Embedded Finance and Its Impact on Platform NPS

Net Promoter Score (NPS) has long been a critical metric used company-wide to assess customer loyalty, indicating how likely someone is to refer a friend to the platform they are currently using. This metric provides insights not just on loyalty, but also on overall retention, sentiment, brand value, and more. While NPS is often viewed as a company-wide metric, it is increasingly important for product leaders to pay close attention to it, especially in the context of vertical SaaS and embedded finance.

Vertical SaaS and Embedded Finance: A Growing Trend

Vertical SaaS continues to experience significant growth. According to Fractal, "Since January 2020, the total market cap of the Vertical SaaS Index has grown by 18% and the total LTM revenue of the companies in the index has doubled from $14.9B to $29.5B." Simultaneously, we're witnessing substantial growth in Embedded Finance. A report from Plaid and Accenture estimates $230 billion in net new revenue by 2025 from Embedded Finance solutions.

This concurrent growth highlights how SMB customers are likely looking for more comprehensive solutions from their platforms, particularly in financial services. A survey by Cornerstone Advisors of 750 SMBs found that 79% would be more likely to select an industry-specific software provider if it integrated all accounting functions.

The Convergence of Vertical SaaS and Embedded Finance

The convergence of vertical SaaS and embedded finance is a natural progression as platforms cater to their customers' niche needs. Embedded finance allows for seamless integration of financial capabilities that customers require directly into these specialized platforms. This integration can significantly impact your platform's NPS in several ways.

By integrating financial services directly into your platform, you reduce friction for users who would otherwise need to switch between multiple applications. This seamless experience can lead to higher satisfaction and, consequently, improved NPS scores. When users can access both industry-specific tools and financial services in one place, they're less likely to look for alternatives. This increased reliance on your platform can translate to higher loyalty and better NPS ratings.

Offering embedded finance solutions demonstrates that you understand and cater to your customers' comprehensive needs. This perceived value can positively influence how likely users are to recommend your platform. In a competitive vertical SaaS market, offering integrated financial services can set your platform apart from competitors, potentially leading to more positive recommendations and higher NPS.

How Adding Embedded Finance, Especially Embedded Accounting, Will Increase Your NPS

Integrating embedded finance, particularly embedded accounting, into your vertical SaaS platform can significantly boost your NPS. By offering integrated accounting functions, you're saving your users valuable time they would otherwise spend on manual data entry or switching between applications. This efficiency gain can lead to higher satisfaction and better NPS scores. Automated, integrated accounting reduces the likelihood of human error in financial processes. Fewer errors mean less frustration for users, potentially leading to more positive platform recommendations.

With embedded accounting, users can access up-to-date financial information within your platform. This real-time visibility can empower better decision-making, enhancing the perceived value of your platform and potentially improving NPS. Vertical SaaS platforms can offer industry-specific financial tools and insights that generic accounting software can't match. This tailored approach can significantly enhance user satisfaction, loyalty, and retention. For industries with specific regulatory requirements, embedded accounting can help ensure compliance more easily. This added peace of mind can contribute to higher NPS scores.

Driving Growth and Loyalty Through Embedded Finance

The integration of embedded finance, particularly embedded accounting, into vertical SaaS platforms represents a significant opportunity to enhance user experience, increase platform stickiness, and ultimately improve NPS scores. By meeting the growing demand for integrated financial services, product leaders can position their platforms for success in an increasingly competitive landscape.

As you evolve your product roadmap to incorporate embedded finance, keep a close eye on your NPS as a key indicator of success. The convergence of vertical SaaS and embedded finance isn't just a trend — it's becoming an expectation. By meeting and exceeding these expectations, you can drive customer loyalty, foster positive recommendations, and achieve sustainable growth for your platform.