The rise of embedded finance has created an unprecedented opportunity for any consumer-facing brand to offer financial services that complement its core offering – thereby diversifying revenue streams, improving customer satisfaction and engagement and opening new paths to sustainable long-term growth. 

And with research showing that customers are becoming highly interested in accessing financial services through non-financial brands, the market for such embedded financial offerings is at a key inflection point. 

Against this backdrop, brands that move quickly to meet this emerging demand stand to gain a powerful competitive advantage that can serve as both a key differentiator in the short term, as well as a secure foothold for future growth and transformation over the longer run as the barriers between financial services and nonfinancial brands blur and break down.   

Strategies for Integrating Finance into Your Non-Financial Brand

For brands seeking to seize this ripe opportunity to drive robust, durable new revenue streams by offering the customers financial services, the time to begin the journey is now. The following are three key reasons why your brand should start on this transformative path today.  

1. Consumer demand for financial services is high

Data show that consumers want financial services from the non-financial brands they’re already familiar with. Notably, that demand holds true across a wide variety of industries, a July 2022 survey of more than 2,550 U.S. adults from Cornerstone Advisors revealed.

For instance, the study found that three-quarters of video gamers were interested in an in-game account where they could deposit money and use it to buy and sell virtual in-game items and collect rewards for game achievements and progress. Meanwhile, two-thirds of home fitness fans expressed interest in getting health insurance from home fitness providers with rates based on their personal fitness habits. 

The study also revealed significant consumer interest in receiving auto insurance—with rates based on their personal driving history and behavior—directly from a car manufacturer, as well as savings accounts from home improvement stores Home Depot or Lowe’s that would automatically set aside money to save for large home projects.

2. The benefits of financial services are big 

For brands, offering financial services such as those described above offers significant potential to broaden revenue streams, whether in the form of transaction fees such as interchange and payment processing fees, or loan interest. 

What’s more, there’s evidence that the enhanced engagement brands can drive by offering such services can also actually boost income from core products and services. The Cornerstone study found that, among consumers who had obtained a financial product from a non-financial brand, 32 percent said financial products caused them to spend more money with the brand, while 30 percent said they now choose the brand over its competitors more often and 27 percent felt more loyal to the brand.

In this way, financial services create a flywheel effect for brands–not only generating diverse revenue streams themselves, but also leading to more engaged customers–who spend more on the brand’s core products and services than they had before obtaining the financial product. As the final step in this virtuous cycle, the increased volume of customer data derived from this enhanced engagement can be leveraged to craft more finely tuned and personalized offerings, driving further engagement and satisfaction. 

3. Enablers help make financial services easy  

Given the clear demand and potential benefits to be had for offering financial services, brands may be wondering just how to go about doing so. 

It’s actually quite easy, thanks to a new crop of enablers that specialize in doing the heavy lifting on the technical side, bridging the gap between brands and financial services providers such as banks via platform and API technology to connect the various systems involved in a way that’s fast, simple and flexible. 

Because such enablers already have done the work of integrating with their own financial service partners, brands can simply plug and play, getting up and running much faster. Further, enablers offer a broad network of financial services partners, making it easy for a brand to craft the bespoke suite of financial service offerings that’s right for its unique audience. This ecosystem model also simplifies the process of scaling up financial services; when a brand wants to add new or different financial products, it can do so quickly and easily within the enabler’s platform and APIs. 

Finally, offering financial services for brands brings with it new compliance requirements, and working with an enabler partner makes it simpler to ensure adherence to these guidelines and mitigate risk, while preserving a positive customer experience.

Contact us to learn how your brand can diversify revenue and boost engagement with financial services.