How Brands and Banks Can Win Big with Embedded Finance Partnerships

Download the latest Embedded Finance Tracker®, a Galileo and PYMNTS collaboration. 

The rise of embedded finance is one of the biggest factors reshaping the financial services landscape. By enabling the delivery of highly relevant financial tools within the context of the customer journeys occurring over brand-owned digital channels, this model offers powerful benefits for brands and banks alike. 

But to harness the full potential of embedded finance to drive revenue growth, enhance customer engagement and achieve critical business evolution, brands and banks must work in close cooperation to ensure their mutual embedded offerings are designed and delivered to be maximally impactful in optimizing their end-customers’ experiences and improving their financial lives. 

Here are some key tips to help ensure your brand-bank partnership is taking full advantage of the embedded finance opportunity.

Leverage Gen Z’s brand affinity 

Generation Z consumers are highly loyal to the brands that resonate with them. They also expect financial services that are as convenient, contextual and personalized as the digital tools they use in nearly all other aspects of their lives. This combination of brand affinity and digital demand presents a major opportunity for non-financial companies to supercharge their value proposition and deepen their relationships with customers in this key demographic. 

Examples of embedded financial offerings that could be attractive to Gen Z include seamless in-app buy now, pay later options for fashion retail, cash-back rewards on purchases through a coffee shop app, or custom savings goals tied to future brand purchases. These and other Gen Z-tailored offerings leverage that demographic’s brand loyalty to develop a deeper connection and drive engagement with both the brand and its bank partner. 

Incentivize engagement with co-branded debit

While co-branded rewards credit cards have long been offered as a way of enhancing brand loyalty, co-branded debit cards now are gaining traction, with major brands including Starbucks, Walgreens and Dollar General offering debit cards linked to deposit accounts held with partner banks. 

3 Things Consumer-Focused Brands Must Do to Win with Embedded Finance

Compared to credit, co-branded debit cards can appeal to a wider audience, including customers who may not qualify for a credit account. Debit co-brands also are generally less risky for brands and banks, because cardholders can only spend the available funds held in the debit account, eliminating the chance of default or unpaid balances. 

Programs can be designed to leverage and enhance brand loyalty by rewarding consumers for increasing their engagement with the brand and its embedded finance solutions. These benefits could include faster fund access or cash back as customers adopt more embedded products or increase overall activity with the brand.

Accelerate innovation with modular, API-first tech

Banks and brands seeking to maximize the impact of their embedded finance offerings can collaborate with fintech specialists to expedite implementation timelines, drive innovation and help secure a competitive edge in the rapidly evolving market.

Among the key benefits offered by these partners are flexible, application programming interface (API)-driven embedded finance platforms that integrate seamlessly with popular e-commerce sites, accounting tools and business operations software to enable easy implementations and highly scalable solutions. 

By adding its niche expertise and tech capabilities to the mix, an embedded finance fintech specialist can serve as the final key ingredient to a successful embedded finance partnership.

Want to learn more?

For more information on how banks and brands can get the most out of embedded finance opportunities, download the latest Embedded Finance Tracker®, a Galileo and PYMNTS collaboration.