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Embedded finance

Unlocking growth: How embedded finance is reshaping the customer experience

- 5 minute read

As technology evolves, so does the way we interact with financial services. The rise of embedded finance is now offering the opportunity for seamless transactions within everyday activities, and this shift is improving convenience and the overall experience for consumers. All this, while allowing businesses to generate new revenue streams and tap into new markets.  


What’s embedded finance, how has it grown, and what is the impact on traditional banking?  

Traditionally, banking and financial services were confined to specific institutions and platforms. Embedded finance, which is essentially the integration of financial services into non-financial platforms, is breaking these barriers. In Europe, the current state of play sees a rapidly expanding landscape with fintech companies and established banking players collaborating to offer a diverse range of financial services within everyday apps, blurring the lines between banking and non-banking entities. Predictions for 2024 forecast exponential growth for the embedded finance market as 74% of European businesses plan to launch integrated financial solutions. A growing number of companies are embracing embedded finance to meet consumer demand for convenience and accessibility, while looking for ways to capitalise on new opportunities at a time of economic uncertainty.

What’s more, embedding financial capabilities into existing customer touchpoints is becoming a catalyst for elevating the customer experience. For instance, e-commerce platforms now offer instant loans or instalment options at checkout, simplifying the buying process and providing customers with a more rounded experience.  


Embedded finance is enhancing convenience and efficiency across industries 

Businesses of all types and sizes are leveraging embedded finance to revolutionise their operations and provide enhanced value to their customers. For instance, retailers are integrating flexible payment methods, such as buy-now-pay-later, into their platforms, due to a growing consumer demand. By instantly offering credit facilities at the point of sale, retailers are creating a holistic purchasing experience for shoppers, resulting in higher sales conversion rates. Insurance companies are using virtual card solutions to speed up customer payouts. In the travel industry, airlines and booking platforms are embedding travel insurance and flexible payment options directly into their services, offering travellers peace of mind and financial flexibility. Even transportation is adopting embedded finance, enabling users to pay for rides and access additional financial services directly through mobility apps.

Across these industries, the integration of financial services into their core offerings shows the versatility of embedded finance, and how it impacts consumer behaviour, expectations, and experience.    


How embedded finance is transforming the customer experience


Redefined convenience in transactions  

In the era of super-apps, embedded finance streamlines transactions, removing the need to switch between multiple apps or platforms to conduct financial activities. This simplifies the customer journey, providing a hassle-free experience, and offers consumers unparalleled convenience. 


Personalisation and customer-centricity

One of the key benefits of embedded finance lies in its ability to leverage customer data intelligently. By harnessing data analytics, businesses can gain invaluable insights into customer behaviours, preferences, and spending patterns. This wealth of information empowers companies to offer hyper-personalised financial solutions and tailor-made recommendations, ultimately improving customer satisfaction. Whether it's suggesting suitable financial products or customising payment plans, embedded finance optimises offerings to meet individual needs.


Enhanced accessibility and financial inclusion

Embedded finance plays a pivotal role in addressing financial inclusion by reaching underbanked populations. By integrating financial services into everyday apps, like mobile wallets or social media platforms, it unlocks the power of financial services for individuals who may not have access to traditional banking. This inclusivity fosters economic participation and empowerment among historically underserved customers.  


The benefits of embedded finance for businesses 

Embedded finance not only elevates the customer experience, but also offers several benefits to businesses making it a strategic choice for adoption.


Boosted customer loyalty  

With the integration of financial services, businesses can turn their existing products or services into a one-stop solution for customers. This convenience strongly encourages customer loyalty, as well as attracts new users seeking a seamless experience. 


Additional revenue streams

By offering financial services alongside their primary products or services, companies can generate new revenue streams and diversify their income sources, which is becoming more important than ever due to the volatility of the economic market. 


Greater competitive advantage

Businesses adopting embedded finance show a true commitment to responding to the ever-evolving customer needs and staying at the forefront of innovation. These companies are going beyond their traditional offering with value-added services that provide a complete experience for their users, while giving businesses a competitive edge in a very dynamic market.   


What to look for when choosing an embedded finance partner? 

Choosing an embedded finance provider involves strategic steps that are crucial for a seamless integration into your business model. First and foremost, identify providers that align with your specific needs, ensuring they offer essential functionalities like access to card schemes or digital wallet integrations.

Additionally, seeking out testimonials from customers with a similar company profile can give you confidence in a provider's capability to support your business effectively. Finally, verify the provider's expertise in payments knowledge, supported by relevant licenses and a robust tech infrastructure equipped with easy-to-use and customisable APIs.

Ultimately, the true mark of an ideal partner lies in their flexibility. Prioritise providers willing to adapt their offerings, accommodating your innovative fintech concepts and evolving business requirements. This adaptability ensures long-term business success, enabling growth within the dynamic landscape of embedded finance.  


As we witness the consistent growth, evolution, and adoption of embedded finance, we can certainly say that it’s not merely a trend - it's a transformative force reshaping how customers interact with financial services.  The journey of embedded finance has just begun. Embracing this revolution isn't just about staying ahead - it's about crafting a future where financial services merge effortlessly with everyday experiences. By prioritising the convenience, personalisation, and accessibility that embedded finance offers, businesses will undoubtedly lead the way in delivering enhanced customer satisfaction, engagement, and long-term loyalty. 


We can help you deliver your ideal embedded finance solution  

We’re here to help you integrate payments services, from flexible payment options to virtual cards and digital wallets, that elevate the user experience and unlock your product’s full potential.

Learn more about how we enable embedded finance

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