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A financial institution equipped with embedded banking will emerge as a game-changer in future years for its customers.
FREMONT, CA: Banks have always been comfortable taking ownership of maintaining customer relations. And growing digitalization and the emergence of fintech firms and neo-banks has further pushed them to elevate customer service standards. But, is this the end of the story? Well, not really! The core businesses of financial institutions are going to face the next level challenge. As customers are demanding services to be made available with different points of sale, devices, and service providers, the bankers are eyeing embedded banking.
Considering banks to be an integral part of the working capital management and placing them at the heart of the business ecosystem now gets the name embedded banking. Participants in embedded banking include industrial companies, end customers, suppliers, banks, and other financial service providers. In this embedded banking setup, the financial institution offers a platform to connect the several trading partners and is a vital player in the ecosystem. This leads to a banking service being provided as a Software-as-a-Service. With this, pay-per-usage, subscriptions, renewals have become associated with banking services. This influences the rising customer demand for such a flexible approach to payments and other banking services.
The boundary between technology providers and traditional banks is fading day by day. Banking is expected to be free-flowing into various avenues to reach customers, rather than being tightly managed within the conventional purview. Hence, the demand for innovation in banking is never going to end. To tackle the set of challenges that arise from embedded banking rollout, banks need to relook into the pricing and fees, assess market adoption, and finally strike a balance between profitability and customer retention.
Customers today are ever demanding, and banks need to realize the pulse and be ready to meet their needs. It is sure that embedded banking can take banking experience to a different level and amaze customers.