Treasury Prime CFO Says Tough Times Reveal Embedded Finance Benefits

In today’s challenging macroclimate, embedded finance solutions are critical to meeting evolving customer preferences. 

And in today’s macro environment, where maintaining and expanding every customer relationship is increasingly important, meeting customer preferences is critical to business growth and survival.

That’s according to Meghan Ryan, CFO at API banking technology company Treasury Prime, who told PYMNTS in a recent discussion that she sees “a lot of focus” around customer engagement and stickiness as the economy turns south, underscoring that embedded banking solutions provide a critical value-add for enterprises looking to both acquire the right customers, as well as expand their relationships with them.

“We’re seeing a lot of needs around flexibility…how do enterprises meet customers closest to their individual point of need, and how can they do so in a way that increases engagement within their apps and within their platforms overall while adding continual value to those customers,” Ryan says. 

The answer to those needs, she noted, increasingly lies with embedded finance tools. 

PYMNTS’ own research shows that those businesses tapping embedded solutions are well-positioned relative to competition to deliver the personalized, digital-first offerings their customers have come to expect.

Consumer Expectations Drive Digital Transformation While Accelerating Awareness

“The big theme around this,” Ryan said, “is how do you reduce the friction in the customer engagement process? The more we can automate, the more we can reduce friction in the customer journey, and the happier customers are.”

As customer expectations evolve in step with modern technologies and digital solutions, demand for embedded solutions and seamless personalization across touchpoints will only accelerate alongside that demand. 

 “When we think about embedded products, the first one that comes to mind is always KYC [know your customer], KYB [know your business], as well as account opening,” Ryan said. “We’ve seen a lot of investment in terms of automating those processes so that we are able to bring on customers in a seamless way, letting them open accounts in minutes or even seconds versus what historically may have been days.”

After all, customer demand is historically one of the key engines driving targeted and transformational digital capabilities.

“Awareness [of embedded solutions] has increased significantly,” Ryan said, adding that she sees it as a positive signal for the ecosystem. 

“I think the next step is how to turn that awareness into engagement, and the real value proposition here comes down to are you serving customers’ needs at the point where they need it? We talk a lot about making sure the financial product is there when the person is ready to transact. As soon as a customer needs to exit an app or close out of a platform to transact, that’s where a lot more friction enters the process and customers start to drop off,” Ryan said. 

Industry observers predict that demand for personalized instant banking and payments solutions will only accelerate as digital adoption, economic uncertainties, and credit usage drive consumer preferences. 

Many enterprises want to offer or are leaning into, embedded solutions because they help them expand their reach in terms of the customers they can attract, which therefore helps grow their deposit base, Ryan said, adding that she thinks there’s a massive shift in the market to invest in these automated tools so that enterprises can capture business, but in a way that is cost-effective and efficient.

“These tools are making it more cost-effective to engage with a broader customer set,” Ryan said. “The more businesses can automate, the easier it is for them to offer services to smaller customers — they don’t have to focus on large customers from an investment perspective if they are able to serve those smaller customers efficiently through tools and automation that support that.”

That notion of expansion, stickiness and ongoing value-add engagements is where embedded solutions can be successively activated to provide a lot of value, she added. 

Digital-First Means Data-Dependent

A big piece of this centers around the data organizations acquire by providing more services to their customers and understanding the pain points being solved, she said. 

“When organizations start offering some of these embedded services, they see where those customers engage, how it may increase the transaction value, and it helps them narrow in on two things — how to market their product to new customers, and how to engage further with those customers so they’re able to continue to provide value and increase stickiness,” Ryan said. 

PYMNTS has previously written about how financial institutions today face a fork in the road: deliver data-driven and connected experiences or risk falling behind.

“I think it all comes down to the data available,” Ryan said. “For example, fraud defenses are most productive when you have the most information to identify the fraudsters. So when we think about the different types of platforms that are using embedded finance solutions, they have many different data points around the customers they’re engaging with — and the more they can leverage those data points, the greater information they have to determine the right next step.”

She adds that artificial intelligence (AI) will help banks by providing more data and information, but it will take time for organizations to adopt these next-generation tools. 

“I think they’re going to do it [adopt new tools] in a very thoughtful way that will require a lot of testing and side-by-side analysis to understand the impact and ensure that they aren’t losing sight of the overarching goal that they have,” Ryan said. 

As for what she is most excited about looking forward?

Ryan said it’s continuing to help enterprises realize real value as they engage in the embedded finance space and continue “peeling back the onion” of existing opportunity.