Customer Experience Strategies for Embedded Finance and BaaS Companies: The CX Playbook

Embedded finance and Banking-as-a-Service (BaaS) have revolutionized how financial services are delivered, consumed, and perceived. Embedded finance touches nearly every corner of our daily lives, from e-commerce websites that provide instant credit at checkout to rideshare apps offering seamless payment solutions. BaaS players—often operating behind the scenes—empower businesses to integrate financial products and services without needing to build and maintain a full banking infrastructure.

Yet amid this rapid growth, a crucial question arises: How do embedded finance and BaaS companies create truly outstanding customer experiences (CX)? While operational excellence and regulatory compliance matter greatly, a frictionless and engaging user journey can make or break adoption rates. This playbook explores the strategies you can use to deliver stellar CX at scale—whether you’re a dedicated BaaS provider or a brand incorporating embedded finance into your platform.

Understanding the Embedded Finance and BaaS Landscape

Before we discuss customer experience strategies, let’s clarify what embedded finance and BaaS really entail—and why CX has become such a differentiator.

Embedded Finance

• This concept refers to integrating financial services—payments, lending, insurance, investments, or banking—into non-financial platforms and apps.
• Think of an online marketplace that lets you buy now and pay later (BNPL) seamlessly at checkout. Or a gig platform that provides real-time wage payouts to freelancers.
• The aim is to deliver financial functionality exactly when and where the user needs it, without forcing them to bounce to a separate banking app or website.

Banking-as-a-Service (BaaS)

• BaaS providers essentially offer the infrastructure, compliance framework, and APIs so other businesses can roll out financial products under their own brands.
• This might mean a software-as-a-service (SaaS) platform can add payment rails, or a retail chain can launch its own loyalty-based credit card—without becoming a bank themselves.
• By outsourcing the technical and regulatory heavy lifting, companies can innovate faster and focus on their core offerings.

Why CX Matters

• Embedded finance and BaaS solutions aim to make financial transactions and services invisible and frictionless. The more seamless the experience, the more likely users are to adopt and trust these services.
• In a crowded market, superior CX can be the deciding factor that persuades potential partners and end users to pick your platform over another.
• Poor CX—like cumbersome identity checks, slow payment processing, or lack of real-time support—can lead to cart abandonment, high churn rates, and damage to your brand’s reputation.

Because you’re operating in a space that aims to simplify complex financial processes, you have a unique opportunity to differentiate through user-friendly design, transparent communication, and empathetic customer support. Let’s look at some strategies to achieve these goals.

Prioritizing Simplicity from the Ground Up

We often assume finance is complicated, but embedded finance and BaaS solutions promise the opposite: streamlined, user-friendly interactions. Here’s how to keep things simple:

Conduct CX Audits of Your User Flows

• Map out every step an end user or partner brand needs to take. How long does sign-up take? How many fields do they fill out for KYC (Know Your Customer)?
• Aim to reduce friction. Could you auto-populate certain fields, use biometric verification, or offer single sign-on (SSO)? Identify stumbling blocks like hidden fees, unclear instructions, or confusing user interfaces (UI).

Use Plain, Jargon-Free Language

• Even though BaaS and embedded finance are complex, your messaging shouldn’t feel that way. Terms like “API,” “compliance stack,” or “settlement cycles” might be second nature to your team, but can alienate customers.
• Offer glossaries, short tooltips, or inline help for essential terms. When explaining product features, focus on benefits (e.g., “instant payouts” or “lower fees”) rather than back-end details.

Adopt Mobile-First UX

• Embedded finance often happens on the go—like paying for a rideshare or checking out in a shopping app. Ensure your solution is fully optimized for mobile screens.
• Leverage responsive design, large tap targets, and easy navigation so users don’t get stuck trying to confirm payments or manage funds on a tiny screen.

Iterate and Simplify

• Regularly gather user feedback—via in-app surveys, interviews, or analytics—and act on it to reduce friction.
• Even small tweaks, like reordering menu items or adding a progress bar, can drastically improve the perceived ease of use.

Simplicity isn’t about removing features; it’s about removing confusion. By centering your design around what the customer needs, you’ll help them accomplish tasks in fewer steps, leading to higher satisfaction and trust.

Secure, Compliant, and Transparent: Building Trust

When money is involved, users are understandably cautious. Any perceived risk—whether related to data security, fraudulent activity, or hidden fees—can erode trust. Therefore, a cornerstone of CX for embedded finance and BaaS is showing that you’re secure, compliant, and honest.

