Here’s why crypto companies need to focus on embedded finance

A new study from DECTA highlighted the importance of embedded financial functions in today’s fintech world. With online shopping and digital payments becoming the norm, the study pointed to some of the key drivers for a seamless experience for customers.

Embedded Finance is a new type of software distribution that works with financial infrastructure providers to include financial services in the ecosystems of already existing products. The most common embedded finance offerings include banking, lending, insurance, payments and branded credit cards.

According to the study, fast payments and the availability of a chosen payment option are the most crucial elements for a satisfactory online shopping experience. The lack of a preferred payment option or friction during the checkout process is the main reason for a poor shopping experience, with nearly 49% of respondents saying they would likely stop shopping if they encountered these issues.

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Personalized offers proved to be one of the key features of embedded finance, a feature that is valued and can be improved by focusing on different demographics. For example, 54% of Americans preferred integrated add-ons such as financing and insurance. Generation X participants were most satisfied with personalized offers, while Gen-Z and Baby Boomer participants gave the offers they received a lower rating.

Loyalty rewards and frictionless and same-page payments were some other preferred built-in features that received approval from respondents.

While crypto companies are slowly trying to integrate built-in financial features, be it crypto-based credit cards or loans, the study can definitely provide insight into customer targeting and acquisition. Crypto companies have been exploring loyalty rewards in addition to helping mainstream firms incorporate these embedded financial services using blockchain.

The cryptocurrency ecosystem saw an influx of institutional investment pouring in during the recent bull market. Some of the biggest Fortune 500 companies and traditional hedge funds jumped on the crypto wave, giving a glimpse of mainstream crypto adoption.

However, there is still a long way to go with the main focus on making crypto a daily driver for retail users. The study around embedded finance can help crypto companies take a cue from the mainstream and implement it with crypto-connected products to offer a better customer experience.