Temenos study shows growing popularity of embedded finance services

Thursday 7 July 2022 13:51 CET | News

A research conducted by Temenos has shown that, in the last 12 months, three in five Brits have used embedded finance services as part of the checkout process when shopping online.

Over the years, the popularity of online financial offerings provided by non-financial companies has grown, being more and more available. These proposals include e-wallets (which have been used by 42% of UK adults in the past 12 month), Buy Now, Pay Later (BNPL) solutions (which have been used by 17% of people).

Being part of a particularly new market that is continuously changing, embedded finance services are popular amongst the younger generations. The research conducted by Temenos shows that four people withing the 18-34 age bracket have used one of these services at least once in the past year.

According to Temenos, brands are starting to embed financial services into their online and mobile offerings in order to increase revenues, increase customer loyalty, and gain deeper insights on their customers. This represents new opportunities for incumbent banks and even relatively new entrants such as Banking-as-a-Service (BaaS) providers.

Defining embedded finance and BaaS

Defining embedded finance and BaaS

In the present, banking is starting to get subsumed into cross-industry digital ecosystems through BaaS models. BaaS offers a different approach to financial services, accelerating the democratisation of banking and its transformation into a platform economy.

The model helps the end-customer benefit from the provision of banking and financial services into a personalised end-to-end customer journey designed to address their unmet need, delivered at the appropriate touchpoint with real-time, intelligent, and contextual experiences.

As found by the study conducted by Temenos, 76% of respondents say that they are more likely to use BaaS as a route to market since COVID-19. Moreover, 80% of respondents say BaaS is a way to extend reach into new geographic and a majority of 92% of respondents say BaaS is a faster way to bring products to market than building in-house.

E-wallets and BNPL

E-wallets and BNPL
e-wallet and bnpl

The concept of consumer credit and instalment loans, BNPL, embeds into the buying user experience, changing the economics of traditional lending from lending spreads taken from customers to earning commissions from merchants.

The research conducted by Temenos shows that from those who have checked out using an e-wallet, 72% do so at least once a month, with speed (66%) and security (40%) viewed by users as the most appealing factors.

According to the Temenos survey, which involved 2,000 people, 54% of UK BNPL users claim that the fast to use nature of BNPL attracts them to the service, the most commonly cited benefit, followed by its user-friendliness (31%), and that they recognise and trust the brand they are interacting with (30%).

However, with inflation and the rising cost of living, affordability and responsible lending are growing concerns, and legislation is imminent in the UK. 

More: Link

Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: embedded finance, Juniper Research, checkout optimisation , online shopping, financial services
Categories: Banking & Fintech
Companies: Temenos
Countries: United Kingdom
This article is part of category

Banking & Fintech


Discover all the Company news on Temenos and other articles related to Temenos in The Paypers News, Reports, and insights on the payments and fintech industry: