Cost-of-living pressures drive consumer adoption of embedded banking, fuelling brand loyalty

A brand new unbiased survey from Vodeno/Aion Bank of 3,007 European shoppers primarily based within the UK, Belgium and Germany has discovered:

• Two in 5 European shoppers will solely keep loyal to manufacturers that provide embedded banking merchandise like Buy Now, Pay Later (BNPL)
• 37% are extra doubtless to make use of BNPL and versatile fee choices because of the cost-of-living disaster
• Embedded finance elevated buyer engagement with manufacturers for over a 3rd (36%), who stated they return to that brand’s app or web site between three and 5 occasions vs as soon as a month

New analysis from Vodeno/Aion Bank has revealed how embedded banking adoption is considerably boosting brand loyalty for firms, with shoppers extra doubtless to make use of embedded banking merchandise from manufacturers in consequence of the cost-of-living disaster.

The European Banking-as-a-Service (BaaS) supplier’s research revealed that over a 3rd (37%) usually tend to search out manufacturers that provide BNPL and versatile fee choices because of the excessive price of dwelling, with this determine rising to 50% within the 25-34 age vary. Competitive costs are cited as crucial issue to 44% of shoppers with regards to their brand loyalty, intently adopted by a wide selection of merchandise (43%).

The outcomes spotlight that the provision of embedded banking merchandise straight within the web sites and apps of consumer manufacturers are beginning to make an influence on buyer loyalty, with two in 5 (40%) shoppers say they may solely keep loyal to manufacturers that provide monetary advantages like BNPL and cashback, with this determine rising to 50% amongst 25-34-year-olds. When it involves engagement with loyalty programmes, just below half (46%) stated they’re extra doubtless to make use of a brand’s loyalty card to make purchases if it included BNPL. This determine was highest amongst the youngest shoppers surveyed, rising to 53% for these aged 16-24 and better nonetheless (65%) within the 25-34 demographic.

When shoppers have been requested how usually they store with their favorite manufacturers, 19% of respondents stated ‘month-to-month’ and an additional 16% stated ‘as soon as each two or three weeks’. However, amongst those that have used a brand’s embedded banking product, 36% stated they return to that brand’s app or web site between three and 5 occasions a month, with this determine rising to 43% among the many 25-34 age group.

Vodeno/Aion’s analysis highlights the industrial and loyalty advantages of embedded banking, with just below one quarter 23% saying they’re extra more likely to advocate the brand to family and friends, whereas the identical quantity (23%) stated they’re extra more likely to spend cash with the brand over opponents.

Kim Van Esbroeck, Country Head for Aion Bank Belgium and Chief Revenue Officer for Vodeno/Aion stated:“The advantages of embedded banking can’t be ignored, and our analysis gives sturdy proof that buyers aren’t solely utilizing these merchandise, however it’s also positivity influencing their loyalty to BaaS-enabled manufacturers.

Competition for the consumer has by no means been extra fierce, notably in these troublesome monetary occasions, and types that provide versatile fee and lending choices present extra alternative, which may increase shoppers’ spending energy after they want it most. Embedded banking can be making an influence on brand loyalty, with 43% of 25-34 12 months olds saying they store extra at manufacturers that provide an embedded banking product. We have already seen how BaaS-enabled embedding banking helps to innovate buyer journeys, and it’s clear the subsequent space of disruption will likely be to supercharge manufacturers’ loyalty programmes.”