Top 5 embedded Finance Use Cases

It has never been easier for companies to build, integrate and bring to market new financial offerings.

Why? Because of the vast reach of embedded finance and its robust functionality for organisations of any size.

With the advent of Banking-as-a-Service, or BaaS for short, smaller businesses and startups have access to financial infrastructure that would otherwise be out of their grasp.

Embedded finance isn’t just some piece of software or system that you can quickly google and install. Rather, it’s about bundling together multiple financial services by harnessing third-party technology stacks into one platform. And by using banking Application Programming Interfaces (APIs), like the ones offered by Integrated Finance, Fintech startups can easily navigate the complex world of banking integrations, policies, compliance, and restrictions.

Here are 5 examples of just how embedded finance changes the way organisations operate and adopt new technology offerings.

Crypto for the new decentralised age

The ideology around digital currencies has never been stronger – from Bitcoin to Dogecoin, and Tether – but their systems aren’t easy to integrate. However, by using embedded finance and APIs, buying, selling, and storing cryptocurrency is made possible even inside a single app.

For example, APIs enable supermarkets to accept various cryptocurrencies as payment methods at their tills or allow consumers to cash out their digital currency for cash. These aren’t services that are a part of traditional banking – many financial institutions still shun cryptocurrency – but more digital banks are offering them as solutions to their customers.

Easy investing for everyone

Let’s be honest, investing isn’t the easiest concept for everyone to grasp. From understanding what a bull market is to comprehending why the new CEO of a giant tech company count tank its stock price, to the story behind Reddit and Gamestop. The average consumer wants to invest what money they can and watch it grow.

That’s what embedded finance enables organisations to do all of the heavy lifting. Any company can use BaaS to set up a personalised portfolio for their clients, allow the users to invest their spare change, and adjust the investments according to the market. 

Ensuring insurance is painless

The old insurance system was painful and long-winded for consumers. If they wanted to insure their house, vehicle, or another asset, they had to speak to a broker, negotiate terms, and fill out copious amounts of paperwork. APIs and embedded insurance have changed all of that.

Businesses can now offer and execute insurance policies at the drop of a hat. For example, when buying a high-value computer online, the commerce store can instantly offer the customer an insurance plan as a part of their purchase. The moment the customer receives their item, it’s insured and they don’t need to phone around to figure out the best rates.

Embedded payments for all

Easy access to, and a wide variety of, payment options are essential in influencing a customer’s purchase. With the use of embedded payments, this process becomes significantly easier for any organisation to use – even watering it down to hooking up an API and selecting which payment methods to display.

For online shops, customers need to be able to use their credit cards, debit cards, rewards points, bank transfers, payment providers (like PayPal), cryptocurrency, and more. If a store is missing even one popular payment method, it can cost them a tremendous number of sales.

Embedded lending for purchases

Consumers used to have to apply for a loan or credit card to borrow the amount required for a large purchase. It was a process that required traditional banking institutions to check over every applicant and purchase, leading to extended wait times for approvals. However, with the use of embedded lending, users can decide on the terms and repayment structure during the purchase pipeline.

This doesn’t only benefit consumers. A company that sells high-end computer equipment or furniture, can use embedded lending to sway the customer into a faster purchase.

Move towards embedded finance

Embedded finance empowers customers with more financial options while streamlining their experience and reducing pain points. This assists organisations in tailoring experiences to fit their customers and removing barriers to entry when dealing with complex financial products.

It’s time to move towards the financial digital age and move away from traditionally slow systems.

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