Security by Design

• Use encryption, tokenization, and other best practices to protect sensitive financial data.
• Implement robust authentication measures—like two-factor authentication (2FA) or biometrics—without adding too much friction.
• Display trust seals or badges in the UI so users know you take security seriously.

Regulatory Compliance

• Different regions have different rules. You might need to comply with regulations like PSD2 in the EU, or require broker-dealer licensing in the U.S.
• Demonstrate compliance clearly: highlight your partners (banks, card networks), explain how you handle data, and link to relevant certifications.
• Over-communicate changes in terms of service or data usage so there are no surprises for partners or end users.

Fee Transparency

• Hidden fees are a major turn-off. If you charge transaction fees, subscription fees, or foreign exchange markups, be upfront about them.
• Provide real-time cost breakdowns, especially for currency conversions or interest charges.
• If you can’t offer entirely transparent fees, at least offer easy-to-read statements or toggles that let users view the total cost before they proceed.

Proactive Fraud Prevention

• Offer immediate alerts for suspicious transactions. If users sense something off about their account activity, they should be able to freeze it or reach support immediately.
• Use AI-driven risk scoring or velocity checks to flag potential fraud. Communicate with customers if you place a temporary hold on transactions, so they understand why it happened.

By making security and compliance core to your CX strategy—not just back-end concerns—you show users that you respect their assets and personal data. This fosters deep trust, which is crucial in financial services.

Personalization and User Segmentation

No two customers are exactly alike—some might be new to digital finance, while others are experienced traders or merchants with specific needs. Tailoring the experience to different segments can significantly boost satisfaction and usage.

Identify Core User Segments

• For BaaS, your direct clients might be e-commerce sites, travel apps, or small businesses that want to offer embedded banking. Each has distinct objectives, like fast payouts or credit lines.
• For embedded finance, your end users may vary by demographics—millennials vs. older adults, gig workers vs. small business owners, etc.

Customize Onboarding Flows

• When new users sign up, ask a few relevant questions—e.g., “Are you a freelancer?” or “What’s your primary financial goal?”—to tailor the next steps.
• Adjust the recommended features or credit limits based on the data they provide. For instance, a gig worker might be offered daily wage cash-outs, while a small business owner sees invoice financing.

Dynamic Content and Alerts

• Show contextual tips based on user behavior. If someone frequently checks exchange rates, highlight a currency hedging feature or new currency pairs.
• Allow users to set notifications for specific triggers (e.g., deposit confirmations or stock price thresholds). Let them fine-tune how and when they receive these alerts—via app push notifications, SMS, or email.

Data-Driven Recommendations

• Use AI or machine learning to analyze transaction patterns and suggest relevant products. For example, if a user’s balance is consistently high, nudge them toward higher-yield investment accounts or personalized credit offers.
• Be cautious not to overdo it—recommendations should feel helpful, not spammy. Show how the suggestion adds value or saves money.

Personalization fosters a sense of care and belonging, which is critical for retention. End users are more likely to stick around if they see that the platform “gets” their unique situation and proactively assists their financial goals.

Seamless Integrations and Open APIs

For BaaS players in particular, your clients—the companies embedding your services—are looking for smooth integrations that require minimal coding effort and let them maintain brand consistency. The smoother your integration experience, the happier your clients (and their customers) will be.

Developer-Centric Documentation

• Offer clear, concise API docs with code samples, step-by-step tutorials, and test environments.
• Provide a robust sandbox where clients can experiment safely before rolling out to production.
• Minimize the jargon, and ensure your documentation stays updated with new features or security patches.

White-Label Customization

• Let your clients embed your financial widgets or modules into their own platforms with ease. They should be able to match the look and feel of their brand—fonts, colors, icons, etc.—so the end user has a consistent experience.
• Offer flexible UI/UX components or style guidelines that integrate seamlessly, whether it’s a mobile app, web portal, or IoT device interface.

Plug-and-Play Modules

• Beyond APIs, consider offering pre-built modules (e.g., a payment gateway button, a digital wallet interface) that can be dropped into an app or site quickly.
• These modules should handle crucial aspects like security, compliance checks, and user authentication out of the box.

Multi-Platform Compatibility

• Ensure your solution works across different operating systems (Android, iOS), browsers, and device form factors.
• Provide regular updates to address compatibility issues or performance bottlenecks.

Great developer experiences translate into better customer experiences for the end user. If your BaaS platform is known for hassle-free integration and reliable performance, you’ll attract more partners—who then extend your CX reach.

