The secret sauce of non-financial companies: embedding financial services

Jovi Overo of Unlimit highlights the need for businesses to adapt to evolving customer needs, prompting non-financial companies to integrate financial services as value creators and new revenue sources.

In the golden age of business, a company's success was often defined by its ability to provide a single product or service better than anyone else. But today, we live in a world where businesses must become chameleons, constantly adapting and evolving to cater to the ever-changing needs of their customers. It's no wonder that non-financial companies are now embracing the power of embedding financial services into their offerings.

And it's not just about adding bells and whistles; it's about creating value for customers and unlocking unprecedented revenue streams. Picture this: you're running a successful ecommerce platform, and your customers are happily filling their virtual shopping carts. But what if, right there at the checkout, you could offer them a seamless, integrated financing solution? Or better yet, what if your platform could provide a full suite of financial services that empowers your users to manage their finances, grow their wealth, and make transactions easier than ever before? Now, that's a game-changer.

Enter the world of Banking-as-a-Service (BaaS). It's the secret sauce that's turning heads in the world of business and propelling companies to new heights. So, why are non-financial companies flocking to BaaS like moths to a flame? The answer lies in three primary motivations: creating customer value, driving loyalty, and tapping into new revenue streams.

The secret to success in business is simple: keep your customers happy. And what better way to do that than by making their lives easier? By embedding financial services into your offering, you're giving your customers the convenience they crave. It's like a one-stop shop for their financial needs, and they'll thank you for it. Take, for instance, the ride-hailing industry. Imagine if riders could not only book a ride through their favourite app but also use it to pay for their trip, tip their driver, and even access financing for car ownership. By offering these financial services, ride-hailing platforms are not only enhancing the customer experience but also creating new growth opportunities.

Customer loyalty is the lifeblood of any business. And when you embed financial services into your offering, you're building a relationship with your customers that goes beyond the transactional. By making your platform the go-to place for their financial needs, you're fostering a sense of trust and loyalty that will keep them coming back for more. Let's look at the telecom industry. By offering a range of financial services – from mobile wallets to loans – telecom providers are turning their customers into lifelong fans who wouldn't dream of switching to a competitor. It's not just about the phone service anymore; it's about providing an entire ecosystem that caters to their every need.

If there's one thing that's sweeter than customer loyalty, it's the sweet smell of new revenue streams. By embedding financial services into your offering, you're opening the door to untapped opportunities for growth. From transaction fees to interest income, the possibilities are endless – and they're just waiting for you to seize them. Imagine, for a moment, a travel booking platform. By weaving in financial services like tailored travel insurance, currency exchange, and credit card options designed for jet-setters, the platform can delve into lucrative markets extending far beyond simple hotel or flight reservations. These supplementary services not only generate additional revenue streams but also enhance the user experience.

Now, picture an online marketplace that links freelance professionals to clients. By incorporating financial services such as invoicing, payment processing, and even small business loans, the platform can profit from each transaction and financial service offered. Freelancers benefit from streamlined financial management, and clients relish the seamless, all-encompassing nature of the platform. As a result, the marketplace solidifies its position as an indispensable ally for both sides.

The allure of embedding financial services is that it not only broadens your company's influence in the market but also fosters innovation and cooperation. By collaborating with fintech firms and financial institutions, non-financial companies can harness their distinct strengths and resources to craft state-of-the-art products and services that cater to the dynamic needs of their customers. These strategic partnerships can give rise to industry-shaping innovations that reveal new avenues for expansion.

In essence, integrating financial services into your offerings is like sowing a seed with the potential to blossom into a splendid, revenue-generating tree. By nurturing this seed with the appropriate partnerships, technology, and foresight, your company can unlock a world of untapped possibilities and lay the groundwork for unrivalled success.

Now, I know what you're thinking. You're not a financial expert, and you're worried about the complexities of diving into the world of banking. But fear not, my friend, because BaaS providers like Unlimit have got your back. With our cutting-edge technology and expertise, we can guide you through the murky waters and help you transform your business into a financial powerhouse. We keep it simple, but significant. And, in a world where embedding financial services can transform a business from ordinary to extraordinary, the story you create will be nothing short of legendary.

This article was first published in The Paypers' Embedded Finance and Banking-as-a-Service Report 2023, which is the latest comprehensive market overview and analysis focusing on the key products and players within the Embedded Finance and BaaS ecosystem. 

About Jovi Overo

Jovi Overo has over 20 years of experience across Fintech, Payments, Banking and Lending-as-a-Service space. Currently, Overo is responsible for creating solutions from scratch and building them from the ground up for the new BaaS division at Unlimit.

About Unlimit

Founded in 2009, Unlimit is a global fintech company that offers a large portfolio of financial services, including payment processing, banking as a service (BaaS), and an on ramp fiat solution for crypto, DeFi, and GameFi.