The Untapped Potential of Embedded Finance in 2023

In 2022, embedded finance was already cited as one of the top 10 commercial banking trends to watch. Now, as we enter the last quarter of 2023, the impact it is becoming more visible. The vast majority of companies have at least an awareness of what embedded finance is. 65% of companies that haven’t made use of embedded finance yet are now looking to do so.

The reason for this is that in uncertain economic times the focus is always on money. Reducing costs, creating efficiencies, and maximizing opportunities for growth without expanding operational overheads. The zero-cost benefit of embedded finance is therefore very attractive.

In this article we explore what the untapped potential of embedded finance looks like in practice, and how companies can use it to improve customer engagement and employee retention at scale.

Trends Driving the Adoption of Embedded Finance

Today the average person spends more time interacting on their phone than through any other communication channel. Technology is embedded in daily life. It’s how people connect, transact, review and make decisions. Customers have come to expect integrated experiences facilitated by technology. Employees too. It, therefore, makes sense to leverage technology that integrates easily with mobile apps to keep connected with customers and employees.

With embedded finance there’s an opportunity to improve employee engagement and gain a competitive advantage by modernizing rewards and expense programs. It becomes possible to understand what’s important to employees and leverage technology to get closer to delivering on their expectations.

Companies that have thousands of employees working different shifts, in different locations, can find it challenging to keep them engaged. Being able to deliver rewards and benefits faster through a neo-banking solution and tailoring benefits to match what employees need, changes this by making them feel more valued. When employees feel valued, they’re more productive. It also helps to improve employee retention. 

Major costs for companies stem from employee disengagement and staff turnover. Disengaged employees are less productive. And with not a lot to differentiate between employers, staff rarely think twice about moving on. Improving rewards and delivering benefits in a way that engages employees and makes them feel valued, gives them a reason to stay.

From company perspective, embedded finance offers a way to enhance both customer and employee experiences with customized digital solutions. Even more traditional banks are embracing the trend, recognizing that neo-banking helps fill a gap by being able to facilitate rewards programs more effectively.

Business Benefits of Embedded Finance

With ongoing economic uncertainty, businesses are under pressure to find ways to reduce costs and improve revenue. For companies with thousands of employees, finding new ways to keep them engaged can be facilitated by technology. In this, embedded finance offers several benefits. All of which can help companies gain a competitive advantage in their specific industry. We touch on some of the benefits here:

Generate more revenue through retention:

Statistics reflect that retaining employees can improve productivity and save costs. Similarly, customer retention is a more profitable revenue stream than customer acquisition. While the idea of rewards programs is not new, traditionally they have failed on implementation. With embedded finance, it becomes easier to manage and deliver rewards which help improve retention. Not having to wait for a regular pay cycle is very attractive.

Derive more value from customer data:

The first-party data gained from customer interactions provides valuable insights. These insights can be leveraged to further improve customer experience. They’re also useful when considering product design or when looking to implement targeted marketing campaigns.  An added benefit is the data can be used to adapt and improve rewards programs to make them even more effective.

Gain internal efficiencies to boost margins

The success of rewards programs depends on the ability to manage and implement them effectively. Even traditional banks have already recognized the benefits of partnering with neo-banking solutions as a way to boost revenues. Neo-banking solutions have the technology figured out, offering better flexibility. This enables them to tailor programs to individual companies and their business needs.

Leverage more value from zero-cost benefits

There are multiple ways in which companies can reward employees that don’t always tie back to a monetary cost. An example is added benefits that come with having a Juice Prepaid Mastercard. Extended warranties and protection plans are just two examples of benefits that can deliver huge value to employees without an associated cost to the company.

How to leverage embedded finance to keep ahead

Rather than slowing down, the pace at which change is taking place in the marketplace is set to accelerate even further. This requires businesses to become more agile and be willing to look beyond traditional ways of working.  People remain a critical element of business success, both from an employee and customer perspective. Yet our lives are dominated by technology. Therefore, technologies that can improve experiences and engagement will also be able to deliver more business value.

Neo-banking solutions have an important role to play in helping companies stay competitive by facilitating rewards programs that can be tailored to specific employee needs. In the long term, this helps to improve loyalty and employee retention. The value of this in uncertain economic times should not be underestimated. Every cost advantage gained by not having to continually hire and retrain staff adds up.

Similarly, the ability to reward employees makes an impact. Especially considering that there is a strong focus on improving employee wellbeing and creating opportunities for career progression. Rewards could include stipends towards gaining further certification or gym memberships, for example. But the real value comes in being able to tailor these benefits to company specific needs. And then having an easy digital way of delivering these benefits to employees at zero cost.Companies have a great deal to gain by unlocking the potential of embedded finance and embracing what Neo banking has to offer. Find out more about Juice Financial.

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