If you’re looking for new avenues for boosting customer engagement and loyalty, or delivering new revenue streams, you’ve likely explored the world of embedded finance. 

However, with a broad range of options, from co-branded cards and current accounts to loans and insurance, assessing the services that work for your brand and make sense for your customers can be challenging. Once you have clarity on what you’d like to deliver, the complexity of turning that vision into reality follows. 

Let’s explore the practical ways to identify opportunities to implement embedded accounts that can support enhanced customer loyalty and benefit your brand and customers. 

Before we look at the details, here’s a quick recap of what embedded finance means. 

Broadly, the term refers to integrating financial services within nonfinancial platforms. As a result, it enables nonfinancial businesses to offer banking, lending, payments, or insurance services directly within their digital ecosystems. This eliminates the need for customers to engage with external financial services third parties, creating a more seamless and efficient experience.  

According to McKinsey forecasts, the delivery of financial services by nonfinancial entities in Europe could surpass €100 billion by the end of the decade. You can read more about the types of embedded finance here.   

• Increase lifetime customer value:  By offering targeted financial services, companies reduce churn rates and build longer, more valuable relationships. When brands meet customers’ financial needs in-platform, they can also derive revenue from those services.
• Enhance brand engagement: By creating a frictionless, integrated experience that meets multiple needs, such as payments, loans, and insurance, within a single platform or ecosystem. This delivers greater convenience, reducing the need for customers to seek out alternative providers and making these services contextually relevant, keeping customers interacting with the brand more frequently.
• Support greater customer loyalty: Moving beyond basic loyalty schemes to experiences that resonate with your customers’ needs and preferences. That includes personalised financial solutions and the convenience of accessing tailored offerings. Increasingly, brands may create closed-loop environments, incentivising customers to hold funds and spend in-platform to deepen engagement.
• Broaden behavioural insights: By generating rich data on spending and engagement patterns, you can use data-driven insights to deliver greater personalisation, engage earlier, and identify at-risk customers for tailored retention strategies.
• Boost brand trust: Integrating financial services within a familiar platform your customers know and rely on can make them feel more secure and confident in their transactions, leading to stronger brand loyalty and repeat business.  

Imagine you had a savings or current account with an automotive brand. It can see you have funds and, as a result, offer you a bigger discount or approve a competitively priced loan in minutes. Without ever leaving the website or app, you could also purchase car insurance and manage any claims within that app. This last scenario is already a reality in the US with Tesla.  

But where could brands begin to see these benefits?

If someone offered you a way to have hundreds more touchpoints with your customers, and for them to experience your brand many times than they do today, you’d want to know how that’s possible. The answer may also surprise you: An embedded account delivered in partnership with a regulated bank.  

Moving to an already crowded market might seem counterintuitive advice. However, embedded accounts offer brands numerous customer touchpoints.  

Consider UK consumers’ average daily engagement with banking and finance apps, according to research by YouGov, on behalf of HSBC. Over eight in ten people (83%) check their banking or finance app weekly, with 38% checking their apps at least once daily. 25-34-year-olds show the most significant financial oversight, with 46% checking a banking or finance app at least once daily, compared to 36% of 18–24-year-olds.  

Accounts can hold a wealth of customer information, including how much they earn, what they buy and when, and regular outgoings such as direct debits for mortgages and utilities. A brand can derive rich information through AI and open banking-based tools, transforming transactions into actionable insight.  

Embedded accounts offer opportunities to deliver high-impact digital engagement features that drive deposits, whether in a current or savings account. Crucially, the insights brands derive can, where appropriate, be used to deliver tailored advice and support, helping customers manage their money more confidently and supporting improved financial well-being.  

Some brands may feel that building a customer base through an account product is too far removed from their core offering. And, in some cases, they could be right. This isn't about embedding accounts for its own sake but delivering a value-added proposition your customers will want and use.  

However, as you examine how to evolve your digital experiences for their core business, embedded accounts could be highly complementary and should be seriously considered. 

Finding a trusted partner who can provide the quality of service you require and meet your customers’ expectations is critical. But what should you look for in a potential partner for embedded accounts?  

Some criteria to consider include:  

• Payment performance: Your customers will expect real-time payments. You need to consider payment connectivity, the technical aspects of how a provider accesses the payment schemes, and their uptime. For example, while a scheme may run 24/7 365, a provider may not offer the same availability. You should also examine how your partner performs and communicates any updates and monitors payment performance.
• Deposit protection and regulatory status: Many ‘bank-like’ services can offer accounts and digital wallets to store funds due to the significant growth in the number and use of electronic money institutions (EMIs). However, this requires a thorough examination of where they hold customer funds as they use an underlying partner bank, the protections in place, and who, if anyone, offers deposit protection such as the Financial Services Compensation Scheme (FSCS).
• Stability and security: Your service provider should continually test, debug, and maintain its services to give you peace of mind that you can offer your customers a great payment experience. Providers should also embed information security in everyday business processes to ensure data is handled securely.
• Client service and support: Your embedded accounts must operate efficiently, and your business must receive actionable analysis to optimise your customers’ experience. However, things can go wrong. If they do, your provider needs reactive and proactive support to help solve any issues. When assessing any potential provider, you should review its client relationship and support team.
• Expertise and track record: There are a few ways to understand whether your provider can provide the embedded accounts experience you need, including reference clients and case studies. A final aspect is a partner's stability and longevity. Can you be sure your provider has sufficient funding to operate and support your business for years? For example, do they have the long-term financial stability to invest in their products, services and client support?  

Embedded banking is a core element of the broader embedded finance movement, focusing specifically on integrating traditional banking services into everyday applications and platforms. 

ClearBank’s Embedded Banking proposition evolves the Banking as a Service (BaaS) model. While BaaS provides the basic infrastructure, embedded banking goes further, focusing on the contextual delivery of banking services and weaving them into a brand's experiences. That includes embedded accounts, both current accounts and savings accounts and embedded payments.  

By building on top of ClearBank’s proven infrastructure, you can deliver compliant services and the associated features, such as FSCS protection on eligible deposits, without incurring the substantial cost of applying for a bank licence. You don’t need to compromise the quality of your services by partnering with non-bank accounts and payments providers.  

You also control the brand experience, managing the customer-facing aspects and ensuring a consistent user experience. However, every ClearBank partner must adhere to our minimum standards and cooperate with the bank’s oversight requirements on an ongoing basis. That ensures the robust governance and ownership expected of a bank, combined with the agility of launching new services in the BaaS model. 

While many providers say they offer embedded services, ClearBank’s embedded accounts are proven to deliver significant return on investment (ROI) to our partners.  

Leading consultancy firm Forrester and its Total Economic Impact (TEI) model considered the various factors contributing to an ROI. TEI studies factor in due diligence, independent customer interviews, primary research, and a financial model framework that includes benefits, costs, flexibility, and risks. 

The ClearBank results include delivering millions in new profits and an ROI in just 10 months, reducing brands’ cost to serve and improving customer retention.  

You can read Forrester’s in-depth analysis here.