As a result of the cost-of-living crisis, more and more people have turned to using embedded banking products. However, not all organisations have implemented the technology giving those that have an edge over the competition. Building upon this, Vodeno, the cloud-native Banking-as-a-Service (BaaS) provider, and Aion Bank, the licensed bank in Belgium, have found that customer loyalty has increased when embedded banking is used.
According to the study’s results, two in five (40 per cent) consumers have said they will only remain loyal to brands offering services like BNPL and cashback. The figure rises to 50 per cent among 25-34-year-olds. This stat shouldn’t come as a surprise. Over a third (37 per cent) of respondents are more likely to seek a brand that offers flexible payment options, including BNPL. Similarly, this stat also grows to 50 per cent in the 25-34 age range.
Due to the cost-of-living crisis, the top priority for many consumers has shifted from quality and variety of products to price. The survey found that 44 per cent of respondents’ brand loyalty is impacted the most by product prices. Meanwhile, 43 per cent state a good selection of products is the key factor for brand loyalty.
The use and value of loyalty cards have often been called into question. However, according to the study, consumers are more likely (46 per cent) to engage with them if they include BNPL. This figure was highest amongst the youngest consumers surveyed, rising to 53 per cent for those aged 16-24. It rises higher still (65 per cent) in the 25-34 demographic.
When consumers were asked how often they shop with their favourite brands, 19 per cent of respondents said ‘monthly’. A further 16 per cent said ‘once every two or three weeks’. However, among those who have used a brand’s embedded banking product, 36 per cent said they return to that brand’s app or website between three and five times a month. This figure rises to 43 per cent among the 25-34 age group.
Ensuring continued support
Vodeno/Aion’s research highlights the continued consumer growth and emphasises the commercial and loyalty benefits of embedded banking. Twenty-three per cent of respondents say they are more likely to recommend a brand to friends and family if a company offers these services. Additionally, the same number of respondents say they are more likely to spend money with the brand over competitors.
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. 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.
“Competition for the consumer has never been more fierce, particularly in these difficult financial times. Brands that offer flexible payment and lending options provide more choice. In turn, this can boost consumers’ spending power when they need it most. Embedded banking is also making an impact on brand loyalty. Forty-three per cent of 25-34 year olds say they shop more at brands that offer an embedded banking product.
“We have already seen how BaaS-enabled embedding banking is helping to innovate customer journeys. It is clear the next area of disruption will be to supercharge brands’ loyalty programmes.”