Survey Findings: Consumer Adoption of Embedded Finance
A new independent survey from Vodeno/Aion Bank of 3,007 European consumers based in the UK, Belgium and Germany has found:
-
- Two in five European consumers will only stay loyal to brands that offer embedded banking products like Buy Now Pay Later (BNPL).
-
- 37% are more likely to use BNPL and flexible payment options due to the cost-of-living crisis emphasising the importance of embedded financial services.
-
- Embedded finance, including banking and financial services, increased customer engagement with brands for over a third (36%), those who said they return to that brand’s app or website between three and five times vs once a month.
New research from Vodeno/Aion Bank has revealed how embedded finance adoption is significantly boosting brand allegiance for companies, with consumers more likely to use embedded finance products from brands as a result of the cost-of-living crisis.
Research Insights: Financial Institutions’ Embedded Finance Solutions Drive Loyalty
The European Banking-as-a-Service (BaaS) provider’s study revealed that over a third (37%) are more likely to seek out brands that offer BNPL and flexible payment options due to the high cost of living, with this figure rising to 50% in the 25-34 age range. Competitive prices are cited as the most important factor to 44% of consumers when it comes to their brand allegiance, closely followed by a good selection of products (43%).
The results highlight that the availability of embedded finance solutions directly in the websites and apps of consumer brands is starting to make an impact on customer loyalty, with two in five (40%) consumers saying they will only stay loyal to brands that offer financial benefits like BNPL, embedded financial services and cashback, with this figure rising to 50% among 25-34-year-olds. When it comes to engagement with loyalty programs, just under half (46%) said they are more likely to use a brand’s loyalty card to make purchases if it included BNPL and business banking. This figure was highest amongst the youngest consumers surveyed, rising to 53% for those aged 16-24 and even higher still (65%) in the 25-34 demographic.
Shopping Habits: The Influence of Embedded Banking Products
When consumers were asked how often they shop with their favourite brands, 19% of respondents said ‘monthly,’ and a further 16% said ‘once every two or three weeks.’ However, among those who have used a brand’s embedded banking product, 36% said they return to that brand’s app or website between three and five times a month, with this figure rising to 43% among the 25-34 age group.
This increase in customer engagement can be attributed to the convenience and benefits offered by embedded finance. By integrating embedded banking services seamlessly into their platforms, brands provide customers with a streamlined and efficient shopping experience.
The ease of accessing BNPL options, flexible payment plans, and other embedded financial services keeps consumers coming back to the brand’s app or website, reinforcing the value of embedded finance. This trend reflects the growing importance of embedded finance in meeting the evolving needs of consumers and solidifying brand loyalty in the competitive marketplace.
Commercial and Loyalty Benefits
Vodeno/Aion’s research highlights the commercial and loyalty benefits of embedded finance from brands, with just under one quarter 23% saying they are more likely to recommend the brand to friends and family, while the same number (23%) said they are more likely to spend money with the brand over competitors.
Expert Perspective on Banking Services
Kim Van Esbroeck, Country Head for Aion Bank Belgium and Chief Revenue Officer for Vodeno/Aion said: “The benefits of embedded banking cannot be ignored, and our research offers strong evidence that consumers are not only using these products, but it is also positivity influencing their loyalty to BaaS-enabled brands.”
Innovative Financial Institution Empowers Customer Loyalty and Spending Power
Van Esbroeck adds that, “Competition for the consumer has never been more fierce, particularly in these difficult financial times, and brands that offer flexible payment and lending options provide more choice, which can boost consumers’ spending power when they need it most. Embedded finance is also making an impact on brand allegiance, with 43% of 25-34 year olds saying they shop more at brands that offer an embedded finance product. We have already seen how (Banking-as-a-Service) BaaS-enabled embedding banking is helping to innovate customer journeys, and it is clear the next area of disruption will be to supercharge brands’ loyalty programmes.”
