A loyal customer buys groceries through her favorite brand's rewards program powered by embedded banking.
Embedded Finance

Reimagining customer loyalty and retention with embedded banking

Reimagining customer loyalty and retention with embedded banking 

Throughout the digital revolution, companies wooed customers with online digital offerings and convenient mobile apps. Fintechs like E-Trade and TDAmeritrade sprang up and grabbed market share with digital financing and investing services that streamlined the customer experience. 

In return, customer loyalty and retention solidified for those companies embracing digital interactions. Traditional banks dismantled brick-and-mortar locations as online platforms, and API-powered banking apps became the new model for customer relationships. But that was then.

Today, there is a new, ”reimagined” consumer with changed values and habits. And, when it comes to customer satisfaction and brand loyalty, consumers expect even more from service and product providers.


Who is the “reimagined" consumer? 

A study by Accenture revealed a new group of consumers deemed the “Reimagined.” This reimagined consumer has already adapted to digital transformation and is irrevocably dependent on mobile devices and e-commerce platforms for daily living. Reimagined individuals have also weathered the COVID-19 pandemic, which changed their perspective on consumerism and the customer journey.

Accenture studied 25,000 consumers in 22 countries and discovered that 50 percent of those studied have changed their view of commerce, including what it will take for them to align with a company and stay loyal.

The reimagined are even more demanding when it comes to product and service providers. Where price and quality used to be the deciding factors behind purchase decisions, the reimagined now expect personalized services, customer support, sustainable products and methods, and safety and security. 

It’s worth looking at how these new consumer perspectives are changing how companies attract loyal customers and improve customer retention. One clear method: Embedded banking and financing tools. These are among the latest technology trends companies use to align with new consumer decision-making and increase customer loyalty and retention.


How embedded finance attends to the reimagined consumer

Simply put, embedded finance allows any business to offer financial services directly to their customers. Designed to provide streamlined services to the end-user, companies using embedded finance can offer a wealth of financial products to their customers. In doing so, enterprises engage customers at a more frequent and meaningful level, reward them, and encourage repeat business. 


Virtual accounts

Through embedded finance, enterprises can provide virtual accounts, allowing companies to offer their customers the ability to manage funds, earn interest, pay bills, or send and receive money at the places they do business. Shopify offers bank accounts to its members, and the rideshare company Lyft pays its drivers by placing funds directly into a debit card account. These bank accounts combine ease and convenience with tailored products to appeal to the reimagined customer. Imagine being able to provide employees with a virtual account for early wage access and other financial services. 


Online or in-app payment processing 

Online and in-app payments streamline real-time payments for customers. The Starbucks app means that the reimagined customer can order, pay, and pick up whatever fair-trade coffee is trending in one fell swoop as they rush to their next appointment.


Branded debit, credit, gift, and prepaid cards 

Branded card programs, such as Target’s Red Cards, allow existing customers to pay conveniently, earn rewards as they spend, and use the rewards in ways that suit them. Long understood as a powerful tool to boost customer loyalty and retention, branded cards with customer loyalty programs offer the service and individual care that reimagined consumers have come to expect.


Global transfers

International payment solutions allow global companies to move money across borders. Send and receive money worldwide, moving currency across 100+ countries. Benefit from FX and transaction fees. Instantly pay employees wherever they are in their local currency. These tools cut down on fees and time delays and free up cash flow for companies that would otherwise be caught stalled in lengthy traditional wire transfers.


Customer convenience = lower churn

Companies that use embedded finance reduce customer churn rates because consumers are engaged throughout the transaction lifecycle. In-app payments like those used by Uber customers make it easy to pay with digital wallets. 

Meanwhile, embedded insurance like that offered by Waymo means that customers can sign up for insurance at the same time that they make a purchase. International companies can pay their global workforce directly to bank accounts with international digital transfers at a lower cost.


Service and personalization

Companies that embrace embedded finance tools as part of a business growth strategy attend to new customer demand for service and tailored experiences. Branded cards and reward programs allow customers to cash in or save points, while customer data helps companies identify the services and incentives customers will want in the future.

By engaging their customer base in broader ways, companies can measure customer loyalty and learn more about customer expectations, preferences, habits, and trends.


Light footprint

Digital technology reduces the carbon footprint of companies because digital networks eliminate paperwork and physical travel. Many brands are choosing to educate consumers about their social responsibility agendas as part of their marketing strategy and to reduce customer churn. On Amazon, you can filter search results by “climate pledge friendly.” Spotify plants trees when users make online purchases and pay with the platform’s Shop Pay app.


Trust and reputation

Consumers are no longer unsure of the security of online and digital banking. Ninety percent of any age group considers online transactions secure. Artificial intelligence (AI) and machine-learning (ML) tools monitor patterns to ensure security across all offerings from a solution provider.

Across the Alviere platform, stringent fraud protocols and ML tools authenticate and protect personal data, while identifying and blocking fraudulent transactions. Alviere offers unmatched security and compliance and is a fully regulated, licensed financial institution, managing all compliance, security, legal, and risk mitigation, PCI & SOC I & II certified. 


Don’t disappoint the reimagined consumer

The bottom line is that embedded finance allows any enterprise to tick all the boxes for the reimagined consumer. It combines convenience, personalized service, social responsibility, and security, and trust. 

In fact, businesses that do not offer embedded banking and finance risk finding new markets and losing existing ones. Testimonials from 50 percent of reimagined consumers say that many companies disappointed them by not providing enough support and understanding of their needs.

Partner with Alviere and add embedded financing tools to your platform. You’ll meet consumers where they are with convenient, sustainable, secure solutions and boost your customer retention rates.

Written by Alviere