As the digital environment expands like a new galaxy, embedded financial services continue to become more important. Integrated directly into businesses’ own websites and smartphone apps, they are potential game changers. When these arrangements work well, consumers are happy and businesses boost their bottom line.
There’s a strong triangular relationship. For the consumer, embedded financial services deliver convenience at a scope and scale barely imagined 20 years ago. For businesses, it helps leverage services that would otherwise be costly or impracticable. Without online payment, for example, many retailers would simply disappear. For the fintech providers of software behind these services, it means leading in technological development, and creating ecosystems that benefit consumers and suppliers alike. This is explored neatly and in some detail by Kiera Taylor, writing on FEI’s* website in May this year.
Businesses benefit from embedded financial services in many ways, such as, more data, and improved customer convenience. It’s an opportunity to offer
- products and services they’d otherwise be unable to deliver
- easy and secure financial transactions
- greater consumer choice
- a one-stop-shop for many services – increasing customer retention and brand loyalty.
Behind the scenes, advantages include reduced transaction times, improved efficiencies, enhanced security, and increased customer engagement. This last can be overlooked – but if your customer is positively engaged then there are more opportunities to offer and sell additional products and services.
At Essiell, this dynamic drives our offering. We focus not only on our tech “edge.” We’re constantly evaluating our new and existing services to ensure they benefit the consumer and create additional revenue streams for our business partners. The two functions work hand in hand.
Our Money 4 Travel foreign currency service is a good example. Within one ecosystem, the consumer can order foreign travel cash via their smartphone or pc, with the choice of click & collect or home delivery. The bank or credit union benefits from greater efficiencies, more business, and the opportunity to sell other services too.
Thus, embedding the right financial services delivers opportunities to increase revenue and satisfy the consumer. In her article*, Taylor quotes McKinsey & Company as estimating “50% of [banking industry] growth coming from embedded finance products in the near future.” Foreign exchange services are good example of how this works (see above) and with the right fintech partner to underpin it, it really can be win-win.
* Embedded Finance Trends for 2023, Kiera Taylor, FEI Daily, 05/2/2023
