Embedded lending has slowly changed the face of lending in the UK. In 2025 it has evolved and matured. As embedded lending became more mainstream, it changed the role of accountants in several ways. Accountants are now positioned not only as reporters of financial data but as connectors: bridging platforms, lenders, regulators, and businesses. This role brings with it, new tools, responsibilities, and ethical implications.
This blog explores the state of embedded lending in the UK in 2025, the tools accountants are using (or should master), and the ethical issues they must navigate to keep embedded lending both profitable and responsible.
Embedded Lending in the UK, 2025: What’s Changed
First, let’s explore what is new or gaining momentum in embedded lending in 2025:
- Real‑Time Affordability Checks: Embedded lenders are increasingly leveraging open banking / open finance to pull live transactional data with customer consent such as bank statements, income deposits, bills, and outgoing expenses. These allow lenders to gauge disposable income and thus loan repayment potential far more precisely and dynamically than via traditional means.
- AI and Alternative Data: Lenders now use machine learning to include alternative data insights (e.g. behavioural data, real‑time cash flows or POS sales), rather than just historical credit data, allowing for more inclusion of borrowers with thin file customers or those with irregular incomes.
- Stronger Regulatory Pressure: Regularity pressure has increased with FCA’s upcoming BNPL regulations, more robust consumer protection expectations, stronger GDPR/Open Finance rules, and regulatory interest in bias, model explainability, and audit trails.
These changes mean that accountants must evolve beyond the ledger to become part of underwriting, risk monitoring, compliance‑assurance, and business strategy.
The Accountant’s Role as a Key Intermediary in embedded lending
The accountant’s role is to become a hub or node in a larger embedded lending value chain. The accountant’s roles would include:
Underwriting Advisor and Model Reviewer
While data science teams build risk models, accountants can challenge assumptions. They could verify revenue and expense flows, understand how non‑financial platform data is being used, check for bias, and ensure fair treatment of clients or borrowers.
Compliance and Audit Trail Steward
Accountants can help guarantee that data collected from partners/platforms, lending partners, and customers is properly consented, stored, and processed. Accountants can help ensure logs, versioning, and documentation are updated, so that decisions, especially automated ones can be audited and traced.
Performance and Risk Reporting to Stakeholders
Embedded lending products often have complex revenue, loss provisioning, credit risk cycles that differ from traditional loans. Accountants must do their best to analyse the pros and cons of such funding offers, and help clients navigate these complexities and secure funding that suits them best.
Ethical Gatekeeper
Accountants must raise red flags when speed or revenue pressure is hinging towards lax credit checks, or use of data sources that might be discriminatory. Ensuring fairness, transparency, customer protection and alignment with policy/regulation.
Strategic Partner
For lenders, accountants will play a pivotal role in helping decide whether to build vs partner. The accountant can help lenders decide whether to invest in building infrastructure, the pros, cons and associated risk, or simply partner with an established SaaS company to leverage API integration.
Accountants who engage in these roles well do more than protect; they enable sustainable growth of embedded lending propositions.
Ethical & Regulatory Issues to Watch
In 2025, several ethical and regulatory pressures are especially acute for accountants in an embedded lending ecosystem. Deep understanding is essential.
| Ethical / Regulatory Issue | Why It Matters in Embedded Lending | What Accountants Must Watch / Mitigate |
| Bias and Fairness in Underwriting | Automated underwriting that uses alternative data may inadvertently discriminate or penalise certain applicants (due to data issues). Regulators are scrutinising whether models are explainable and whether denied applicants have redress. | Insist on bias testing; providing explanations for automated decisions and human intervention for borderline cases. |
| Affordability and Consumer Protection | Embedded finance (especially small value loans) risk overextension for customers. In the UK, regulators are pushing for real‑time affordability checks, strict KYC, and regulations that prevents harmful lending. | Accountants can help ensure affordability checks are robust, monitor for early signs of customer stress, ensure that communication and disclosures are clear. |
| Data Privacy, Consent and Behavioural Data Use | Use of granular transaction or behavioural data makes privacy a real issue. Consent must be informed and auditable. Using data beyond what was consented may violate GDPR / Open Finance laws. | Accountants can lay down strict data governance; limit data use; ensure partner platforms comply and maintain clear consent records. |
| Transparency and Explainability | Regulators like the FCA expect that decision logic (especially automated) is explainable to customers on request. Lack of this can lead to legal and reputational risk. | Accountants can maintain model documentation, allow for human review; design decision paths that can be narrated with rationale. |
| Accountability & Partnership Risk | Embedded lending involves often multiple parties: platforms, fintechs, banks, lenders, credit bureaus etc. In case outcomes go wrong, the liability and responsibility chains must be clear. | Ensure contracts clearly allocate responsibilities; ensure vendors/sub‑partners meet compliance, ethical, and technical standards; ensure internal oversight; carry out due diligence on partners. |
Case / Use‑Example in 2025
To ground this in practice, here are a few snapshots of what’s occurring in the UK in 2025:
Pulse and Real‑Time Affordability: Pulse offers various solutions, including real-time data analytics, via Open Banking and Open Accounting. With respect to embedded lending, Pulse’s Unified Lending Interface offers solutions like Pulse LOS and Einstein aiDeal which automate and expedite loan origination, including the loan application process and automated underwriting. Pulse’s LOS reduces loan application times to less than 3 minutes and instant-decisions via Einstein aiDeal for 95%+ deals in less than 60 seconds. Apart from loan origination, Pulse LMS helps automate post-disbursement servicing.
Despite advanced automation, AI and machine learning algorithms, practical deployments aren’t frictionless, but they highlight that the accountant’s connector role is becoming increasingly important within a lending ecosystem that is constantly evolving.
What Accountants Should Focus On Now
For accountants, firms, and finance teams already operating in or considering embedded lending, here are strategic steps to take in 2025.
Deepen Technical Literacy in AI / ML / Data Science
Understanding lending model life cycles, bias mitigation, model validation, drift, and feature engineering. Why building everything isn’t always necessary, and rather focus on asking the right questions of vendors and internal data teams.
Embed Ethical Review in Product Design
From product inception, include internal ethical review: who might be excluded or harmed, what data is used, what transparency exists. Make these questions part of a standard checklist.
Strengthen Contracts with Partners & Platforms
Ensure SLAs, KPIs, data leak and misuse clauses, liability allocation, audit rights. When embedded lending spans multiple parties, a mis‑step at any point can cascade into a significant issue.
Maintain Customer‑Centricity and Fairness as Core KPIs
Track not just revenue and default, but customer experience, complaints, over‑indebtedness. Use feedback loops. Metrics such as “unexpected default causes”, “customer financial distress signals” should be visible.
Conclusion
By 2025, embedded lending in the UK has evolved from novelty to a structural component of many business models. For accountants, this means the shift from back‑office record‑keepers to proactive connectors, people who bind together data, underwriting, compliance, technology, and ethics.
Mastery of new tools, real‑time data feeds, decisioning AI, compliance automation is necessary. However, it is equally important to monitor the process to ensure fairness, explainability, accountability, partnership clarity, and customer protection. This is what will distinguish sustainable embedded lending from brittle, risk‑laden propositions.
Accountants who embrace their connector role will both enable innovation and guard the boundaries of trust. The question is not if, but how well you deploy the tools and live the ethics.
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