By Danielle Eriksson, Director of Product Management at Apiture
The world looks a lot different today than it did 3, 5, or even 10 years ago, especially in the digital sphere. People still need financial services, just not necessarily in the same way they accessed or used these services in the past.
The environment that financial institutions operate in is always changing. In fact, over time, banking has always experienced an evolution in the methods by which financial services are distributed.
The next frontier brings banking services to customers where they already are through a strategy called embedded banking.
Embedded banking happens when financial institutions empower non-bank partners to offer financial services inside of the partner’s traditionally non-financial digital experience. While many fintechs are interested in offering banking services, the partners that banks seek for this strategy do not need to be involved in financial services today. Indeed, many digital platforms across industries are interested in incorporating banking services into their value propositions.
By incorporating an embedded banking strategy instead of waiting for customers to come to the branch, website, or digital banking application, technology enablers like Apiture can help financial institutions meet customers and prospects in the digital places where they already spend their time. When you add financial services at the right time and place in people’s personal and professional lives where they want and need these services, it creates opportunities for financial institutions to engage customers and grow anew.
Financial institutions that offer their banking services through embedded banking partner channels continue to do what they do best — providing financial services — while also doing something new, and effectively extending their reach through these non-financial partners. They can use an embedded banking strategy to innovate and interact with customers in new ways, ultimately contributing to increased engagement and retention, growth at a lower cost of customer acquisition, and expansion into new target segments.
To learn more, including how embedded banking works, why your institution might be interested in executing an embedded banking strategy, and how to think about engaging and establishing partners, contact us.