While consumers have driven this trend, technology has enabled and accelerated it, helping to make transactions faster and even more streamlined. It’s moved from consumers and companies relying on integrated experiences—say, a retailer offering customers a range of payment options—to embedded experiences that are designed to make the process as frictionless as possible.
In an integrated experience, a retailer might offer a button to let customers use a payment service such as PayPal, which allows customers to avoid typing in their credit card details during every transaction. But the process required sending the consumer from a retailer’s shopping cart to a secure checkout page before being redirected back to the retailer.
Embedded experiences remove that clunky step by wrapping a financial services company’s services tightly—and often invisibly—into the retailer’s online presence. Thanks to that digital partnership, consumers are able to make one-click payments to order lunch from the restaurant around the corner or a bespoke suit from a Parisian boutique. It’s fast, frictionless, and safe—and just what customers want. “There’s no distraction or interruption,” Treffiletti says.
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Illustrations by Peter Oumanski
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It’s not just retailers that can benefit from embedded experiences. This technology can help service-oriented companies more effectively manage their businesses and provide better experiences to their clients and customers. Consider a daycare provider that uses a software platform to run its operations; it allows the provider to handle tasks such as checking in kids when they arrive, scheduling staff and students, and paying its employees.
But what if that software platform also included a broader range of financial services?
The daycare provider could then more easily send invoices to parents, manage its insurance policies, and establish a working line of credit to ease cash flow. As Taira Hall, senior vice president of embedded finance at FIS, puts it, that daycare facility would, in effect, become “a thriving financial services ecosystem.”
THE ALL-IN-ONE MERCHANT
The rise of online banking and payments has meant that fewer customers are walking through the lobbies of bank branches. That’s left many banks wondering how to sell their customers on the broad range of products and services they offer, from funding for a fast-growing company to providing a loan for an eager car shopper.
These types of partnerships can help put banks in the right place at the right time. They can help reach a retailer that wants to offer customers a buy-now, pay-later option—or the daycare provider that wants to roll out an earned-wage access policy for its employees. “The best way to find these customers is to go into the platforms they use to run their business,” Treffiletti says. “We’re seeing new opportunities being created because the banks and financial institutions are reaching those customers at the point of need when it’s most likely to resonate.”
In many cases, banks and financial services companies operate behind the scenes in these embedded experiences. But Hall notes that opportunities exist for financial firms to build their brand alongside the company they’re partnering with, benefiting from the strong loyalty a customer has for their favorite football team or lifestyle brand. “Not all banks will participate in this ecosystem,” she says. “But the ones that do have the mindset that the market is evolving, and that there are opportunities to not just support your core retail business, but also to find new ways to grow and delight customers.”
So how mature is this push toward embedded experiences? Treffiletti believes it’s still in the very early innings. Consumer demand for fast and easy transactions will likely continue pushing companies in this direction. On the financial services side, however, many banks are still sitting on the sidelines—and maybe even waiting for customers to start walking through their doors again. “The more banks get exposed to embedded finance and the opportunities it represents, the more quickly they’ll start to understand its value,” Treffiletti says. “They’ll have an epiphany.”
A NEW FRONTIER FOR BANKING
From seamless transactions to smart lending, forward-thinking financial institutions are delivering the services customers need when they need them
A new way to think
about banking services
Weaving financial services into their offerings can help companies build stronger, more durable connections with their customers. Take a pro football team, for instance. That organization may partner with a bank to offer its fans a branded credit card. Those types of cards often offer perks such as discounted tickets or deals on jerseys at the stadium gift shop. But Treffiletti notes that there is plenty more these teams can be doing to create closer connections with their fans. That might include offering a range of financial services to cardholders or connecting customers with other companies—from retailers to service providers—that might appeal to them.
“In this case, the sports team becomes a nexus of customized offers and opportunities for that fan base,” Treffiletti says. “And that fan base typically sees those recommendations as very positive because they have that positive brand association with that team.”
— Taira Hall, senior vice president of
embedded finance, FIS
“[For banks that understand] the market is evolving, there are opportunities to not just support your core retail business, but also to find new ways to grow and delight customers.”
LORES
— Cory Treffiletti, senior vice
president of marketing, FIS
“We’re seeing new
opportunities being created because banks and financial institutions are reaching customers when it’s most
likely to resonate.”
Welcome to the era of the easy customer experience. These days, consumers expect any purchase they make—from online orders to in-store checkouts—to be smooth and fast. And in large part, retailers are happy to oblige. “Cleaner and more seamless experiences create more positive relationships with customers and engender more loyalty,” says Cory Treffiletti, senior vice president of marketing at fintech firm FIS.
In March 2020, a small biotech firm in Sterling, Virginia, offered its assistance to local public-health officials in combating the spread of the novel coronavirus. The company, Aperiomics, utilized deep-DNA sequencing, along with its vast database of pathogens and microorganisms, to test for COVID-19 and help overworked laboratories in Virginia and across the country.
While there is nothing unusual about a privately held company stepping up and responding in a time of crisis, there are some noteworthy aspects to the Aperiomics story. First is its rapid growth. Launched in 2014, the firm quickly established itself as an industry leader in genomics and bioinformatics, and its pathogen database is now the largest in the world. Second, Aperiomics received crucial early-stage funding from the National Science Founda
THE ALL-IN-ONE MERCHANT
In March 2020, a small biotech firm in Sterling, Virginia, offered its assistance to local public-health officials in combating the spread of the novel coronavirus. The company, Aperiomics, utilized deep-DNA sequencing, along with its vast database of pathogens and microorganisms, to test for COVID-19 and help overworked laboratories in Virginia and across the country.
