7 ways enterprises can scale and optimize the user experience

Elle Satterwhite
Product Marketing, Plaid

Elle markets payments products used by companies like Venmo, Chime, and Citibank to make bank payments fast, simple, and more secure.

Today, any enterprise can become a fintech by providing valuable financial services to customers from within its product interface. A growing number of companies outside the financial services space are integrating everything from payments to lending into their offerings, allowing them to access new markets and create new revenue streams. This isn’t just the latest trend. Bain & Company estimates that financial services embedded into e-commerce and other software platforms will account for more than $7 trillion in transactions by 2026.

And while the benefits of embedded finance are becoming well-understood, the challenges and complexities surrounding doing it right are often overlooked. For example, focusing exclusively on creating a fast onboarding experience can increase the risk and cost of financial fraud while unreliable connectivity can lead to lower conversion and retention rates and funding delays. To succeed, enterprises don’t just need the right strategy–they need the right embedded finance partner. 

Here are some of the ways a trusted industry leader like Plaid can help supercharge every aspect of your financial offering—from onboarding more users, to fighting fraud, to accelerating payments—with products and services designed to provide the best possible user experience for both new and returning users. 

1. Fund accounts from virtually any financial institution 

Many smaller banks and credit unions don’t yet have the digital capabilities of bigger banks, making it difficult for their customers to digitally connect and fund third-party accounts. With Plaid, virtually every user has the ability to fund a new account, even when they bank with a smaller financial institution. Plaid offers unsurpassed coverage, securely connecting to over 12,000 financial institutions across the United States, Canada, and Europe. 

“Plaid has direct APIs with the top financial institutions. That makes it more robust, not just in terms of response time, but also the quality and depth of data it provides,” said Siva Shanmugam, Director of Verification and Fraud Strategy, Prosper.

2. Sign up more customers, faster

It’s no secret that new customers are more likely to become engaged and profitable when they can quickly and securely sign-up and fund a new account. With Plaid Link, users can enter the login credentials associated with their account, permission their financial data, authenticate, and connect–all in seconds. Plaid has added new features to Link, which can increase conversion over time and help activate more users.  And because one in three US bank account holders have already used Link to connect to an outside app, its familiarity is unmatched.

As an API-first network, Plaid has a deep understanding of how OAuth flows work. We support the largest OAuth institutions, providing a secure and reliable way for users to connect their accounts. With OAuth, end users temporarily leave Link to authenticate and authorize data sharing using the institution's website or mobile app instead. Afterward, they're redirected back to Link to complete the Link flow and return control to the third party application. With OAuth, users enjoy a more familiar banking experience because the authentication experience takes place on their bank’s website or mobile app. 

“The backbone of our funding flows is built on our integration with Plaid Link. Enabling customers to instantly connect their checking and savings accounts allows us to provide a nearly seamless experience when customers want to deposit funds to Betterment,” said Ashley Curran, Director of Product, Betterment.

3. Boost conversion rates 

It can be costly each time a user abandons onboarding, especially when you spend so much time and money on acquisition. Plaid is proven to help retain customers during the onboarding process by allowing you to authenticate accounts quickly and seamlessly. As a result, companies that use Plaid have increased conversion rates by 10-20%, according to Plaid internal data from 2022. This helps operationalize at scale, increase revenue, and reduce total customer acquisition cost.

“Ensuring the seamless and secure transfer of funds helps us get new customers to trust us faster and retain our existing customer’s trust,” said Ankita D’Mello, Senior Product Manager at Wise. 

You can build a scalable authentication solution and still have the flexibility to support each customer’s open finance journey by using solutions like Core Exchange. Core Exchange is Plaid’s interoperable implementation of the Financial Data Exchange (FDX) API spec. The FDX API for open finance data sharing is already used by 53 million consumer accounts. 

If you have a native mobile application, Plaid recommends enabling App2App authentication for a more secure and seamless consumer authentication experience. The user is brought to the app where they can use biometrics to authenticate. When App2App is enabled, 10-15% more users successfully connect their bank accounts, according to Plaid internal data from 2022.

Here Plaid’s user flows intelligently guide your customers to the best and fastest method of account authentication based on the institution they select: 

4. Get customers up and running quickly 

The faster your customers authenticate their bank accounts, the faster they can start using your services. Instant Auth gets customers up and running quickly and securely by verifying their bank accounts in seconds. Instant Auth supports credential-based login for 3,800+ financial institutions in the U.S.—covering the majority of deposit accounts. Here’s an example of the Link user flow that integrates OAuth:

5. Leave no customer behind 

Roughly 1,000 US financial institutions can’t be instantly authenticated. That’s why Plaid offers Automated Micro-deposits which takes a single micro-deposit, automatically verifies it within one to two business days, and then notifies you when it’s done. To use Automated Micro-deposits, customers simply need to provide banking credentials along with their account and routing numbers. 

For the ~2,000 institutions that don't support Instant Auth, Instant Match, or Automated Micro-deposit verification, Plaid offers Same Day Micro-deposits, making a deposit that posts within a single business day, about two days faster than the standard micro-deposit experience. Users are then instructed to manually verify the code in the transaction description deposited in the account.

Here’s an example of the Automated Micro-deposits user flow:

Fintech Current, which offers banking services through a third party, integrated Plaid authentication into its user flows. “Building Plaid into our onboarding experience has improved our conversion rates. It has also increased the lifetime value of our customers,” said Trevor Marshall, Chief Technology Officer, Current.

6. Reduce the risk of fraud 

To combat fraud, Plaid helps verify identities and lower your risk with automated identity verification solutions. This can cut down or in some cases, completely eliminate time spent on manual risk reviews. These solutions can also help with customer due diligence, an important component of Anti-Money Laundering (AML) compliance programs. 

With Plaid Identity Verification (IDV), companies can confirm identities in as little as 10 seconds, while fighting sophisticated threats like synthetic identity fraud, presentation attacks, and account takeovers. With IDV, consumers can record short videos to confirm that they are present, live, and their face matches the picture on their ID document. Together IDV and Plaid Monitor offer a complete verification, AML, and KYC compliance solution. 

“In today’s macro-environment, margin is everything. Between high interest rates and unemployment numbers, we need to stay laser focused on both mitigating fraud and removing friction from the onboarding process. Plaid helps us do both,” says the Head of Risk at a leading BNPL provider

Here’s an example of the Identity Verification user flow:

7. Fund accounts instantly 

Customers can encounter account funding delays when they use the standard funding method for US bank accounts, the Automated Clearing House (ACH) network. But 60-70% of bank accounts can be funded instantly using Real-Time Payments (RTP®). To manage this complexity across accounts and rails, Instant Payouts provides intelligence on RTP eligibility. If an account is not eligible, our customers can seamlessly route the transaction to ACH (Same Day or Standard) without sacrificing the customer experience. 

Customers relying on ACH funding can speed up the progress with Signal which helps determine when there’s a low risk of ACH returns. As a result, customers no longer need to place holds on those funds in order to ensure they settle or to wait for settlement. That allows them to speed up funds availability. After using Signal, Uphold saw a 73% reduction in losses from fraud and sped up 96% of ACH funding events.

→ To learn more about how Automated Clearing House (ACH) payments and transfers work, check out Plaid’s Guide to ACH Payments.

Getting started with Plaid 

Plaid customers who are interested in enabling new features can reach out to their account manager to begin the process. New customers can complete our contact form or email our team directly at info@plaid.com.

Developers interested in trying out Plaid for bank authentication can get started today by creating an account or reviewing our API docs—guides, resources, and references for building with Plaid.