Micro-investing might sound like a trendy concept, but the author of this article says it deserves sereious attention.
This article comes from Philipp Buschmann, co-founder, and
chief executive of AAZZUR. Buschmann has written
for this news service
before. His firm, based in Berlin and London, provides
technology solutions for banks and other financial
institutions.
The usual editorial disclaimers apply, and if you wish to
respond, email tom.burroughes@wealthbriefing.com
Imagine being able to grow your money while spending it – that’s
what embedded finance offers. Keeping your audience captured and
invested in your company in today’s digital age demands
imagination and bolder choices. But what do those bolder choices
entail? Well, let’s start with micro-investing, the nifty tool to
re-ignite consumer confidence and put your brand back on track.
This is not a complex process; I have broken down how you can
make the most of this opportunity and what it will mean for your
customers.
Growing wealth, one pound at a time
Micro-investing to you might just be a trendy new term that
doesn’t mean much, but I’m here to change your mind. For too
long, investing has been seen as something only wealthy people
can do, but thanks to embedded finance the opportunity gap is
widening, and more and more people are reaping the benefits. The
true power of micro-investing is how easy it is to start, as in
you only need a £1 in some cases. Offering accessible financial
products such as this not only puts more money in the customer’s
pocket but forms a new relationship that can grow over
time.
To be the star of the show, companies need to be ambitious and
repair fraying loyalty with empowering solutions. Apps like
Acorns, Stash, and Robinhood have paved the way, letting users
round up their everyday purchases to the nearest dollar and
invest the difference, or set aside small amounts of money each
week or month. Over time, these small contributions can add up to
significant investments, helping users build wealth in a way that
feels manageable. There is nothing stopping you from following
their footsteps as you can trial it without having to reinvent
your entire IT infrastructure.
One of the most appealing aspects of micro-investing is how easy
it is to get started. Many platforms are designed to be intuitive
and user-friendly, taking the complexity out of choosing stocks
or managing a portfolio. Users don’t need to be financial experts
to start growing their wealth – they simply need to start small
and stay consistent. European embedded finance provider, Solaris
released a white paper highlighting the challenges wealth
management firms face as shifting demographics present new
demands and people grapple with an unstable job market and lower
salaries, and the opportunities embedded finance brings to
restore confidence and long-term growth through
digitalisation.
This growth potential empowers people, especially those who may
have previously felt that wealth-building was out of their reach.
Micro-investing helps create a mindset shift, showing people that
they don’t need to wait for a big windfall or a pay raise to
start building their financial future. By breaking down barriers
to entry, it opens up investing to a broader audience,
encouraging financial inclusion for everyone.
Encouraging consistent saving
Micro-investing doesn’t just help people grow wealth – it also
helps build good financial habits. Because users are often
encouraged to make regular, small contributions, they develop a
consistent saving habit without the stress of needing to set
aside large amounts at once. This “set-it-and-forget-it” approach
works well for people who struggle to prioritise saving but want
to invest in their future.
And, since most micro-investing platforms allow for automatic
transfers or roundups, users don’t even have to think about it.
The simplicity of the process reduces the mental barriers that
often prevent people from saving, making it an easy way to build
wealth over time. This consistency is key to financial success,
and micro-investing platforms are helping to instil it in their
users. Amazon Pay is a good example of this as they have
integrated BNPL options with zero to low interest, establishing
good habits and not putting pressure on the consumer to spend
more they can afford.
Investing in the future
Micro-investing isn’t just about helping individuals – it’s also
transforming how brands interact with their customers. Companies
are beginning to realise that by offering investment
opportunities or rewards tied to their platforms, they can foster
stronger relationships and promote brand loyalty.
One way this is happening is through “stock-back” programmes.
Some companies, such as Stash, allow users to earn fractional
shares of stock in the brands they’re already shopping with. For
example, if you buy a coffee at Starbucks using your Stash card,
you might earn a tiny fraction of Starbucks stock. Over time,
these small stock-back rewards accumulate, giving users a stake
in the brands they love. Walgreens are already doing this by
enabling shoppers to earn stock rewards on everyday purchases. So
next time you are buying bananas you are also investing in your
future.
This approach offers a double benefit, for both customer and
company. Users are investing and building wealth, while also
feeling more connected to the brands they’re buying from, and
brands incentivise. It creates a sense of ownership and loyalty
because customers now have a financial interest in the company’s
success. They’re more likely to continue shopping with these
brands and recommend them to others, creating a positive cycle of
brand engagement.
Deepening customer relationships
I know just how important it is to nurture relationships for
long-term prosperity. By offering investment options or financial
tools, brands can show that they care about their customers’
financial wellbeing. It’s not just about selling a product or
service; it’s about offering value that can impact their
customers’ long-term financial health.
For example, some fintech companies partner with major brands to
offer special investment incentives, such as matching a
customer’s first investment or offering discounts for frequent
contributions. These programmes demonstrate that the company is
invested in its customers’ success, fostering trust and loyalty.
Betterment partnered with Uber to provide drivers with access to
automated investment options and retirement planning tools.
What’s next
As micro-investing continues to grow in popularity, more
companies are likely to explore ways of integrating it
into their customer engagement strategies. With financial
wellness becoming an increasingly important priority for many
consumers, brands that offer micro-investing options can
differentiate themselves in a crowded marketplace. Solaris
reported that in Europe alone, embedded finance is expected to be
worth $42.24 billion by the end of 2024 and reach $126.99 billion
by 2029 – a compound annual growth rate of 24.6 per cent.
For individuals, micro-investing is opening up new pathways to
wealth. For companies, it’s creating opportunities to foster
loyalty and trust in a meaningful way. This combination of
financial empowerment and brand engagement is a win-win, with the
potential to reshape how people think about both investing and
consumer relationships. Micro-investing may have started as a
small idea, but its impact will be monumental, guaranteeing more
autonomy, more control, and sustainable growth. Don’t hesitate –
discover the wonders today.
About the author
Philipp Buschmann is a serial entrepreneur with extensive
experience of working in challenger banking, financial services,
IT and energy across the world. He took one of his businesses
public – Ignis Petroleum was publicly listed in the US and
Germany. His interests include behavioural economics. He holds an
MBA from the London Business School.