COMMUNITY BANKS SHOULD GRAB EMBEDDED FINANCE OPPORTUNITY
shift away from the mentality of expecting the customer to do the work and instead meet the customer where they are in the transaction process. This can best be done with embedded finance. Embedded finance can also tackle existing challenges. Research from Accenture found that in addition to providing banks with access to new markets, it also reduces customer acquisition and servicing costs. How can community banks implement embedded finance tools? One of the easiest, most cost-effective ways to embrace embedded finance is through partnerships with technology providers. When looking for a partner, banks should consider their top goals for embedded finance use cases, problems they are looking to solve, current customer demands and overall vision for the future. It is critical that a technology partner aligns with these to make the adoption of embedded finance solutions seamless and tied to the bank’s goals. Embracing this new technology opens up the possibility of improving the experience for current customers — but that’s just the start. It also allows community banks to reach thousands of new customers that they have not yet established a relationship of service and trust with, as well as niche populations that do not use traditional banking services. Banks’ expertise and regulatory compliance make them key players in the emerging embedded finance field, as long as they have the ability to stay up to date with new user demands. As embedded finance continues to drive everyday transactions, it is clear that banks need a clear implementation strategy. Offering embedded financial solutions will be key for community banks to retain clients and maintain existing revenue streams — and unlock new ones. ▪ About Veritran Veritran is a global tech company committed to simplifying banking experiences. By creating innovative customer-focused products, Veritran empowers over 50 million people to run their financial world.
By Greynier Fuentes VP of Sales & Digital Strategies at Veritran
Consumers today expect a simple, digital experience in all aspects of their lives — even their banking. In fact, they are increasingly demanding a more seamless banking experience, and looking for banking products and services to be built into their everyday activities. This is becoming the norm thanks to embedded finance. What is embedded finance? You’ve likely seen it mentioned on the news and social media or in your favorite financial magazines and newspapers — but what exactly is “embedded finance?” McKinsey’s definition is, “the placing of a financial product in a nonfinancial customer experience, journey or platform.” To put it simply, embedded finance is technology that simplifies and streamlines financial transactions for consumers. It allows them to easily make payments, borrow money, open credit cards and more in one simple action via a single channel. Embedded finance solutions are becoming the norm in the e-commerce world. In fact, in a recent report, Ernst & Young estimated that the market size of global embedded finance across the entire value chain will grow from $264 billion in 2021 to $606 billion in 2025. Why is embedded finance important for community banks? Embracing embedded finance opens the door to immense deposit and fee growth opportunities for community banks. For instance, as consumers transact on their mobile device, they are given several payment options. It’s highly likely that they will select whichever payment option is quickest. If your bank’s payment isn’t offered through an embedded finance channel, the consumer will simply look at the other methods of payment. Gone are the days of manually entering all that personal and credit or debit card data. If community banks want to keep their customers’ business, they must
BANKS CAN MEET CUSTOMERS WHERE THEY ARE AND REAP BENEFITS BY PUTTING THEIR PAYMENT TECHNOLOGY INSIDE NONBANK PLATFORMS AND APPS.
46 THE FINANCIAL BRAND INSIGHTS FALL 2023
THE FINANCIAL BRAND INSIGHTS FALL 2023
Powered by FlippingBook