Embedded finance in non-financial platforms

In the ever-evolving digital world, the convergence of industries has led to remarkable innovations. One such innovation is the integration of financial services into non-financial platforms, allowing retailers, online marketplaces, and other non-financial entities to embrace embedded finance. This shift has transformed the financial landscape, creating new opportunities for businesses and enhancing customer experiences. In this blog, we will explore how retailers, online marketplaces, and non-financials are embracing embedded finance, backed by compelling statistics.

What is Embedded Finance?

Embedded finance refers to the integration of financial services and capabilities into non-financial platforms, applications, or services. It involves incorporating banking, payment, insurance, lending, or other financial functionalities directly into existing platforms or products. This integration allows businesses to offer seamless and personalized financial experiences to their customers without the need for external financial institutions.

The benefits of embedded finance

Unlocking Revenue Streams:

Embedded finance presents retailers, online marketplaces, and non-financial platforms with lucrative revenue streams. By offering financial products and services, these entities can diversify their offerings and generate additional income. According to a study by Deloitte, businesses that integrate financial services into their platforms can potentially increase revenue by 20% to 25%. Check Out

Enhancing Customer Experience:

Integrating financial services into non-financial platforms enables businesses to provide a seamless and comprehensive customer experience. For instance, retailers can offer instant financing options at the point of purchase, reducing friction and increasing customer satisfaction. A survey by Forrester found that 73% of customers value convenience when making a purchase, highlighting the importance of embedded finance in delivering an exceptional customer experience.

Driving Customer Loyalty and Engagement:

Embedded finance strengthens customer loyalty and engagement by offering personalized financial solutions. Non-financial platforms can provide tailored recommendations, loyalty programs, and exclusive offers based on customer financial data. According to a survey by Accenture, 81% of customers are more likely to choose a platform that offers personalized experiences, demonstrating the impact of embedded finance on customer retention and engagement.

Empowering Small Businesses:

One of the significant advantages of embedded finance is its ability to empower small businesses. Online marketplaces, for instance, can provide working capital loans or invoice financing options to their sellers, enabling them to grow their businesses without the barriers imposed by traditional banking institutions. According to a report by the World Bank, access to financial services for small businesses has the potential to generate 80 million new jobs globally. Refer here

Mitigating Third-Party Dependency:

By embracing embedded finance, retailers, online marketplaces, and non-financial platforms can reduce their reliance on external financial institutions. This independence allows them to have more control over the customer experience, data security, and product offerings. In addition, it enables platforms to innovate rapidly and customize financial services to cater to their specific customer needs.

Conclusion

The integration of embedded finance has revolutionized the way retailers, online marketplaces, and non-financials operate. By unlocking new revenue streams, enhancing customer experiences, driving loyalty, empowering small businesses, and mitigating third-party dependency, these entities are reshaping the financial landscape. With compelling statistics supporting the transformative impact of embedded finance, businesses that embrace this trend will stay ahead of the competition and thrive in the digital era.

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