In our fast-paced digital world, businesses must adapt to stay relevant, and embedded finance solutions are quickly becoming crucial for achieving business success.
Put simply, embedded finance allows businesses that are not financial institutions to include financial services or products within their digital offerings. With faster and more accessible customer transactions, streamlined back-end processes, and increased revenue potential, it’s no surprise that embedded finance has been branded “the next-generation opportunity.”
From embedded lending and payments to insurance opportunities, the solutions offered by embedded finance can revolutionise your business operations. Read on to discover why embedded finance solutions are crucial for your business's success.
Embedded Finance Solutions on the Rise
Let’s explore some of the embedded finance trends that are shaping solutions in the space right now.
Embedded payments are possibly the most obvious embedded finance solution available to customers. They allow immediate payments removing friction meaning customers don’t need to break the journey to pay for a product.
But beyond that, companies with embedded finance solutions can now hone in on customers' instant gratification preferences. Real-time payments mean that users can get paid instantly, which works great if the platform serves sellers, for example. It’s also a slick way to power the gig economy, a growing trend.
The Buy Now, Pay Later craze was an early precursor to embedded finance solutions. Although it is still making waves with retailers incorporating external BNPL providers, it has paved the way for embedded lending as a solution, where businesses can offer larger, interest-free, delayed-payment loans at the point of sale to incentivise immediate sales. Add-ons like embedded insurance are also becoming increasingly common, allowing customers to protect their new purchase at the point of sale.
Types of Embedded Finance Solutions
Now that we’ve looked into some of the key trends shaping solutions in the industry, let’s get specific and explore a couple of examples of embedded finance solutions.
Embedded payments can take many different forms; a popular type of embedded payment is the one-click payment option, which is appearing on more and more websites. Designed to make payment as easy, frictionless, and “invisible” as possible, it allows websites to save customers’ card information, so they don’t have to re-enter their card number every time they want to make a purchase. Amazon is an excellent example of a one-click payment system. It allows users to buy items instantly without even having to add them to their basket.
Embedded lending can happen within the business’ website too. This isn’t uncommon, of course. Increasingly, for example, brick-and-mortar furniture stores may offer 0% finance deals when you put in a larger order. Embedded finance digitalises this experience through unsecured and secured loans available for larger purchases. But it goes further than that; embedded lending targets institutions too, offering an opportunity for B2B companies to benefit from embedded finance.
These different finance solutions could enhance a business, whether implemented separately or as part of an overarching embedded financing strategy. But what specific benefits can you expect?
The Benefits of Embedded Finance Solutions for Businesses
Savvy businesses can easily see the opportunities presented by embedded finance solutions. Some of the key embedded finance benefits for businesses include:
Increased conversion rates due to fewer friction points for customers with one-click checkouts.
Improved customer retention due to streamlined payment options that make it easy to buy again and again.
A competitive edge as a result of features like real-time payment options that allow users to get paid instantly.
Differentiation opportunities with new use cases, for instance, through the emerging B2B embedded lending model.
Providing an end-to-end customer experience where payments, lending, and insurance can all happen on the retailer’s website.
As you can see, there are lots of benefits to implementing embedded finance solutions. But how do you implement them successfully in your own business?
Implementing Embedded Finance Solutions Successfully
With all these exciting solutions at your doorstep and the many benefits you can expect to reap, it’s easy to get overwhelmed. But implementing just any embedded finance solutions for the sake of following trends and staying ahead of the competition might not yield the results you’re hoping for.
A recent McKinsey report proposes there are two key ways to differentiate your embedded finance solutions. The differentiation you choose to implement will likely depend on the type of offering you’ve already got in place.
For instance, you could choose to focus on product breadth, where you actively expand into as many solutions as possible. You may start simple, but your strategy is to create an entire ecosystem of solutions to serve your customers end-to-end where possible. This may mean working with several embedded finance platforms that can integrate with your business. Or, you could choose to focus on product depth, where you work with niche providers to focus on creating one or two solutions for your customers to start with.
Whatever approach you choose, working with specialist embedded finance companies to deliver your solutions is a good idea. If you’re looking for a quick turnaround, you might want to find a specialist with the expertise and know-how to implement solutions quickly, sometimes in a matter of weeks.
There are so many great solutions out there that could make goals like embedding finance solutions to enable SME lending a breeze. For example, some platforms use AI to allow you to manage complex financial decisions relating to credit and risk in seconds. The possibilities are endless.
Whatever your goals, embedding a finance solution is about planning: assessing, defining, and refining your strategy are critical when it comes to implementing with a boost in operational excellence, profitability, and customer satisfaction.
How Ezbob Can Help
At ezbob, we understand the importance of embedded finance solutions in today's fast-paced digital world. Our expertise in the industry allows us to help businesses successfully implement these solutions to achieve their goals. We offer a range of embedded finance products, including lending and payment options, that can revolutionise your business operations and increase revenue potential.
Our services are designed to streamline back-end processes and provide faster and more accessible end customer transactions, making it easy for businesses to provide an end-to-end customer experience where payments, lending, and insurance can all happen on the retailer's website. Our AI technology also allows businesses to manage complex financial decisions relating to credit and risk in seconds.
When it comes to implementing embedded finance solutions, we understand that it can be overwhelming to choose between different alternatives. That's why we work closely with our clients to assess, define, and refine their strategies to ensure that they are successful in achieving their goals. Our quick turnaround time and expertise in the lending sector makes us a reliable partner for businesses looking to implement embedded finance solutions. Contact ezbob today to learn more.