Innovative banking services for new needs

Although we have been reading everywhere for several months, embedded finance is not a new concept in France. According to some reports, this concept has been gradually evolving over the last decade. This development can be explained by the demand (from customers familiar with digital technologies) for transparent e-commerce solutions, which encourages financial and non-financial players to make their services more efficient. In addition to customer expectations (which remain at the heart of this evolution), companies are increasingly aware of the potential for monetizing digital opportunities and the need to increase customer loyalty through a portfolio of competitive services.

Banking as a service: using the dynamism of the fintech sector in France

The market is hot and has high potential. Innovation in France, in particular, has been one of the main drivers of embedded finance in Europe. While the emergence of the fintech market has led to some dynamism in terms of funding and partnerships, the French ecosystem, however, has some features, such as a strong tendency for existing banks to acquire fintech players or Banking-as-a platforms. -Service. . This has helped to strengthen banking services as a service in France through the connection effect.

2021 will also be the year of all records for the fintech sector. According to an annual report published by France FinTech, the sector actually raised 2.72 billion euros. This is 174% more than in 2020. This figure significantly allowed France to rise to third place in the European market, behind the UK (8 billion) and Germany (3.5 billion). This growth is also observed at the human level: fifty new startups born in France in 2021 are a record. 2022 promises to be just as favorable for fintech in France, and growth is still expected.

Banking service as a service is both a response to the need for built-in financing and a real tool to offer the best possible customer experience and thus increase loyalty. This is a huge problem, and this urgent need for financial institutions to evolve digitally has allowed online banks and non-financial brands to compete, ensuring that they can also build their own customer fundamentals.

Go beyond payment and credit

In France, online banks have paved the way for a customer-centric approach in the financial services sector focused on valuable offerings. In this context, the use of new technologies and especially the integration of API has offered to offer an effective end-to-end experience. Although the implementation of this customer-centric approach began with payments (with payment or recently with lending initiatives such as the BNPL Buy Now Pay Later), the number of points of contact between customers and financial service providers (whether banks or not) increases.

A large number of points of contact usually brings additional income. This trend, noticeable in France, especially in the field of BaaS, is explained by the natural evolution of domestic financing in the direction of payment or borrowing services. In addition, given that built-in financing ensures customer loyalty, credit products and other high value-added services have significant potential and go beyond the so-called “classic” banking services.

Advantages of banking service as a service

The value of Banking-as-a-Service is that players who offer credit offers can reduce development time and receive regulatory support. Companies that are now evaluating their investment in embedded financing will soon see that banking as a service reinforces the importance of customer satisfaction and a customer-oriented approach.

Thus, embedded financing and banking as a service are important in France because they allow organizations to remain flexible and reliable and their products and services available to a wider customer base. Companies have the opportunity to become fintech technologists, and they will do so over time. The thing now is to know when each of them will take the course.