Published by Jessica Weisman-Pitts
Posted on November 30, 2021
6 min readLast updated: January 28, 2026
Embedded finance offers convenience by integrating financial services into non-financial businesses, but poses challenges in customer service coordination.
By Rahul Kumar, director of industry strategy for financial services at Talkdesk.
Consumers increasingly are demanding a superior experience throughout their customer “journeys,” from shopping to purchase, financing to post-purchase support. This expectation cuts across all industries, including financial services.
In a recent global survey, 90% of financial services and insurance customer service pros agreed that client expectations are higher than they were a year ago, while 63% of clients agreed that a single poor customer experience would negatively impact their brand loyalty.
In response, banks and other financial services organizations are implementing new technologies and service models to better meet client expectations. One emerging model is embedded finance, where a non-financial business – a furniture store, a ride-sharing company, a fast-food restaurant, etc. – offers financial services to customers. These services can include loans, payment processing and insurance.
The value of embedded finance is that it provides consumers with a radically convenient experience by eliminating the need to apply for credit at a physical bank or through a bank’s website. Instead, credit can be obtained directly through the retailer. In the case of ride-sharing companies like Uber and Lyft, or chains like Starbucks, embedded finance allows customers to pay through an app rather than resorting to cash or a credit card. Convenience is going to be key to offer clients an experience that is deeply integrated into their day to day lives!
Pay later is another embedded finance concept becoming popular in the marketplace. Buy now pay later (BNPL) apps enable users to instantly buy what they want – both big-ticket items and smaller purchases – and then pay for the goods or services over time via installments. Affirm, Afterpay (recently acquired by Square) and Klarna are among the growing list of companies that offer BNPL services.
Beyond providing more convenience to customers in the moment, embedded finance is a powerful tool for gaining insights into consumers’ spending habits and needs. Over the long term, analytics can be applied to this data to drive hyper-personalization in the client experience to make interactions much more contextual.
While embedded finance isn’t new – car dealerships have offered financing to customers for decades – its adoption is growing rapidly. A forecast by Juniper Research estimates the value of the embedded finance market will exceed $138 billion in 2026, more than tripling the $43 billion in 2021.
Embedded finance’s customer experience conundrum
Unfortunately, the convenience of embedded finance quickly can dissolve into client dissatisfaction if partnering companies lack the ability to coordinate customer service. To demonstrate this challenge, let’s discuss a real-life example. Shopify is a well-known e-commerce platform that has gained a lot of traction over the past couple of years by partnering with Stripe, a financial tech company (fintech) that offers treasury management and cash management capabilities on the commercial banking side. Sitting underneath Stripe is Goldman Sachs, whose treasury management and cash management platform is connected to the fintech. Stripe, in turn, provides vendors access to the Shopify platform as a marketplace to sell their products.
Now let’s say a Shopify vendor’s treasury management capabilities aren’t working properly and the vendor needs the problem to be addressed immediately. Whom does the vendor call? Sure, it could call Shopify, but Shopify is an e-commerce platform that probably won’t be able to help the vendor solve its treasury management problem. The vendor also could call Stripe. As with Shopify, Stripe likely can offer little help to the vendor because it’s basically acting as a conduit for services, rather than the originator.
That leaves Goldman Sachs, a huge multinational bank that doesn’t deal with small e-commerce vendors directly! It’s highly likely the vendor will get bounced around Goldman’s client service department before concluding that no one is going to fix its problem.
The challenges with these connected ecosystems are determining who owns the client experience and creating a way to make that experience cohesive while quickly resolving the client’s problem. These challenges will become even more difficult as embedded financial services proliferate and scale. And that’s happening now!
What’s needed is an open and scalable client experience platform with artificial intelligence (AI) capabilities embedded in these multi-partner ecosystems to ensure clients can quickly and conveniently find the information or solutions they need through the channel of their choice. Thus, clients who prefer texting their bank for information and support rather than calling should have the option to text.
Bank clients, particularly longtime ones, have an expectation that their financial institution knows their preferences and needs and addresses them proactively. Many, however, are frustrated because they feel their bank is always trying to sell them something rather than act as an advisor looking out for their financial well-being. An AI-powered contact center would allow banks to collect valuable data from client interactions, enabling them to proactively offer personalized products and services to customers based on analytics.
AI also enables banks to identify and address a service problem before it escalates. To return to the Shopify example, if 50 different vendors on that platform start complaining about the same thing, an AI-driven contact center could proactively alert Goldman Sachs or Stripe. This would allow support agents to proactively reach out to all affected vendors to resolve their issues.
With complexity comes opportunity
A cloud-native, AI-powered and scalable platform can help banks dramatically enhance the client experience and extend it beyond their traditional product and services interactions. For example, mortgages remain one of the primary lending products for banks given the ever- increasing demand for home purchase. A sophisticated platform can facilitate an end-to-end home ownership experience. If you are a mortgage customer, a bank may connect you to the best contractors in your area who can help you with home improvements. If you’re looking to sell a home, the institution can connect you to real estate agents who can get you the best value for your home.
In addition to AI capabilities, flexibility and scalability, a bank contact center should be purpose-built for financial services. It is absolutely critical in a highly regulated industry such as banking that client interactions are secure and meet compliance requirements.
Banks see value in not only being a supplier of products and services, but also in acting as an adviser and partner that will support financial well-being, which will delight clients and increase brand loyalty. That’s the role banks want to play today. A modern, scalable, intelligent client experience platform is how they can make that happen.
The main topic is embedded finance and its impact on business opportunities and customer experience in the banking sector.
Embedded finance refers to integrating financial services into non-financial businesses, enhancing convenience for consumers.
The main challenge is ensuring seamless customer service coordination among partnering companies.
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