Using financial transactions as a driver for user engagement is a unique cross-functional approach, but one that is gaining more traction.

A CTO, A CMO and a CFO walk into a bar – but there is no punchline…

What might emerge from that interaction could be the idea of Embedded Finance Experience – an increasingly important concept for businesses today. 

Using financial transactions as a driver for user engagement is a unique cross-functional approach, but one that is gaining more traction. Consider how transactions are at the core of the Grab or Gojek customer experience.

Looking into the near future, we’re likely to see brands changing their approach to transactions from making them seamless, to using them as a proactive channel for customer engagements – like creating custom branded credit cards, wallets or other branded experiences.

To find out more about this cross-functional approach to customer engagement, DigiconAsia sought out some insights from Nigel Verdon, CEO & co-founder, RailsBank, an organization that is helping brands to build embedded finance experiences at a pace previously unimaginable.

Nigel Verdon, CEO & co-founder, RailsBank

How can financial transactions become a driver for customer and internal user engagement in an organization?

Verdon: The pairing of well-known and loved consumer brands and financial services has already started. Regional brands like Gojek have embedded the financial experience so deeply into their offering that it is hardly recognized as a transaction anymore. Rather than being a transactional encounter, the experience of taking a taxi is now just that; an embedded finance experience.

This sort of seamless integration gives customers a richer experience by building financial services into their brand journey, giving way to the new-economy customer demands of better and more seamless digital experiences.

Embedded finance experiences also empower brands to integrate next level financial capabilities while capturing the inherent bond between brands and their loyal customers, offering a ‘one-stop shop’ for their needs, and even tapping into a powerful fan economy surrounding a brand.

Why do you think embedded finance experience is taking off in Asia Pacific?

Verdon: The Asia Pacific region, particularly in South-east Asia, remains to be an agile market at the forefront of the digital revolution. Consumers are already highly plugged in and connected to digital experiences, and are willing to adapt and welcome technological change.

The prospect of minimizing friction within these digital financial experiences is an exciting proposition, both for consumers and organizations.

For the underbanked in South-east Asia, embedded finance experiences also offer the opportunity to access financial products and services in a simplistic and easy to access way, tied to well-known and trusted brands. This has the potential to bridge the gap and continue down the path to financial democratization.

This path, which was originally paved by non-traditional solutions such as neo-banks, has now grown to include brands that people are already familiar with and engage with on a daily basis.

How could embedded finance experience be effectively approached from a cross-functional perspective?

Verdon: To successfully serve a streamlined and successful embedded finance experience to customers, it must be a cross-functional effort within the business.

From marketing teams working to understand and then extrapolate customer needs and preferences, to tech teams providing the back-end functionality, and the finance function of a business serving inbound and outbound payments, the embedded finance experience is truly an amalgamation of various key business functions.

To generate an embedded finance experience, it is important to understand the value-add from these diverse internal stakeholders. This requires a high level of cross-function oversight to capture cultural nuances within the business to then create a unique solution that is representative of the brand and resonates with customers.

Please share some examples in Asia Pacific of how backend technology is driving frontend innovation.

Verdon: There are several existing examples in the Asia Pacific region of how backend embedded finance technology is driving frontend innovation. Consider regional online goods and services providers such as Grab.

By paying through the Grab app, you can book your food in advance, utilize the GrabPay wallet, and even earn rewards that can be redeemed in-app. The outcome? Happier customers who have a unique and innovative experience, driven by an embedded finance experience. And for Grab: more business, more repeat customers and more loyalty.

Consider this: consumers buy cars, not car loans. This simple demonstration of how we look at financial tools and who offers them shows that despite not realizing it, many of us already engage in embedded finance experiences on a daily basis. The merging of finance with traditional consumer services opens the door to a variety of innovative solutions that can be tweaked to become relevant regionally, locally, or even to very niche audiences.

As the potential of digital is truly realized in our day-to-day lives, there is an opportunity for brands to create entirely new consumer experiences and business models, which in turn can lead to more revenue streams, better margins and better customer retention.