GLOSSARY: Contextual Finance

What is contextual finance?

According to Viola, ‘A person doesn’t wake up with the desire to take out a loan, but they would wake up with the desire to buy a new bed’ – this is contextual finance, which provides customers with a seamless, personalized and real-time financing experience.

Contextual Finance refers to the integration of financial services and products directly into the digital experiences and workflows of consumers and businesses. Instead of having to visit a separate financial application or website, consumers can access financial capabilities seamlessly within the context of whatever app, platform or service they are already using.

With Contextual Finance, lending, payments, banking, investments and other financial functions are embedded into the natural journey of users as they shop online, manage transportation, book travel, interact on social media and more. This allows financial services to be delivered in a hyper-relevant and contextual way at the precise moment they are needed.

What are the benefits of contextual finance?

Contextual finance is beneficial to banks, lenders, merchants and B2C and B2B customers. 

    Benefits for Lenders:

      By embedding their loans within the customer purchase journey, lenders are able to: 

      – Easily acquire new customers

      – Build their brand presence at the point of sale

      – Cross-sell to existing customers

      – Onboard new merchants at scale

      Benefits for Merchants:

      Embedded lending can help merchants increase sales, average order value and customer loyalty. 

      By embedding responsible financing options from reputable lenders at the point of sale, sellers make it easier for their customers to make purchases that they might not have otherwise been able to afford, while simultaneously protecting the customer from unmanageable debt.

      Benefits for Customers:

        Seamless User Experiences

        Contextual Finance eliminates the fragmented and disjointed experiences of having to switch between multiple apps and websites to handle financial needs separately from other digital activities. It provides a smooth, continuous experience for the user.

        Data-Driven Personalization

        Deep integration with digital user data enables financial products and offers to be dynamically personalized based on real-time context and user behavior.

        What are the benefits of contextual finance?

        Contextual Finance is a broader concept that encompasses lending but also covers embedding payments, banking, investing and other financial services into digital user experiences.

        Embedded Lending refers specifically to the integration of lending applications and processes into non-financial websites and mobile apps to provide funding at the point of need.

        So while Embedded Lending is one form of Contextual Finance, Contextual Finance takes a more holistic view of making any financial service contextually available whenever and wherever it is required by the user’s current situation.

        Are you interested in embedded lending? Explore our white-labeled embedded lending solution.

        Interested in a white-labeled embedded lending solution?

        Let’s Talk Embedded Lending

        Hi, I'm Nick.