Embedded finance is a new business model that has attracted much attention today. Nowadays, non-traditional financial companies such as Amazon and Google are also trying their luck for the market share of consumer financial services. In addition to these enterprise groups, there are also many human resource technology platforms where financial services can be easily obtained.
Embedded Finance is a completely new concept for some people; so today we will look at an example of embedded finance that will change in the near future:
- Embedded payment
Embedded payment refers to payment at the push of a button. It can speed up the checkout and billing process, thereby providing an excellent payment experience. Embedded payment allows users to pay from one location without having to find cash in their pockets or swipe cards. Food delivery applications such as Zomato and Swiggy and payroll automation software allow users to make purchases and embedded payments. These apps enable consumers to pay without having to switch between apps.
- Embedded card payment
In addition to credit and debit card payments, you can also use embedded cards to pay. Embedded cards allow end users to electronically transfer funds to the card and make purchases based on the total value of the cash on the card. There are multiple platforms that can issue smart cards, virtual cards, or expense cards. These cards can easily replace cash. Embedded card payment is safe because all information is encrypted. They also allow faster processing and are cheaper than traditional cards.
- Embedded loan
In this digital age, you don’t have to go all the way to the bank to check your credit or wait for the underwriting process to complete to apply for a loan. Nowadays, many non-financial products/services have entered the financial sector, allowing users to directly apply for and obtain credit when purchasing. This eliminates the need for third-party vendors, excessive paperwork, and lengthy processes. Users only need to press a button to get a personal loan. In addition to grocery delivery or retail applications, even human resource technology platforms also provide embedded credit to make life easier for employees and employers.
- Embedded investment
Agree or not, but not many of us understand safe financial investment. We can’t even think about it, let alone invest. However, financial knowledge is important because it helps to effectively manage our funds. Embedded investment is a wise way of financial management. Embedded investment simplifies the investment process by providing users with a single platform to invest and manage their funds. Embedded investments allow users to invest in the stock market, mutual funds, and retirement savings without leaving their platform.
- Embedded Insurance
According to Standard & Poor’s Global Market Intelligence data, India is the second largest insurtech market in the Asia-Pacific region, accounting for 35% of the country’s 3.66 billion US insurtech venture investment. As people become more tech-savvy, technology integration becomes very important when selling insurance policies. Given the complexity of traditional methods of purchasing insurance plans, we can say that embedded financing is a more viable option. Because it enables insurance companies to easily reach customers. On the other hand, compared with foreign companies, customers are more likely to buy from trusted platforms.
- Embedded banking business
Embedded banking business is a banking business in which non-financial institutions provide similar banking services. It replaces current or savings accounts in banks. You can invest, apply for loans, apply for smart cards or manage your transactions from a single platform. This provides users with a seamless banking experience. Compared with ordinary banking, embedded banking services make processes with fewer touch points more efficient and at a much lower cost.
technology can bridge the gap between financial services and end users. Embedded finance can quickly and easily obtain financial services, thereby improving customer satisfaction. As more and more non-traditional players enter the financial technology field, you can expect direct-to-consumer companies to embrace embedded finance to a higher degree.