61 percent of Germans would prefer ecommerce-integrated embedded finance, study

The research analyses the market potential of this global trend, exemplified by the ecommerce industry in Germany. The term embedded finance refers to the integration of financial services into the product offering of non-banks and has gained an increasing relevance in recent years. The banking sector is undergoing a massive transformation process. As the financial industry opens through Open Banking, more and more businesses from outside the industry are entering the market and offering integrated financial services directly to their customers. The new challengers enjoy strong customer loyalty, have a large ecosystem, and cooperate with Banking-as-a-Service providers such as Solarisbank.

To calculate a concrete potential for the German market, the study analysed 21 leading ecommerce providers in terms of customer satisfaction and interaction rate, as well as conducting a representative survey of the German population. The high ecommerce adoption rate of 75% and widespread penetration in all demographics thus indicate the overall potential of embedded finance. The results showed that 61% of all respondents can imagine using an integrated financial service from at least one of the ecommerce providers listed. More than a quarter, for example, would be willing to open a checking account with Amazon. The US ecommerce giant is clearly at the top of the list of providers compared, but by no means an exception.

Compared to Europe, where embedded finance is still in its early stages, China and the US are already ahead, with large technology companies having embedded financial services into their ecosystems. Lightyear Capital estimates that the market for embedded finance will grow from around EUR 22.5 billion at present to around EUR 230 billion worldwide by 2025. Further, the financial investor Bain Capital estimates that embedded finance revenues will reach around EUR 3.6 trillion by 2030 in the USA alone.