Recent studies have confirmed the top influencers of customer engagement are price (81%), quality (80%) and convenience (55%).1 Amidst a market that is being driven by digital service delivery,2 this lineup places a unique hurdle in front of organizations that aspire to increase revenues, deepen customer loyalty, and improve retention.
These brands need targeted strategies for adding the right types of value that will not only keep current customers engaged but also cover the needs of prospective customers seeking a service provider that has more to offer them. And the concept of “more” is radically different today than a decade ago, when the customer experience was primarily judged by in-person encounters, versus an online session on an impersonal computer screen.
This is one key reason the demand for quality and convenience become even more important for digital organizations who want to meet the market at its greatest point of need. According to Gartner, “by 2025, organizations offering unified commerce experience by frictionlessly moving customers through journeys will see at least a 20% uplift in total revenue."3
And, only a little over a year after eclipsing in-store purchasing as the favored method of consumer buying, the global e-commerce market is set to expand by $1 trillion by 2025.4
These trends are also behind the rise of the embedded finance movement, putting it on a fast track to reach a predicted market value of 138 billion by 2026.5
Embedded finance applications are best known as banking, insurance and lending tools that are seamlessly integrated directly into a ‘nonbank’ brand’s core service platform. Some of the most well-known embedded finance examples include Uber Cash, Facebook Pay, and the Starbucks’ digital wallet app.
However, this is only the tip of the iceberg. Brands everywhere are already incorporating embedded finance tools into their digital service platforms to create a more appealing online experience for customers and make their organizations more digitally relevant within the marketplace.6
And the best part is the opportunity isn’t so exclusive that it applies only to a small segment of the marketplace. Nearly every digital consumer brand has (or could have) a consumer-friendly digital finance component in their customer experience. Whether it be enhancing the checkout experience, incorporating a buy-now-pay-later feature, handling pre-approvals, creating a wallet for future purchases, or any number of creatively inspired value-added features.
By embedding financial tools into the core buying experience, the most successful digital brands have figured out how to remove friction and create a seamless buying journey for the customer. They’ve created the type of experience that keeps customers coming back to purchase again and telling their friends about the ease and simplicity of the buying process.
Nevertheless, it can be difficult for an organization to know where to start when it comes to finding a partner that can guide them through the process of building embedded finance solutions that will enhance their existing business model without starting from scratch. A good partner is invested in helping to determine which products your customers want and need and will support you while you implement and roll out new features and solutions.
Brands do well to choose a financial partner that always has their best interest in mind, all the way from consulting through the financial modeling, technical design and setup steps, to integrating into an existing platform via APIs, to monitoring progress and tracking success.
A great partner will be by your side every step of the way, knowledgeably managing the moving parts, to ensure your embedded finance programs are truly custom configured in a way that augments your customers’ experience and leads you to greater engagement, a higher retention rate, and increased revenues. They will also deliver insight on the best ways to leverage embedded finance programs to further evolve your business model and create new revenue streams, both right out of the gate, and down the road.
If you are considering which embedded finance products might be most beneficial for your buyer, how to incorporate finance tools to supplement your existing platform, or you simply want to learn more about the embedded finance mechanics and choosing the best embedded finance partner, we invite you to download our latest ebook, Value-Added Finance: Uniting Finance and Technology to Increase Brand Value, User Loyalty and Revenues.
About the Author: Walt Granville serves as Netspend’s Senior Vice President, Business Development. Walt leads a team of experts that are responsible for working with partners to unlock growth through payments and digital banking innovation. His Netspend partnership team has developed card programs, employer payment solutions and embedded finance offerings across multiple industries including; Technology, Gaming, Ecommerce, Lending, Fintech, Healthcare, Retail and Alternative Financial Services. An industry veteran with over 20 years of experience in the US and European financial services and payment industry, Walt has held roles managing strategic partnerships and product innovation teams for payment networks, processors, issuers and technology innovators. Prior to joining Netspend, Walt held various roles with Visa, First Data, Affinion Loyalty Group, and Monitise.
1 NotifyVisitors, "21 Customer Engagement Statistics for Business To Know in 2021", March 2021 https://www.notifyvisitors.com/blog/customer-engagement-statistics/
2 Statista, "Share of shoppers in the United States who have increased or decreased digital spending since the coronavirus pandemic as of May 2020, by age group", May 2020 https://www.statista.com/statistics/1154498/share-us-adults-more-half-holiday-shopping-digital/
3 Gartner Predicts 2022: Buyers Dictate Your Selling Strategy, By Dayna Ford, Melissa Hilbert, Mark Lewis, Sandy Shen, Ilona Hansen, Penny Gillespie, Aditya Vasudevan, Published 6 December 2021.
4 Euromonitor, "Retail in Transition: Capitalising on Future E-Commerce Opportunities" March, 2021 https://go.euromonitor.com/webinar-dc-210325-ecommerce-opportunities-2021.html
5 Juniper Research, "Embedded Finance Market Value to Exceed $138 Billion in 2026, as APIs Intensify Fintech Competitive Landscape" July 2021 https://www.businesswire.com/news/home/20210719005652/en/Juniper-Research-Embedded-Finance-Market-Value-to-Exceed-138-Billion-in-2026-as-APIs-Intensify-Fintech-Competitive-Landscape
6 SuperOffice, "How customer experience drives digital transformation", May 2021 https://www.superoffice.com/blog/digital-transformation/