While there is nothing unusual about a privately held company stepping up and responding in a time of crisis, there are some noteworthy aspects to the Aperiomics story. First is its rapid growth. Launched in 2014, the firm quickly established itself as an industry leader in genomics and bioinformatics, and its pathogen database is now the largest in the world. Second, Aperiomics received crucial early-stage funding from the National Science Foundation.
Created by Congress in 1950 (“to advance the national health, prosperity, and welfare”—a mission that especially resonates in the current climate ), the NSF currently administers more than one-quarter of the federal budget for basic research in science and engineering through rigorously vetted grants. And while the bulk of the agency’s current $8.3 billion budget is disbursed through awards to colleges, universities, and other research institutions, a sizable portion is set aside to help researchers and entrepreneurs transform their ideas—many of them in areas that have yet to be explored by business—into commercially viable products and services.
Perhaps the most exciting—and economically impactful—of the NSF’s entrepreneurial initiatives is its Small Business Innovation Research (SBIR) program. Also known as America’s Seed Fund, it was essential to the growth of Aperiomics, along with many other innovative companies. (Qualcomm, whose components are found in countless smartphones, received valuable early support.) Businesses and individuals with a promising idea can receive capital in three rounds of SBIR funding—up to $256,000 in Phase I, as much as $1 million in Phase II, and matching funds up to $500,000 in Phase IIB—along with the guidance of NSF experts to help navigate the hazardous terrain facing startups.
It’s not just retailers that can benefit from embedded experiences. This technology can help service-oriented companies more effectively manage their businesses and provide better experiences to their clients and customers. Consider a daycare provider that uses a software platform to run its operations; it allows the provider to handle tasks such as checking in kids when they arrive, scheduling staff and students, and paying its employees.
But what if that software platform also included a broader range of financial services? The daycare provider could then more easily send invoices to parents, manage its insurance policies, and establish a working line of credit to ease cash flow. As Taira Hall, senior vice president of embedded finance at FIS, puts it, that daycare facility would, in effect, become “a thriving financial services ecosystem.”
It’s not just retailers that can benefit from embedded experiences. This technology can help service-oriented companies more effectively manage their businesses and provide better experiences to their clients and customers. Consider a daycare provider that uses a software platform to run its operations; it allows the provider to handle tasks such as checking in kids when they arrive, scheduling staff and students, and paying its employees.
But what if that software platform also included a broader range of financial services? The daycare provider could then more easily send invoices to parents, manage its insurance policies, and establish a working line of credit to ease cash flow. As Taira Hall, senior vice president of embedded finance at FIS, puts it, that daycare facility would, in effect, become “a thriving financial services ecosystem.”
A NEW FRONTIER FOR BANKING
We were beginning to think that we’d never find funding, even though we knew our impact could be huge and important.
—Emily Kennedy, cofounder, Marinus Analytics
“We’re seeing new opportunities being created because banks and financial institutions are reaching customers when it’s most likely to resonate.”
— Cory Treffiletti, senior vice
president of marketing, FIS
LORES
Welcome to the era of the easy customer experience. These days, consumers expect any purchase they make—from online orders to in-store checkouts—to be smooth and fast. And in large part, retailers are happy to oblige. “Cleaner and more seamless experiences create more positive relationships with customers and engender more loyalty,” says Cory Treffiletti, senior vice president of marketing at fintech firm FIS.
While consumers have driven this trend, technology has enabled and accelerated it, helping to make transactions faster and even more streamlined. It’s moved from consumers and companies relying on integrated experiences—say, a retailer offering customers a range of payment options—to embedded experiences that are designed to make the process as frictionless as possible.
In an integrated experience, a retailer might offer a button to let customers use a payment service such as PayPal, which allows customers to avoid typing in their credit card details during every transaction. But the process required sending the consumer from a retailer’s shopping cart to secure check out page before being redirected back to the retailer.
Embedded experiences remove that clunky step by wrapping a financial services companies’ services tightly—and often invisibly—into the retailer’s online presence. Thanks to that digital partnership, consumers are able to make one-click payments to order lunch from the restaurant around the corner or a bespoke suit from a Parisian boutique. It’s fast, frictionless, and safe—and just what customers want. “There’s no distraction or interruption,” Treffiletti says.
Welcome to the era of the easy customer experience. These days, consumers expect any purchase they make—from online orders to in-store checkouts—to
—Taira Hall, senior vice president of embedded finance, FIS
“[For banks that understand] the market is evolving, there are opportunities to not just support your core retail business, but also to find new ways to grow and delight customers.”
—Cory Treffiletti, senior vice president of marketing, FIS
“We’re seeing new opportunities being created because banks and financial institutions are reaching customers when it’s most likely to resonate.”
“[For banks that under- stand] the market is evolving, there are opportunities to not just support your core retail business, but also to find new ways to grow and delight customers.”
—Taira Hall, senior vice president
of embedded finance, FIS
“We’re seeing new opportunities being created because banks and financial institutions are reaching customers when it’s most likely to resonate.”
— Cory Treffiletti, senior vice
president of marketing, FIS
BY FASTCO WORKS
By fastco works
