The biggest Swiss retailer, Coop, has launched an extensive embedded finance offering. The product is called Coop Finance+ (website) and consists of a bank account and debit card. It appears that investment and insurance products will follow in the future. Coop has collaborated with Additiv, a fintech orchestration provider from Switzerland that is known for its embedded investment technology. This might be the first time that the company also supports the integration of banking and payment products. While Additiv covers the orchestration and technology layer, Coop Finance+ relies on banks, investment, and insurance companies for other crucial aspects: Hypothekarbank Lenzburg, Vanguard, OLZ, Liberty Vorsorge and Glarner Kantonalbank. The mention of Vanguard and Liberty Vorsorge gives a strong indication that investment and insurance products will follow.
Depending on what country you call home, you might know a local retail company that offers financial services. A brand that probably many of us know is British retailer Tesco, which owns Tesco Bank, whose predecessor was founded in 1997. And guess what? Even Coop has had its own bank in the past. This bank was founded in 1929 by Coop’s predecessor and has been called Coop Bank since 1995. However, Coop sold its stakes in 1999 and the bank rebranded as Bank Cler in 2017 (Bank Cler website). Therefore, a retailer launching financial services is anything but new, even for Coop. The interesting piece is that Coop Finance+ is not relying on its own license but is partnering with various financial partners in the background. I believe this is the right decision in 2023 and this gives the Coop Finance+ product a very different spin.
One of the challenges that Coop will have to solve is the question of why their customers should use their offering. Coop Finance+ is a separate app that customers will have to download and they can earn additional points. Personally, I believe that outstanding embedded finance products create an 1+1=3 atmosphere where combining financial services with something non-financial creates a bigger result than the sum of its parts. While Coop has chosen a setup that provides them with more flexibility and lower costs, they will have to prove that their product is appealing to their targeted customers. I am sure they understand this and I will make sure to follow their journey.
