Embedded finance represents a major opportunity for consumer-focused brands to boost revenue, enhance customer engagement and shore up long-term business resiliency. By offering financial services, such as payments, banking, lending and insurance, that complement their core offerings, such businesses can keep their customers closer, sell them more products, and provide them with better experiences.

Brands across industries are recognizing the potential value of embedded finance. A new two-part study from Galileo Financial Technologies and Payments Dive surveyed over 150 executives in April 2024, across retail, ecommerce, hospitality (airline or hotel), and automotive industries about where their companies stand in offering embedded finance. They found that more than nine out of ten executives surveyed (93%) reported that their companies currently offer at least one embedded finance solution. And of those firms, 62 percent were planning to roll out additional embedded offerings within the next six to 18 months.

But for consumer-focused brands looking to add embedded finance solutions of their own, realizing the full value of this transformative opportunity isn’t quite as easy as simply launching a payment card or lending product and waiting for revenue and engagement to skyrocket. Instead, consumer-focused companies must take a strategic approach, carefully considering what types of financial services make sense for their business and customer base, and how such tools would best fit into the context of their overarching offering and value proposition.

Strategies for Integrating Finance into Your Non-Financial Brand

For consumer-focused brands considering integrating embedded finance offerings, here are three key considerations for success:

Determine the embedded finance business fit

The range of financial capabilities a consumer-focused business can embed into its core offerings is wide, spanning credit and debit cards, deposit accounts, rewards, lending and installment loans (including buy now, pay later), insurance, employee benefits and more. Given the variety of choices, it’s critical for consumer-focused brands to determine which specific types of financial tools are the best fit for their business and how those offerings can be monetized effectively.

That monetization can take the form of direct revenue, such as transaction fees and loan interest, but also can comprise enhanced income from core products and services. Research has shown that embedded financial products drive many consumers to spend more money with a brand, feel more loyal to that brand and choose it over competitors more often.

Develop an embedded finance value proposition

Once the potential value of an embedded financial service to the business is established, the next step is to ensure the capability has meaningful value to a brand’s customer base, as well as any new target market segments. Successful embedded finance products are those that can address customers’ problems and/or improve their experiences, such as by making them more convenient or rewarding.

The same two-part study from Galileo Financial Technologies and Payments Dive also surveyed over 1,000 consumers in April 2024 and reported that three out of four were highly interested in rewards-based embedded finance offerings from brands. What’s more, a whopping 95 percent of consumers already belonged to at least one retailer or brand rewards program, and 51 percent of those paid a fee to do so–demonstrating the significant revenue and engagement opportunity from embedded rewards.

Establish the right embedded finance partner relationships

Given most consumer-focused brands’ inherent lack of familiarity with providing financial services, it’s crucial to find experienced, knowledgeable partners that can offer the financial and technology support needed to design, implement and maintain embedded financial offerings.

How Consumer Brands Benefit from Partnering with Banks To Provide Embedded Finance Tools

Regulatory compliance is another critical factor to consider when offering financial products, so brands should ensure partners are well-versed in that area. A compliance-first approach is a must, and fintech providers such as Galileo that a fully regulated financial institution backs provide security and compliance benefits, while also offering customized, seamless digital experiences that enhance customer satisfaction–and drive long-term success with embedded finance.

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