The new wave of fintech innovation has provided small and medium sized businesses with reliable alternative channels of accessing financial services. Before now, businesses had to rely primarily on banks for deposit accounts, debit cards, and credit facilities, but that’s changing with embedded finance, as non-financial B2B platforms can now offer the same services.
Companies ranging from e-commerce platforms and accounting software providers to business management tools are considering layering financial services on their current offerings and for good reason. Global revenue for embedded finance came in at a little under $65 billion in 2022 and is expected to exceed $183 billion by 2027, according to Juniper Research.
The sort of traction that embedded financial products have gained is largely down to their ability to offer businesses the kind of accessibility and convenience not available with traditional financial services providers. They solve niggling problems and as such will continue to attract interest.
Going by the state of the industry and the levels of projected growth, it’s no surprise that more platforms are trying to figure out how to embed financial services into their offerings. Identifying where to start can be tricky, and that’s why we created an easy-to-deploy embedded financial product suite.
Keep reading to understand how to quickly kickstart your embedded finance journey with Bloc.
Why should platforms embed financial services in their offerings?
Beyond the projected growth of the embedded finance industry, what reasons do businesses have to consider embedding financial products in their core offering? Here are a few compelling ones.
1. Improve Customer Experience
One of the upsides of the proliferation of tech-based solutions for various business and consumer needs is the convenience they offer. But on the flip side, businesses and consumers often have to juggle multiple platforms to carry out related activities which can often create friction; for instance, having to access credit from a different provider before shopping on an e-commerce platform.
This sort of friction presents forward-thinking businesses with the opportunity to streamline related customer activities by embedding financial products on platforms customers already use. That way, customers can access financial services without leaving their favourite applications, thus improving their experience and leading to higher retention rates.
Interestingly, customers including SMEs are also on the lookout for such layered solutions. 41% of SMEs would be interested in using banking services offered by a digital service provider.
2. Create New Revenue Streams
By leveraging embedded finance, companies can create new revenue streams and expand their business models beyond their core products and services. For example, e-commerce companies can offer their customers financing options for their purchases, such as instalment plans or personal loans. By partnering with financial institutions or fintech companies. Such e-commerce companies can then earn a commission on the financial services they offer.
Plus, embedded finance can enable companies to enter new markets and expand their customer base. For example, a retailer that offers point-of-sale financing can attract customers who may not have been able to afford their products otherwise.
These benefits also apply to the B2B space. In the Juniper Research study previously quoted, Research author Dominique Tetnowski noted that embedded finance presents a great opportunity for B2B platforms to create new revenue streams as innovative financial services in the B2B sector are not yet as prevalent as they are in the B2C space.
And such innovation-embracing B2B platforms can expect to profit from their efforts, as 47% of SMEs would be willing to pay the same or higher fees doled out to traditional banks for embedded financial products that offer a better experience.
3. Access Valuable Data
Data is the lifeblood of businesses that thrive, and embedded finance can provide actionable insights in truckloads. By analysing customer financial data, companies can gain insights into customer behaviour and preferences, which can inform business decisions and improve customer experience.
For instance, a retailer that offers a store credit card can analyse customer spending patterns to understand which products are most popular among its customers. By using this data, the retailer can make informed decisions about product assortment, marketing campaigns, and pricing strategies, all of which can improve customer experience and drive sales.
Navigating the embedded finance space as a business with a different core product can be a nightmare if not managed properly. It’s one of the reasons why our solutions at Bloc are designed to enable businesses to easily access and distribute financial services.
How can we help you to kickstart your embedded finance journey?
1. Start with Accounts
With our accounts feature, you can securely create naira bank accounts for anyone, thus enabling them to save, send and receive money with ease and speed. It’s available on both the Bloc API and the dashboard.
2. Embed payment capabilities with ease
With Bloc, you can accept payments via multiple methods and payment providers without writing any code. We offer over seven payment methods including card, bank transfer, and direct debit, and access to more than twelve payment providers across five countries.
3. Issue virtual NGN and USD debit cards
Enable customers to shop and make payments across borders using virtual debit cards powered by Bloc. Our cards work on most online platforms so your customers can enjoy a seamless payment experience on their favourite apps. You can access this feature via the Bloc dashboard or API.
Build with Bloc
Our goal is to keep expanding our offerings to simplify access to and distribution of financial services for businesses of all sizes. If you’re ready to take a dive into the world of embedded finance, we are happy to hold your hands and make your experience as seamless and as profitable as possible. Get started.