With embedded banking, retailers of any size can create a more compelling customer journey and put CX at the forefront.
The pandemic has been the great accelerator of existing digital trends, particularly the shift to eCommerce. With eCommerce the primary shopping method for many of us, customer expectations are also beginning to transform. Retailers are starting to understand that a frictionless, end-to-end customer experience (CX) is key to success; impacting retention, revenues and sales growth.
A growing part of building a compelling CX is providing embedded financial services, with an increasing number of major retailers offering their own banking products at the point of sale. Buy Now, Pay Later offerings and instant payments are swiftly becoming the norm in modern checkout journeys.
It is not enough for retailers to link to external, third-party providers. In order to compete, brands understand that they need to keep their customers within their ecosystem, leveraging user data to form better insights, which in turn, will lead to better product innovation. This is where modern Banking-as-a-Service (BaaS) providers like Vodeno come in; our API-based technology offers a comprehensive portfolio of banking products, and we combine this with access to a European banking licence and regulatory and compliance expertise.
How Open Banking can impact retail
The massive infrastructure cost and regulatory complexity in order to build financial products from the ground up have historically made it impossible for all but the largest corporations.
We believe everyone should have access to the best banking products, and our suite of API-based BaaS solutions makes it possible for non-financial companies to offer them to their customers. An important link between BaaS solutions and increased CX is Open Banking regulation, which makes the exchange of data and infrastructure between parties quicker and easier.
Retailers who open themselves up to Open Banking can increase their value proposition – research found that the new revenue potential generated through Open Banking-enabled SMEs totalled £500 million in 2018, with that figure forecast to reach £1.9 billion by 2024.
A central part of a retailer’s work is establishing a trusted relationship with its customer, and great CX is the northstar in building trust online. Google found that 73% of consumers say that a good experience is key in influencing their brand loyalties, so for retailers, spending the time and effort to improve their CX will be reflected in their brand perception, customer retention and repeat visits.
Retailers can even offer specialised rewards to users, like cashback on purchases – giving customers a sense of added value to the experience.
Embedded banking solutions
The process of embracing and integrating embedded banking solutions is becoming easier and more affordable, and the argument for doing so is becoming stronger by the day.
Our retail partners who have integrated embedded banking products into their ecosystem are positioned to improve their customer experience, and in turn, increase stickiness and drive more revenue. For our clients, once the solution is delivered, they can rely on us to ensure its smooth and fully compliant operation, scaling up effortlessly alongside their business.
Consumer expectations will continue to shift in the years to come, but our partners have no need to worry about keeping up. All they need to do is offer the best customer experience they can – and leave the embedded banking to us.