Banks face significant growth potential when they address the needs of underserved customers. Embedded finance is an opportunity to prioritize inclusion while growing their customer base—but most of today’s players are getting it wrong.
A changing landscape
Financial services companies have a unique opportunity to address societal issues by serving new markets. They are in a position to impact almost every corner of the economy and proactively rebuild trust with those who have been historically underserved. Embedded finance is a significant and growing market opportunity, and it’s opening new avenues for firms to increase their footprint and expand into underrepresented markets.
Embedding financial services at the point of sale, in the moment they are needed, is disrupting long-established distribution channels and may also result in the creation of an entirely new set of alliances between customers, financial institutions, and nonfinancial services partners.
Embedded finance capabilities and solutions include:
Embedded payments: Embedded payments provide convenient experiences that enable customers to pay for services during the checkout process.
Embedded insurance: Embedded insurance allows customers to add insurance coverage to products or services at the point of sale.
Embedded lending: Embedded lending provides customers with flexible financing offers to borrow and delay payments at the point of sale.
Embedded investing: Embedded investing enables customers to grow their assets (via investments or earning interest) in a simple process, with low barriers to entry.
Embedded banking: Embedded banking provides customers and users with the capabilities of a bank within the distributor platform, so they can receive income and access funds faster.
Embedded financial health: Embedded financial health allows customers to advance their financial literacy, financial access, or financial health by building credit and receiving feedback on spending habits.