The pandemic has forced many businesses to change the way they serve their customers. At the same time, customer expectations have also grown, and these positive transformations will last for some time. In 2022, they will be joined by an upending of the way businesses help their customers with money. Thanks to what is known as “embedded finance”, 2022 will be the year that any organisation can become a financial-services company.
Big breakthroughs will take place in Europe, an area that has long been a hotspot for API-based innovation in the financial services. This is mainly due to its multi-currency banking, cross-border trade regulations and open-banking policy. Neobanks have already altered what people expect from finance-related products and services, and the infrastructure and behaviours for those fully fledged embedded-finance offerings to succeed are now in place.
Embedded finance is an elegant way to enhance the customer experience, strengthen loyalty, increase conversion and drive up margins. Everyday financial services, such as a short-term loan, a debit/credit card or an insurance product – previously seen as the domain of regulated financial-services providers – are now at many brands’ fingertips via APIs.