Learn how embedded finance can power the next wave of loyalty in digital banking. To unlock the embedded opportunity, financial institutions
Embedded finance isn’t just about convenience, it’s reshaping how consumers experience financial services. From instant credit at checkout to savings tools built into everyday platforms, these seamless interactions are quietly building stronger bonds between brands and their users.
Embedded services offer a strategic advantage for financial institutions by influencing instant purchasing decisions. For example, Buy Now, Pay Later (BNPL) solutions have been shown to increase checkout conversion rates by 20% to 30%, according to RBC Capital Markets.
For banks and credit unions, this presents a unique opportunity to leverage embedded finance not just as a revenue stream but as a retention strategy. A survey of over 3,000 Europeans indicates that 37% of consumers are more inclined to "actively seek out" brands providing BNPL options.
As digital banking evolves, embedded finance is emerging as the next frontier, a key enabler of hyper-personalized experiences that anticipate user needs, deepen engagement, and foster long-term customer loyalty.
Through Embedded finance, financial institutions can expand their reach, remain relevant in customers’ daily lives, and differentiate their offerings in an increasingly competitive market.
At its core, embedded finance refers to the seamless integration of financial services — such as payments, lending, insurance, or even full banking capabilities — into non-financial platforms.
This shift allows banks to distribute their services beyond traditional channels and directly into the ecosystems where customers are already active: shopping, commuting, managing businesses, or accessing services online.
Today, a range of services demonstrate the wide array of applications. From Shopify’s embedded banking feature, Shopify Balance, to “buy now, pay later” (BNPL) options at online checkouts.
By separating core banking functions, embedded finance allows for more specialized service offerings. This modularization encourages partnerships and drives competition, ultimately reducing costs for consumers while expanding their options.
Through a flexible integration model, embedded finance enables financial institutions and platforms to choose their level of involvement based on strategic priorities and operational capacity. The selected model determines the degree of control over the service and the associated risk profile, allowing institutions to tailor their approach to embedded finance to best suit their needs.
Embedded finance as a retention strategy
Embedded Finance can help financial institutions improve customer satisfaction at every stage of their journey.
From onboarding to everyday transactions, embedded finance allows banks to be present at critical moments, offering timely, relevant services without adding friction to the user experience.
For example, enabling in-app financing options, instant payments, or tailored insurance within a partner platform can significantly increase user satisfaction and loyalty.
These integrated touchpoints reduce the need for customers to seek external solutions, keeping them within the institution’s ecosystem.
As convenience and personalization continue to drive customer expectations, embedded finance becomes a key differentiator, ensuring financial institutions stay relevant and top-of-mind throughout the customer lifecycle.
Embedded finance in action: use cases driving innovation
Here are some use cases that illustrate how beneficial embedded finance can be for the end-user as well for financial institutions.
Shopify Balance provides e-commerce sellers with a business banking solution directly on the Shopify platform.
It offers digital banking services, including virtual cards, payment processing, and cash flow management tools, all tailored to small business needs.
Sellers can access services without needing to engage with banks through traditional channels to access funds and manage finances seamlessly inside a platform they already use for business operations.
Embedded lending offers small businesses quick access to credit directly from platforms they already use on a day-to-day basis, such as payment processors, based on their transaction history and revenue.
Square and PayPal’s Working Capital programs offer microloans based on transaction history with these payment processors. Small businesses can access loans quickly based on their sales, repaying them as a percentage of future sales.
This model democratizes lending for small businesses struggling to secure traditional financing. As part of the embedded finance ecosystem, embedded lending empowers small businesses to access the capital they need quickly, enhancing cash flow and supporting growth while reducing friction in the borrowing process.
Applecare was an early pioneer in this segment, but new companies like Cover Genius and Bolt offer embedded insurance at the point of sale for items ranging from consumer electronics to travel.
By offering insurance inside payment journeys, consumers gain access to a seamless way to purchase protection for products or services at checkout, enhancing peace of mind with a single click.
Shoppers can buy insurance with a single click at checkout, adding convenience. As insurance decisions are simplified, retailers benefit from extra revenue streams and greater customer satisfaction.
To explore additional examples of embedded finance in action, download the full report and discover how you can implement similar strategies.
Learn how embedded finance can power the next wave of loyalty in digital banking
To unlock the embedded opportunity, financial institutions need to make an important choice and select a platform partner to power the services incorporated into their own products.
The opportunity is not only vast, but relatively straightforward to access. By partnering with an experienced provider, businesses can leverage tools quickly and begin offering financial services at a speed that was once impossible.
ebankIT is a flexible, omnichannel digital banking platform built to integrate smoothly with any core system. It creates a rich, interactive digital experience that empowers financial institutions to secure a future-ready strategy. Customers can enjoy a seamless and engaging experience at every stage and touchpoint.
We can help you take the next step on your embedded journey and build humanized services that win customers’ loyalty, wherever and wherever they are.