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

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

The rise of Banking as a Service (BaaS) has created unprecedented potential for non-financial brands such as retailers and consumer goods manufacturers to partner with Banks to deliver financial services to their customers within their own-branded platforms and experiences. 

This BaaS-powered capability enables providers to fulfill pent-up demand from customers who want to receive such embedded financial services from their favorite brands. 

Brands that can capitalize upon this opportunity by successfully integrating financial tools into their offerings, with a Bank partner, stand to reap significant benefits, including increased revenue, enhanced loyalty and more valuable long-term customer relationships. 

Embedded offerings boost acquisition, engagement.

For non-financial brands, leveraging offerings from regulated partner banks, such as payments, lending, banking and insurance creates the opportunity to augment–and even transform–their entire customer value proposition by providing complementary, contextual financial services within the customer journeys already taking place across their own platforms. 

What’s more, customer demand for such embedded services is high, as evidenced by the findings of a recent study by Cornerstone Advisors. Based on a survey of 2,500 U.S. adults, the report revealed:

• 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.

• Two-thirds of home fitness fans expressed interest in getting health insurance from home fitness providers with rates based on their personal fitness habits.

• Nearly two-thirds of fashion aficionados would consider getting an investment account from a luxury brand that allowed them to easily invest in that company’s stock.

• Six in 10 car buffs would investigate auto insurance—with rates based on their personal driving history and behavior—directly from a car manufacturer.

• Half of home improvement do-it-yourselfers are interested in a savings account that automatically sets aside money to save for large home improvement projects from Home Depot or Lowe’s.

Brands that already have begun leveraging offerings from regulated partner banks to address this demand have seen tangible benefits beyond just increased revenue stemming from fees. In an Accenture survey of 1,000 non-financial companies

• 88% of organizations that had implemented some degree of embedded finance reported increased customer engagement 

• 85% of such companies reported that the embedded finance options helped them acquire new customers.

“Consumers are very interested in receiving embedded financial services from their favorite nonfinancial brands,” said Seth McGuire, Chief Revenue Officer for Galileo Financial Technologies. “Meanwhile, the rise of BaaS and embedded finance, in partnership with partner banks, affords these brands unprecedented opportunity to meet that demand, and in doing so reap significant benefits including increased revenue, better product offerings and deeper, more valuable customer engagement over the long term.”

To learn more about how non-financial brands can leverage BaaS-powered embedded finance to meet rising demand and transform their offerings, download the latest Embedded Finance Tracker®, a Galileo and PYMNTS collaboration. 

Click here for our in-depth guide to how brands can benefit from BaaS.