Responsive Customer Support: A Must-Have

In financial services, even minor technical glitches can lead to big consequences—delayed payments, inability to withdraw funds, or confusion about account balances. That’s why robust, responsive support isn’t optional.

Multiple Support Channels

• Provide in-app chat, email, phone, and possibly social media support. Users have different preferences; let them reach you in the way they’re most comfortable.
• If you serve a global audience, consider offering support in multiple languages and time zones.

24/7 Availability for Critical Issues

• While not every inquiry requires an immediate human response, urgent requests—like fraud alerts or locked accounts—need near-instant attention.
• Use a tiered system: everyday queries can go through chatbots or self-service portals, while emergencies escalate to a live agent with the right expertise.

Proactive Status Updates

• If your platform goes through scheduled maintenance or experiences an outage, proactively inform users via notifications, emails, or a status page.
• Set realistic timelines for when the service will be restored and follow up once it’s back online.
• Honesty and transparency during downtimes build trust, whereas silence leads to frustration.

Training and Empowerment

• Ensure support agents understand your product deeply—technical details, common user journeys, and regulatory constraints.
• Give them the autonomy to resolve issues quickly, whether that’s refunding a fee, resetting a password, or explaining a complicated transaction.

Quality support can be a game-changer. Even if something goes wrong, a swift, empathetic resolution can transform an upset customer into a loyal advocate.

Education and Thought Leadership

Consumers and businesses alike often feel overwhelmed by financial jargon or the complexities of BaaS. By offering educational resources, you not only empower your audience but also build credibility and loyalty.

Interactive Tutorials and Walkthroughs

• Create short, guided tours within your app—especially upon first use. Show how to link bank accounts, set up recurring deposits, or apply for credit.
• If you’re a BaaS provider, craft an onboarding journey that demonstrates how to integrate your APIs step-by-step.

Regular Webinars or Live Streams

• Host sessions on trending financial topics—like “Navigating BNPL in 2024” or “How Embedded Finance Helps Your E-Commerce Store Scale.”
• Invite industry experts, partner reps, or satisfied clients to share best practices. Record these webinars and store them in an accessible knowledge base.

Blogs, Guides, and White Papers

• Maintain a resource hub with articles on regulatory changes, user experience design for fintech, or success stories from your customers.
• Break down complex topics into simple, digestible chunks—lists, infographics, or short videos.

Thought Leadership on Social Media

• Encourage your executives or product leads to share insights on LinkedIn or Twitter, discussing the future of embedded finance.
• This approach fosters a sense of community and positions your brand as a go-to expert.

An informed user or partner is a more satisfied one. By guiding them through the intricacies of the financial ecosystem, you reduce confusion, build trust, and position your brand as a knowledgeable ally.

Building a Feedback-Driven Culture

Customer experience isn’t static—you need constant feedback loops to refine and evolve your offerings. By embracing feedback, you can uncover gaps, fix pain points, and discover new feature opportunities.

In-App Surveys and NPS Tracking

• Use Net Promoter Score (NPS) prompts after key interactions—like completing a deposit or finishing a sign-up flow—to gauge user sentiment.
• Ask short, focused questions: “How easy was it to complete your withdrawal today?” or “Would you recommend this feature to a colleague?”

User Community Forums

• Host an online space (a dedicated forum, Slack group, or subreddit) where users can exchange ideas, share best practices, and report issues.
• Monitor these discussions to spot recurring complaints or feature requests and respond transparently.

Beta Testing Groups

• For major updates or new modules, invite a subset of enthusiastic or power users to test early. Gather their suggestions, fix bugs, and refine the UX.
• Reward participants with perks—like fee waivers or early access to advanced features.

Public Roadmaps

• Show your user base what you’re working on and what’s coming next. This fosters excitement and accountability.
• Be open to pivoting or reprioritizing features if you receive strong feedback that something else is more urgent.

A continuous feedback loop ensures your CX remains aligned with evolving user expectations. People appreciate feeling heard—when you implement a feature they requested or address a complaint promptly, they often become vocal advocates for your brand.

Balancing Automation and Human Touch

Automation can drastically boost efficiency—think chatbots handling routine queries, or automated KYC checks. Yet in finance, sometimes customers just want to talk to a real person. Striking the right balance is key.

