Sometimes, exchanges create a single wallet account, and use it to receive transfers of all their users. They need a way to distinguish between different users, and know who sent what fund to credit the correct account on their database. Memo is used here, and they assign a separate number to each user and ask them to use it when they transfer funds. Then they use this number to find the owner.

The other approach is to create a separate wallet for each user. This way, there is no need for a memo and privacy is improved, but it's harder to implement.