Embedded Finance: Facilitating Seamless Services and Partnerships

More than half of card payments in the U.S. take place online. As customers make transactions in a variety of external platforms and applications, you risk losing touch and ceding ground to agile newcomers who facilitate in your place. Consumption models are evolving, and banks need to grow accordingly or risk losing market share.

Defining the role of banks in the new global market means becoming a facilitator of these transactions and staying involved in every step along the customer journey. Embedded finance develops new partnerships and increases revenue as financial services integrate into traditionally non-financial businesses.

Positioning financial services within a contextual user journey expands the customer base and opens new revenue streams. Your non-financial partner bolsters their offerings and improves customer experience. The solution blurs the lines between traditional banking and non-financial industries to allow customers seamless access to financial services. Establishing non-financial partners through embedded finance partners improves a bank’s brand recognition and increases profits.

Mutually beneficial partnerships

Technology and growing customer expectations continue to disrupt banking and business at an increasing speed. Collaborating with partners who are at the forefront of innovation provides banks access to a new set of technological capabilities that facilitates the development of innovative financial solutions. Such innovation is essential to establishing an identity in the global market and acquiring a demographic of younger, digital native customers.

Partnering with non-financial entities expands a bank’s reach — extending to different target markets, including customers typically out of reach of financial services. As the partners understand each other’s needs, they collaborate on marketing campaigns including co-branding and promotions. These strategies strengthen the partnership as brand recognition grows for both parties.

Customers appreciate the ease of making transactions within the platform. This impels them to continue doing business with your partner as well as recognize both brands and explore other financial services you offer. Each partner benefits from an increase in customer engagement and loyalty, which leads to long-term revenue growth.

Build on success

As the bank’s services provide value to the non-financial partner, the partnership develops plans for revenue sharing. Both parties have an interest in the platform’s success and can share profits generated by embedded financial services. As the platform grows, the services offered within it expand. What begins as a payment solution soon grows to offer lending or buy-now-pay-later services, personalized investment opportunities, or a platform for using digital currencies.

Similarly, partners can share data and analytics. Banks already collect a lot of data on customers, but a successful partnership with a non-financial institution increases that amount. Enhancing analytics allows both sides of the partnership to improve products and develop targeted campaigns.

In addition to insight gleaned from new sources of data, both sides share their expertise in different sectors to:

Adopt emerging technologies	Stay up to date on industry trends	Innovate and improve embedded services

Both your bank and your partner’s business work together to gain a competitive advantage.

Make a connection

Modern APIs connect your bank’s financial infrastructure to ecommerce sites and other digital platforms. They bring financial services such as payments, loans, and investments into a platform that customers are already using. Users access services in a platform without having to leave the application or website, and you benefit from providing your services in commonly used platforms.

SoftServe builds a technology layer on top of the balance sheet that enables you to provide embedded finance to distributors without additional partnerships. We bridge gaps in technology, cloud, and APIs to provide a flexible, customizable solution that can be part of your ecosystem and integrated into your partner’s.