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Embedded finance - richer finance experiences for students and alumni



Darren Thang, APAC marketing manager, thinks back to his college days and now sees how much easier it could have been, had the finance experience been better.


For some of us, our college days are the best days of our lives - it is a period of time full of new experiences and learnings. It is a place where we undergo many different things that define us.


For many, it feels like a second home, as we spend an incredible amount of time on-campus, where we meet various unique people, forge amazing friendships, make some mistakes, before finally graduating with the coveted degree.


However, entering college is not as easy for everyone. Other than securing the spot required with decent grades, finance is usually one of the biggest stumbling blocks in entering the college of choice.


Finance experience


I can still remember observing some of my friends’ euphoria of getting good grades getting eroded away quickly as their finance experience that followed was full of friction and confusion as they had to make comparisons of the different financing options that were external to the university.


Given that most of our spending powers were limited back then as students, I vividly remember that my physical student card, other than giving me all required access to the campus compounds, was instrumental in allowing me to enjoy deals with merchant partners.


These include using it for food, drinks, educational materials, snacks and many other things. I could only imagine the huge amount of effort taken to have such tie ups with different merchants. Admittedly, while there were banks that were offering financial services targeted at the student population, there would always be a level of detachment as most colleges did not take ownership of the experiences for their respective students and alumni community.


After graduation, we were invited to join the college’s alumni club and to my surprise, there were even more participating merchants for retail, training and education, home and professional services , and the list goes on. I still remember receiving a gold physical alumni membership card which I thought was pretty cool then. The only problem was that as the real estate of our physical wallet becomes limited, carrying only the essential cards becomes very important. Over time, that membership card was misplaced and never seen again.


Expectedly, once we graduated from college to embark on our careers, it would be a tall order to maintain that close knitted relationship with alumni as compared to current students. What can help bridge that gap? In my opinion, implementing embedded finance would be the most effective solution. It would help colleges provide a richer finance experience for their prospects, current students and even alumni.


Digital ecosystem


The good news is that like most brands, colleges are also embarking on their own digital transformation journey and most colleges have their own mobile phone apps built to provide that digital ecosystem with the goal of enhancing membership stickability and value proposition in this mobile era.


The problem with most in-app experience is that the “checkout” stage is usually lacking and that means that when it comes to consuming and making payments, the finance experience is far from ideal or at times, non-existent. For any digital ecosystem to flourish and be highly “stickable”, the finance experience needs to be optimised and that means a seamless and frictionless flow of money arising from the value exchange between brands, stakeholders and their customers and in this case, between colleges, merchants, students and alumni community.


Full and part time education and course enrollment


Many times, I have explored the idea of heading back to college to further my education. However, one of the main reasons that have always held me back is the arduous finance experience that comes along with it. While there are many financing options available, I cannot help but think that this is actually the perfect opportunity for any colleges, to be able to provide financial services, take control of that finance experience of potential new students and optimise their conversion rate.


Thinking back, assuming the colleges were of similar standards, if other colleges offered a more robust finance experience, such as offering bigger, better discounts or competitive student loans directly, those would have been definite game changers and I might have chosen differently.


Merchants partnership


While flashing the student card for current students to enjoy promotions with merchants may seem like the norm, that process becomes tremendously non-seamless once a student graduates and moves into the alumni phase. I still remembered I had to first flash my physical student card, keep it, then finally make payment with my preferred method. Once again, colleges are in the perfect opportunity to provide financial services as this would effectively tie up the loosely held merchant partnerships programme and provide a richer finance experience.


Imagine, instead of flashing a student card or alumni card first, consumers simply need to make payment with a college branded card and immediately, all promotions discussed with the merchants are administered seamlessly, without having the merchants to manually do it after each card flash. This will also reduce human error, or abuse of the promotions which usually has a negative experience for merchants.


Competition is heating up


Despite the presence of pandemic and transformation, the education industry is here to stay for a long time to come. However, in this digital age, consumers expect a lot when it comes to expecting seamless finance experiences, even for non-bank brands such as colleges. With the quality of education provided normalising across the board, any friction in customer journey can prove to be detrimental - resulting in colleges losing potential quality students to competitors and falling out from existing membership schemes and ecosystem.


Speak to us 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.