Smart Chatbots for Routine Tasks

• Implement chatbots to answer FAQs (e.g., “What’s my transaction limit?”) or handle password resets. This frees up your human agents for more complex inquiries.
• Include easy escalation options: “Would you like to speak to an agent?” so users don’t feel stuck in a loop.

Personal Advisors or Relationship Managers

• For higher-tier clients or complex financial products, assign a dedicated human contact. This ensures the user gets personalized guidance and feels valued.
• Offer scheduling tools that let them book calls or video chats with an advisor at their convenience.

Hybrid Onboarding

• In some cases, you can combine automated identity verification with a brief video call to confirm legitimacy or provide reassurance.
• This hybrid approach streamlines the compliance process while retaining a personal touch.

Empathetic Agent Scripts

• Train agents not just on technical solutions but also on empathy. If a user’s transaction fails or they’re stressed about a missing deposit, agents should acknowledge the frustration, apologize, and offer next steps promptly.

Automation should never replace genuine human connection. Instead, use it to handle repetitive, low-value tasks while reserving human expertise for scenarios where empathy and problem-solving skills are paramount.

Measuring Success: CX Metrics that Matter

You can only improve what you measure. In embedded finance and BaaS, certain metrics can reveal whether your CX strategies are succeeding or need adjustment.

Adoption and Retention Rates

• Track how many new users sign up for the service or integrate your API—and how many continue using it after the initial period.
• If churn rates are high post-onboarding, investigate friction points in the user journey.

Average Response Time (ART)

• Measure how quickly support agents or chatbots respond to queries. For finance, aim for near-instant responses for critical issues and under a few minutes for standard requests.

Net Promoter Score (NPS)

• A healthy NPS suggests users are willing to recommend your platform to peers, indicating strong satisfaction and loyalty.
• Monitor this score over time, especially after launching significant product updates or new features.

Customer Satisfaction (CSAT)

• After support interactions or major account actions, solicit quick CSAT surveys (“How satisfied were you with your experience today?”).
• If CSAT is low in certain areas—like KYC or wire transfers—dig deeper to see what’s causing disappointment.

Conversion Funnel Drop-Off

• For embedded finance flows, see where prospective users abandon the process. Was it right before finalizing a loan? Or after seeing the interest rate?
• Tweak UI elements or reevaluate pricing to reduce drop-off rates.

By tying improvements directly to these metrics, you create a data-driven feedback loop: identify a weak spot, refine the CX, see if the metric improves, and repeat. Over time, consistent incremental gains can lead to standout performance.

Conclusion

Customer experience has become the linchpin for embedded finance and BaaS companies that want to stand out in a fiercely competitive landscape. Whether your goal is to provide behind-the-scenes banking APIs or to integrate frictionless financial tools into existing apps, prioritizing CX can mean the difference between widespread adoption and a mediocre response.

Here’s a quick recap of the strategies outlined in this playbook:

Design for Simplicity: Reduce friction at every touchpoint, from sign-up to daily usage, by streamlining workflows and using plain language.

Build Trust Through Security and Transparency: Show robust compliance, highlight security features, and break down fees so users aren’t caught off guard.

Personalize the Experience: Cater to different user segments with dynamic onboarding flows, data-driven recommendations, and relevant notifications.

Offer Seamless Integrations: Make developer documentation clear, provide white-label UI options, and ensure your solution works smoothly across devices.

Double Down on Customer Support: Provide quick, empathetic assistance via multiple channels, and proactively communicate about downtimes or issues.

Educate and Empower: Produce in-app tutorials, webinars, or guides that demystify financial services, helping users feel confident.

Embrace Feedback Loops: Regularly collect user insights through NPS, in-app surveys, and beta testing, then iterate rapidly.

Balance Automation and Human Touch: Automate routine tasks but keep humans in the loop for sensitive or complex scenarios.

Measure the Right Metrics: Track adoption rates, NPS, and funnel drop-off points to gauge CX health and identify improvement areas.

As embedded finance and BaaS continue to reshape how we interact with money, companies that lead with a customer-focused mindset can secure long-term loyalty and stand out in an ever-evolving market. By applying these CX strategies, you’ll not only fulfill user expectations but also exceed them—turning everyday financial tasks into engaging, trustworthy, and even delightful experiences.

Whether you’re developing a new BNPL service or enabling a brand to embed debit accounts in their mobile app, remember: the best technology is the one that feels practically invisible to the user, guiding them effortlessly to their financial goal. With the right CX approach, you’ll create a lasting, positive impact on both your partner brands and the end users they serve—securing a strong future in the dynamic world of finance.