European consumers are more likely to be loyal to brands that offer buy now, pay later (BNPL) services and cashback options, according to a survey conducted by Vodeno and Aion Bank.
Approximately 37% of consumers surveyed were more likely to look for brands that offered BNPL services and other flexible payment opportunities. Additionally, 50% of consumers in the 25-35 age group have reported that they will remain loyal only to brands that offer BNPL and cash back.
“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 positively influencing their loyalty to BaaS-enabled brands,” Kim Van Esbroeck, Country Head for Aion Bank Belgium and Chief Revenue Officer for Vodeno/Aion, said in a prepared statement.
Embedded Banking Offers Convenience for Consumers
The cost-of-living crisis continues to weigh heavily on consumers worldwide. Inflation has played a major role in the crisis, with the cost of food, housing, electricity, and other essentials increasingly out of consumers’ reach.
Currently, traditional banks struggle to meet the immediate financial needs of consumers. The rise of embedded banking exemplifies the need for access to cash quickly and conveniently. This can already be seen via ride-share apps that allow car drivers to have immediate access to their funds after their customers pay them. That quick and easy access allows the drivers greater management of their funds.
For cash-strapped consumers, embedded banking grants access to easy, instant credit without waiting for approval or having to jump through the traditional banking loops to qualify.
What Banks Can Do to Get Onboard with Embedded Banking
Embedded finance will continue to grow. It offers a seamless consumer experience and greater financial access. To remain competitive, banks must hone a strategy to adopt embedded finance as part of their own business model. They can do so by constructing their own digital ecosystem that can include partnerships with fintechs, e-commerce players, and digital platforms.