Embedded finance - richer finance experiences for moviegoers
APAC marketing manager Darren Thang goes to movies and shows how embedded finance is set to be a star.
A much anticipated blockbuster is about to hit the cinemas, moviegoers await with bated breath to get their hands on cinema tickets that will allow them to experience a director’s vision in its truest form and to the fullest extent.
There are arguments that with the influx of streaming services, cinemas will become obsolete - I beg to differ. Watching a movie in a cinema will always be relevant, because of the choice to surrender oneself for the entire movie which amplifies the experience significantly. Additionally, fellow moviegoers will share one's emotions which contributes to the social experience in totality.
Many cinemas actually spend a lot of money investing in state of the art cinemas, consisting of the best screens, surround sound systems, the most comfortable seats and uch more. Granted, getting these right are very important, the customer journey of a movie goer is actually much more holistic and not just confined to the premise of a movie theatre.
While we have certain preferences for cinemas, ultimately choosing which cinema to go boils down on many critical factors. For example, movie timings to suit our schedule, the add-ons such as the availability of good food and beverages, subscribing to text notifications as a form of reminder and the ease of payment. As there are many movie operators around, technological solutions such as “marketplace-styled” mobile apps are built to allow moviegoers to view all available time slots by different movie operators.
This also means that movie operators are increasingly not getting access to the first touchpoints of moviegoers, which will result in missing out on critical data collection and for analysis. How do they solve that? Most of them try to introduce loyalty programmes, providing discounts for movie ticket bundles and add-ons for their members. While the approach is sound, the actual customer journey is not that straightforward.
The success of such loyalty programmes depends on how seamless it is to be recognised as a member and it is also made complicated by the many choices a moviegoer can have when it comes to movie operators. For example, if a movie operator requires a moviegoer to flash a physical card to show proof of membership, then that programme is destined for failure, especially as we approach a walletless age.
The answer to this phenomenon is simple - embedded finance. As technology advances, nonbank traditional firms, such as movie operators, are poised to enter strategic partnerships with companies such as Railsbank, to provide richer finance experiences for their customers. As more people are becoming used to the idea of making payments digitally, the ease of payment becomes paramount. Loyalty programs that are built upon embedded finance would have a much higher rate of success, as compared to the current status, that is being ad-hoc and disjointed. If embedded finance is in place, movie operators will be in a very advantageous position as they can now have first hand access to important customers’ data and make key business decisions with insights derived from these data. So how does it all work? It can be illustrated below.
As a movie blockbuster launches, a moviegoer visits the “middleman, marketplace” app to choose the most appropriate time slot. After selecting, he or she will be directed to the movie operator digital presence to complete payment. At this stage, movie operators usually try to cross-sell other add-ons as mentioned above which becomes ineffective as loyalty programmes become too complicated, if it is not embedded as part of the digital experience. If the loyalty programme is built on top of embedded finance solutions, customers will no longer need to refer to physical membership cards and customers need not be routed to third party payment sites to complete their payment transactions.
Routing customers to third party payment sites is highly disadvantageous to movie operators. They lose control of their customer journey and subject the eventual success of movie tickets and add-ons purchase to third parties, and even if there is a failure, they would have zero insights and simply not be able to do anything about it.
Ideally, once movie operators implement embedded finance as part of their business process, moviegoers can make payments seamlessly and movie operators are able to directly administer loyalty programmes in the form of movie ticket bundles discount and add-on bundles purchase. Such richer finance experiences will be critical in ensuring that moviegoers reduce their dropout rate when checking out for their movie tickets and add-ons.
Movie operators can also explore new business opportunities by launching niche insurance plans to protect their customers. With just an additional small premium, customers would be able to change their time slots at no further additional costs if they suddenly are not able to make it for their movie session. More importantly, this could be a whole new revenue channel for these movie operators.
The movie industry and operators have been around for a long time and will be around for a long time to come. However, in this digital age, consumers expect a lot when it comes to expecting seamless finance experiences and any friction can be detrimental - resulting in losing customers to competitors. Read through our website to find out how long standing traditional businesses have transformed and utilise embedded finance to bring about richer finance experiences for the customers, and improve their bottom line.