There’s been no shortage of buzzwords to describe the evolving financial services landscape. As traditional banks and lenders become increasingly digital, coupled with the emergence of fintechs and other challengers in the space, the competition and creativity involved in acquiring new customers continues to intensify.

For personal finance, that’s meant targeting consumers outside of conventional channels, while optimizing both their user experience and financial outcome. What has resulted is an industry embracing practices once shunned as interloping — banks supplying account info to fintechs (open banking), fintechs integrating traditional banking services onto their platforms (banking as a service), and so on.

However, the expanding reach of personal finance goes beyond incumbents commingling with newcomers. It has become imperative for financial service providers to extend that reach beyond the boundaries of the space, through the use of embedded finance.

What is Embedded Finance?

In simple terms, embedded finance involves integrating financial services into the digital platforms of companies looking to add financial products to their business, whether it be a website or mobile app. The type of companies that utilize embedded finance can range from retailers, to car manufacturers, to insurtechs, to credit score companies, to lifestyle publications — as long as they see value in adding financial services to their brand.

Some of the most familiar examples of embedded finance are apps like Seamless and Uber, which allow users to access payment services within the same interface. The process streamlines the user experience, with no need for a third-party host. However, embedded finance is now growing rapidly beyond payments and into broader financial services like lending, credit cards, savings, and even insurance.

The benefits are aligned for all parties involved: financial institutions can tie their products to popular brands and increase conversions, the companies embedding the services can monetize from a new revenue stream, and consumers gain wider access to different products, and at opportune times. For example, a consumer on a travel website may be incentivized by a native placement for a miles-earning credit card.

While embedded finance helps companies help consumers, there are major challenges that exist. It’s not as simple as integrating a product onto your website or app, as there are several hurdles to consider in making the venture a worthwhile addition to your business. These can include:

• Managing multiple financial providers: Hundreds of potential relationships with varying tech capabilities and disparate strategic objectives
• Personalizing the experience for users: Millions of data points to consider, as well as varying consumer profiles and expectations
• Handling of Personal Identifiable Information (PII): Establishing consent and record retention, security protocols (e.g., Know Your Customer)
• Compliance and licensing requirements: Adhering to regulatory laws across all 50 states, varying rules per state and financial service

As you can see, there is a high degree of complexity with regard to partnerships, tech, security, and compliance. If a company only partners with one financial provider to integrate their services, with no added layer of personalization, what does that really offer the consumer? Is it enough of a differentiator?

Embedded Finance Marketplaces by Even

The Even solution to this in-demand industry model is our Embedded Finance Marketplaces. Through our turnkey offerings, any business can add a financial marketplace to their site or app that is fully compliant, configurable, and driven by impactful data. Instead of incorporating just one financial services provider or product, access to our network allows businesses to integrate a full suite of financial product offers from the largest network of connected top providers.

With Even’s Embedded Finance Marketplaces, companies can customize a user experience with personalized financial product offers backed by data-enriched machine learning, allowing consumers to get matched with products that address their needs at the right time. Furthermore, Even shoulders the burden of infrastructure, security, and compliance through a seamless open API, which can accommodate any business’s software stack.

As a result, a company that does not offer financial services can do so without having to create any new products or upend their current business model. For example, if someone reading an article on a news site about “consolidating their debt” notices a native marketplace for personal loans on the web page, they can enter some PII and get pre-approved or prequalified offers with rates and terms suited to their needs and creditworthiness.

Embedded finance, however, isn’t just limited to companies that don’t offer financial products. In the case of MoneyLion, an Even partner, integrating an Embedded Finance Marketplace has allowed the mobile banking app to add cross-selling opportunities to its customers, via offers for financial services not available in MoneyLion’s current suite of products.

Companies integrating our Embedded Finance Marketplaces are able to monetize through different cost structures in addition to enhancing consumer engagement, retention, and lifetime value (LTV), by adding a new layer to their offering in financial services. For financial services providers, they are able to source new leads in a more efficient manner by maximizing better customer conversions and lowering delinquencies, which also leads to increased LTV.

All in all, the world of embedded finance will continue to grow. By getting ahead of the curve, Even has established a model that helps all parties involved: the companies embedding the tech, financial institutions, and consumers.