Remember when getting a loan meant a trip to the bank, opening a new credit card involved endless forms (ugh), and buying insurance was needlessly complex? Those days are becoming a relic. Why?
Two words: embedded finance.
The concept is simple enough: bringing financial services directly to you within a non-financial app or website. Instead of having to leave a website to pay for something or get a loan, the financial tools you need are already there.
Think about it like this:
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Getting a car loan right at the dealership.
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Paying for a flight and adding travel insurance in the same transaction.
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Using "buy now, pay later" to check out on an online store.
How It Makes Your Life Easier
Embedded finance works by giving you what you need, exactly when you need it.
When a financial option is available at the right moment, it:
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Saves time. No more searching for a separate website, filling out different forms, or remembering new passwords.
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Reduces stress. You don't have to think as much. The right choice is presented to you, which makes things feel easy.
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Increases convenience. The process feels smooth and uninterrupted.
How It Helps Businesses
For businesses, embedded finance is a great way to build customer loyalty. When a company provides a service that's seamless and convenient, customers are more likely to stick around.
They’re busy and just want to get the task at hand done effectively and quickly. When a business can help customers do that, they win.
And think about this:
Offering a built-in payment or lending option, for example, keeps customers within the company's "world." This creates brand stickiness and helps the business understand its customers better, leading to even more personalized offers.
It's More Than Just Payments
While things like "buy now, pay later" are a big part of embedded finance, this trend goes further.
It also includes things like:
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Embedded Lending: Getting a loan from an online store to buy a big-ticket item.
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Embedded Insurance: Buying insurance for a new gadget right when you check out.
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Embedded Investing: Automatically investing small amounts from your daily purchases through an app.
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Embedded Banking: A ride-sharing app offering its own debit card to drivers.
And, every form avoided contributes to a more positive experience.
The Bottom Line
For businesses, embedded finance isn’t just about offering more services. No, this is about fundamentally changing the customer journey. By integrating financial solutions where they naturally fit, companies can:
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Stand out in a competitive market.
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Improve customer satisfaction and loyalty.
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Find new ways to make money and grow.
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Better understand what their customers want.
Ultimately, businesses that make finance a seamless, easy part of their customers' lives will be the most successful.