A new study by DECTA highlighted the importance of embedded finance features in today’s fintech world. With online shopping and digital payments becoming a norm, the study pointed towards some of the key drivers for a seamless experience for customers.
Embedded finance is a new type of software distribution that works with financial infrastructure providers to include financial services in the ecosystems of already-existing products. The most common embedded finance offerings include banking, lending, insurance, payments and branded credit cards.
According to the study, quick payments and the availability of a selected payment option are the most crucial elements for a satisfying online buying experience. The lack of a preferred payment option or friction during the checkout process is the main reason for a bad shopping experience, with nearly 49% of respondents stating they would probably stop shopping if they ran into these issues.
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Personalized offers came out to be one of the key features in embedded finance, a feature that is valued and can be enhanced by focusing on different demographics. For example, 54% of Americans preferred integrated add-ons like financing and insurance. Generation X participants were most satisfied with personal offers, while Gen-Z and Baby Boomer participants gave the offers they got a lower rating.
Loyalty rewards and frictionless payments and same-page checkouts were some other preferred embedded features that got the approval of the respondents.
While crypto companies are slowly trying to integrate embedded finance features be it crypto-based credit cards or loans, the study can definitely offer insights into customer targeting and acquisition. Crypto companies have been exploring loyalty rewards as well as helping mainstream firms to incorporate these embedded finance services using blockchain.
The cryptocurrency ecosystem saw an influx of institutional investment flowing in during the last bull market. Some of the biggest Fortune 500 companies and traditional hedge funds jumped on the crypto bandwagon, giving a glimpse of mainstream crypto adoption.
However, there is still a long way to go with the main focus on making crypto a daily driver for retail users. The study around embedded finance could help crypto companies take a cue from mainstream and implement it with crypto-linked products to offer a better customer experience.
Source: https://cointelegraph.com/news/here-s-why-crypto-companies-need-to-focus-on-embedded-finance
