partnerships

By embedding financial services within high-engagement apps, banks remain top-of-mind while delivering personalized solutions that meet individual customer needs. Additionally, rather than competing with fintechs, banks can partner with them to scale their services while leveraging fintech innovation. For example, recently, Klarna partnered with JPMorgan to offer its BNPL technology to JPMorgan Payments network of merchants. 

Seamless financial integrations for mobile app publishers

For mobile app publishers, embedded finance enhances user experience, increases revenue, and boosts customer retention. Apps across industries—e-commerce, ride-sharing, gaming, and social media— can benefit from seamless financial integrations.

Increased customer retention & lifetime value

Users engage more when financial services are seamlessly integrated. Frictionless in-app payments, embedded credit options, and personalized financial services enhance trust and satisfaction, keeping users within the platform longer.

Unlocking new revenue streams

Mobile app publishers can generate revenue through transaction fees from payments, BNPL, and peer-to-peer transfers, affiliate earnings from banking and insurance partners, commissions-based revenue from loans, insurance, and investment products.

Enhancing user experience across industries

Embedded finance improves mobile app user experience across multiple industries:

• E-commerce: One-click payments, BNPL, instant credit
• Ride-hailing & delivery: Integrated wallets, instant payouts, tipping
• Food delivery: Loyalty rewards, meal financing, automatic tipping
• Travel apps: Built-in insurance, foreign exchange, installment bookings
• Social media: In-app purchases, creator tipping, peer-to-peer payments

Strengthening brand loyalty & differentiation

Seamless financial services create a unique competitive advantage, differentiating businesses in crowded markets. Personalized financial offerings further increase engagement and long-term loyalty.

Using SDKs to securely embed finance in mobile apps

Embedding financial services into mobile apps requires SDKs, which provide pre-built tools and APIs for easy integration. Instead of building financial infrastructure from scratch, here's what mobile app developers can leverage SDKs for:

• Streamlining payment processing: Enable digital wallets, credit cards, and BNPL.
• Facilitating secure transactions: Ensure encryption, tokenization, and fraud prevention.
• Accessing financial data: Connect to banking APIs for balance checks, transfers, and lending.
• Ensuring compliance: Implement industry standards such as PSD2, PCI DSS, and GDPR.

Using financial services or banking SDKs accelerates time-to-market, reduces development complexity, and enhances security. However, poorly protected SDKs can expose apps to fraud and cyber threats.

Security risks of embedded finance in mobile apps

One of the most common embedded finance use cases is in-app payments.  Financial transactions are a prime target for attackers, who aim to steal card data, PINs, encryption keys, and Track2 information.

Common attack methods

• Reverse engineering: Threat actors analyze the mobile app code to find vulnerabilities.
• App instrumentation: After finding vulnerabilities, threat actors manipulate the app while running to extract payment data.
• Intercepting sensitive data: Other threat vectors exploited by bad actors are Malware using overlay attacks or Man-in-the-middle attacks to intercept data in transit on the network or while users input it in the app.

Real-world security risks

• Misconfigured SDKs may unintentionally expose payment data.
• Weak mobile app security can allow attackers to manipulate SDK functions and compromise transactions.

How developers can secure embedded finance in mobile apps

Security must be a top priority when integrating financial services into apps. Both payment SDK developers and mobile app developers play a role in protecting transactions from cyber threats.

Security recommendations for payment SDK developers

To prevent data leaks and code manipulation:

• Secure sensitive data: Implement encryption and protect against memory dumps.
• Defend against code tampering: Use runtime protection to block debugging and unauthorized modifications.
• Implement app attestation: Use Play Integrity, App Attest to validate the integrity of your app before your server provides access to sensitive data
• Secure communications: Enforce mutual TLS (mTLS) and datagram encryption to protect data in transit.
• Detect overlay attacks: Identify malware and screen overlays to prevent PIN theft.

Even with a secure SDK, app developers must:

• Apply layered security: Use code obfuscation and runtime protection to prevent reverse engineering and tampering.
• Ensure proper SDK design: Follow PCI DSS and other security standards.

By following these best practices, both SDK developers and app publishers can create a secure embedded finance ecosystem, protecting financial data and maintaining user trust.

Conclusion

As mobile ecosystems evolve, embedded finance is becoming essential for digital businesses. Companies that securely integrate financial services will drive growth, customer loyalty, and new revenue streams.

For banks, offering SDKs enables them to embed financial services into mobile apps, extending their reach and unlocking new revenue opportunities.

For developers, implementing layered security is crucial to protecting financial data.

Need guidance on how to secure embedded finance in your mobile app? Talk to our mobile app security experts today.