Research from Vodeno/Aion Bank has recently revealed just how embedded banking adoption is “significantly boosting brand loyalty for companies, with consumers more likely to use embedded banking products from brands as a result of the cost-of-living crisis.”
The European Banking-as-a-Service (BaaS) provider’s study “revealed that over a third (37%) are more likely to seek out brands that offer BNPL and flexible payment options due to the high cost of living, with this figure rising to 50% in the 25-34 age range.”
Competitive prices are “cited as the most important factor to 44% of consumers when it comes to their brand loyalty, closely followed by a good selection of products (43%).”
The results highlight “that the availability of embedded banking products directly in the websites and apps of consumer brands are starting to make an impact on customer loyalty, with two in five (40%) consumers say they will only stay loyal to brands that offer financial benefits like BNPL and cashback, with this figure rising to 50% among 25-34-year-olds.”
When it comes to engagement with loyalty programmes, just under half (46%) said they are more likely “to use a brand’s loyalty card to make purchases if it included BNPL.”
This figure was highest “amongst the youngest consumers surveyed, rising to 53% for those aged 16-24 and higher still (65%) in the 25-34 demographic.”
When consumers were asked “how often they shop with their favourite brands, 19% of respondents said ‘monthly’ and a further 16% said ‘once every two or three weeks’.”
However, among those who “have used a brand’s embedded banking product, 36% said they return to that brand’s app or website between three and five times a month, with this figure rising to 43% among the 25-34 age group.”
Vodeno/Aion’s research “highlights the commercial and loyalty benefits of embedded banking, with just under one quarter 23% saying they are more likely to recommend the brand to friends and family, while the same number (23%) said 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, and our research offers strong evidence that consumers are not only using these products, but it is also positivity influencing their loyalty to BaaS-enabled brands. Competition for the consumer has never been more fierce, particularly in these difficult financial times, and brands that offer flexible payment and lending options provide more choice, which can boost consumers’ spending power when they need it most. Embedded banking is also making an impact on brand loyalty, with 43% of 25-34 year olds saying 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, and it is clear the next area of disruption will be to supercharge brands’ loyalty programs.”
As noted in the update, Vodeno combines “a fully API-based, cloud-native platform with services based on an ECB banking licence and a team of banking experts via Aion Bank.”
Together, Vodeno/Aion are “uniquely positioned to offer comprehensive embedded financial services for banks, lenders and merchants across multiple sectors.”
Covering all areas of the banking ecosystem, from ‘smart contract enabled’ core banking to accounts, onboarding, payments, cards, investment and lending solutions, Vodeno/Aion offer the ability “to meet the demands of regulation while enabling innovation at speed.”
Vodeno and Aion Bank are “separate companies and backed by global private equity firm Warburg Pincus LLC.”