A new way to think about banking services
FROM SEAMLESS TRANSACTIONS TO SMART LENDING, FORWARD-THINKING FINANCIAL INSTITUTIONS ARE DELIVERING THE SERVICES CUSTOMERS NEED WHEN THEY NEED THEM
These days, consumers expect their online and in-person purchases to be smooth and fast—and retailers are happy to oblige. “Cleaner and more seamless experiences create more positive relationships with customers and engender more loyalty,” says Cory Treffiletti, senior vice president of marketing at fintech firm FIS. Technology is playing a key role in helping companies deliver the speedy and safe checkouts customers demand. At the same time, sophisticated new tools offer opportunities for companies to expand their markets and build loyalty with customers.
Consider embedded experiences, which enable retailers to wrap financial services companies’ capabilities into their online presence. These digital partnerships keep consumers from having to enter their payment information at every site they visit. Instead, they can make one-click payments to order lunch from the restaurant around the corner or a bespoke suit from a Parisian boutique. It’s fast, frictionless, and safe—and just what customers want. “There’s no distraction or interruption,” Treffiletti says.
THE ALL-IN-ONE MERCHANT
Embedded experiences also offer considerable benefits to service-oriented companies. For instance, a daycare provider can build more functionality into the software platform it utilizes to run its operations. Instead of using it simply to check in kids when they arrive, schedule staff, and pay employees, the platform could also handle sending invoices to parents, managing the provider’s insurance policies, and setting up a new line of credit to ease cash flow.
Meanwhile, weaving financial services into their offerings can help companies build stronger, more durable connections with their customers. Take a pro football team, for example. That organization may already partner with a bank to offer its fans a branded credit card. But Treffiletti notes that teams can do more to create closer connections with their fans. That might include offering a range of financial services to cardholders or connecting customers with other companies —from retailers to service providers— that might appeal to them.
“In this case, the sports team becomes a nexus of customized offers and opportunities for that fan base,” Treffiletti says. “And that fan base typically sees those recommendations as very positive because they have that positive brand association with that team.”
A NEW FRONTIER FOR BANKING
With the rise of digital banking, it’s become more difficult for banks to sell customers on the broad range of products and services they offer, from funding for a fast-growing company to loans for an eager car shopper.
These embedded partnerships can help put banks in the right place at the right time, like a retailer that wants to offer customers a buy-now, pay-later option—or the daycare provider that wants to unveil an earned-wage access policy for its employees. It also can help banks and financial services companies build their brand alongside the companies they’re partnering with, benefiting from customers’ loyalties to their favorite football team or lifestyle brand.
The push toward embedded experiences is still in the early stages, although Treffiletti predicts that consumer demand for fast and easy transactions will likely continue pushing companies in this direction. On the financial services side, however, many banks are still sitting on the sidelines—and maybe even waiting for customers to start walking through their doors again. “The more banks get exposed to embedded finance and the opportunities it represents, the more quickly they’ll start to understand its value,” he says. “They’ll have an epiphany.”