Smart businesses look for opportunity – and more than ever, modern technology creates openings of which intelligent and savvy business leaders can take advantage.
One of these technological advancements is embedded finance – the integration of financial services into non-financial offerings. In simpler words, it’s a way to meet a customer at the crossroads of their financial needs, such as payments, expense management, rewards, or any other financial service built for daily services and interactions.
However, embedded finance is far more than just a technological advancement. It’s a way to enhance the overall customer experience to drive loyalty and growth – and it’s a huge market opportunity. Projects in the financial sector suggest that by 2032, the market share for embedded finance could reach a staggering $622.9 billion. As a business, it’s important to recognize this opportunity.
The Broader Advantages of Embedded Finance
The value of embedded finance goes beyond direct revenue generation. Instead, embedded finance has become a game-changer for users and a way for businesses to kickstart long term relationships with customers.
The numbers back it up, too. The findings of this study from the IBS indicates 22% of respondents claim they are more likely to shop with brands offering embedded financial solutions. This statistic underscores the growing influence of embedded finance, as customers increasingly gravitate toward businesses that prioritize the convenience and benefits it brings.
But believe it or not, businesses aren’t tapping this full potential just yet, but that trend is shifting. According to Juniper Research, 65% of companies that haven’t made use of embedded finance yet are now looking to do so.
So where does this fit in for your strategy? Let’s dig in further to the specific advantages of embedded finance and why it’s a concept for business leaders and decision-makers worth considering.
Enhanced Brand Loyalty
The integration of financial services within various apps and platforms significantly enhances brand loyalty among customers. This synergy between finance and other services fosters trust and loyalty. Customers appreciate the convenience and reliability offered by these embedded finance solutions, creating stronger connections with the brands providing them.
Furthermore, younger generations appreciate embedded finance. According to the Financial Times, 78% of Gen Z consumers say they are likely to purchase products and services through social media platforms in the next 12 months. By utilizing embedded finance technology, brands can provide a seamless and easy way for buyers to make purchases – taking full advantage of this digital trend with customers who are more likely to return in the future.
Brands offering embedded finance gain a competitive edge by reinforcing brand loyalty. This is indicative of the growing consumer preference for comprehensive and hassle-free experiences.
Improved Customer Retention Through Convenience
Embedded finances simplifies financial transactions and provides a level of convenience that modern consumers appreciate. This convenience contributes to higher customer retention rates.
Consider a scenario where a user pays for their Uber ride and subsequently buys their coffee at Starbucks, all through their mobile device. This seamless experience not only retains customers through loyalty but encourages them to return because it’s just simply so hassle free. The easiness of using embedded financial tools – like mobile wallets or integrated payment solutions – simplifies the payment process, resulting in improved customer satisfaction.
As referenced in the Fintech Times, modern consumers value convenience and efficiency, and businesses that offer these attributes through embedded finance are better positioned to retain customers in a fiercely competitive landscape.
Streamline Operations and Reduce Costs
The primary focus of embedded finance is its revenue potential, of course. But it’s worth noting its remarkable ability to streamline operations and reduce costs. Businesses can simultaneously improve their operational efficiency and reduce expenditure by eliminating intermediaries and providing a more convenient solution for customers.
The adoption of embedded finance is a way for a business to have a more direct relationship with their customers. This streamlined process not only cuts costs but also enhances the overall user experience. Embedded finance has the potential to replace traditional processes by reducing overheads and creating a leaner operational structure. That translates into cost savings, further enhancing a business’s financial health.
Data-Driven Decision-Making & Customer Management
As a business operator, data is a valuable tool for navigating everyday decisions. With embedded finance, one hidden tool is the ability to acquire customers’ data, helping you personalize services and enhance your customer management strategies.
The insights gained from embedded finance interactions helps businesses better understand their customers and who they are serving, their preferences, and their overall behavior. This data-driven approach helps companies tailor their offerings, marketing campaigns, and customer support for improved customer satisfaction.
And, of course, a satisfied customer is all the more likely to become a loyal customer.
Future Growth: Drive Long-term Business Success with Embedded Finance
Embedded finance is far more than a way to generate revenue. More and more, it’s become a pillar for long-term business strategy – a catalyst for brand loyalty, customer retention, streamlined operations, and data-driven decision-making. The comprehensive advantages help position businesses for long term success in competitive markets.
After all, long term success requires long term thinking.
Think about yourself as a consumer. There are certain brands and products that you feel particularly attached to, each driven by unique experiences and offerings. What do these businesses do differently? How do they treat you? What do you, as a customer, expect from them? Embedded finance offers a way to think about these expectations. Businesses who position themselves as more than a provider of products or services are much more likely to breed loyalty.
Intelligent businesses think beyond profit because they understand the holistic realities of how growth works. Embedded finance offers potential to drive brand loyalty and reduce costs while gathering customer data, helping make a significant impact on business performance. Prepare for future growth by leveraging the broad advantages of embedded finance.
You won’t find future growth in a spreadsheet of sales figures. Understand the modern dynamic marketplace. Customer preferences continue to change and evolve.
Learn how Juice’s advanced FinTech can help your business stay ahead in competitive industries and foster tomorrow’s growth today.