How does Embedded Finance benefit end-customers?

Banking at the point of need

The journey of end customers in financial services has been one of ongoing evolution, punctuated with sudden bursts of innovation - e.g. the creation of credit cards, or ATMs. But the biggest changes have occurred since the adoption of online and mobile banking, alongside the broader digitalization of many aspects of our lives. Embedded Finance is the next 'step change' in financial services - the next evolution of fintech - which will solve more customer needs, by providing:

• A frictionless customer experience

• Convenience

• Improved financial inclusion

• Financial solutions designed for specific verticals

• Banking at the point of need

Here are some ways these benefits are put into practice today:

• Now commonplace and convenient, an e-wallet allows customers and businesses to easily transact within the confines of a secure account, separate from their current accounts, and with the ability to execute international transactions quickly. In a recent UK study, Temenos found that of those who have checked out using an e-wallet service, 72% do so at least once a month.

• Microloans can easily be provided at the point of need online (checkout) with Buy-Now-Pay-Later (BNPL), a growing service. The service has reached its post-regulation maturity, but that is not stemming from the trend. A study by Juniper Research estimates that more than 900 million customers will use the service by 2027 - a 157% increase from 2022 numbers.

• Financial inclusion has long been on the agenda of most financial institutions, and now, embedded finance can help make strides toward a reality where the term is no longer needed. In a recent implementation, banking capabilities were embedded into an existing messaging platform. Within two months of launch, the social bank acquired over 1 million customers.