Exploring The World Of Embedded Finance: A Sustainable Business Model

As time goes by, the world is being introduced to new technology, new concepts, and new ideas, which further work to make the lives of people efficient and smooth. When examining financial services, one can observe how far along they’ve come; from only being able to deposit your money into your bank account to now running an entire business through your banking apps. This is why it has witnessed impressive growth across the globe and even aided in the birth of a new concept called Embedded Finance.

If you are not sure about what the term is all about, then worry not. Embedded Finance is defined as the integration of financial products like money transfers, payments, digital wallets, credit, and debit cards, loans, and insurance. You can even provide services to other non-financial institutions. So, now the question is: how can Embedded Finance help you with your everyday life? If you are interested in knowing more, then keep on reading.

Energepiccom/Pexels | From only being able to withdraw and deposit money, now you can avail so many services from a single platform

Understanding Embedded Finance

This is a concept that is based on making a one-for-all solution when it comes to financial matters, creating a digital financial marketplace. It is not a unique idea it has been a part of people’s everyday life, such as paying for a drink bought or using different options to pay for the Uber that you take to work.

Here’s How Embedded Finance Helps

1. Compliance-Oriented And Regulated

Many non-financial institutions benefit from Embedded Finance since it helps them in highly regulated and compliance-oriented spaces. For many companies or organizations, Embedded Finance serves as a simple and efficient way to put all their financial matters in one place while ensuring they are taken care of. 

Pixabay/Pexels | What can be better than a safe and reliable platform for all your financial queries?

2. Prioritizes Customer Acquisition 

Many brands rely on their existing clientele rather than their pool of potential clients. This is because their existing clients are most likely to avail of another service or purchase another product. When it comes to customer acquisition, Embedded Finance helps develop higher product stickiness and conversion rates because the product’s sale depends upon these additional services.

3. Introducing Newer Revenue Streams

Since revenue streams and consumer behavior can benefit banks and other financial institutions, Embedded Finance opens the doors for the newer audience to get in touch with financial institutions that haven’t reached a certain level of digital marketing. However, it significantly increased the geographical reach of the bank without it having to start a new branch in a new location. Generally, starting a new branch would require rented premises, a staff, security, and all the tide bits that come with it, but thanks to embedded finance, banks can reach different locations with just 1/10th of the original cost.

Expect/Pexels | Banks love to make money and save money wherever they can.

This is the future of finance; welcome to the world of Embedded Finance.