Research from ClearBank reveals that large UK businesses now view embedded financial services as a strategic boardroom decision and business growth driver. The research report released by ClearBank examines the attitudes of 200 senior business professionals at established UK-based corporates towards embedded finance as well as the potential for payments, accounts, and lending to enable various services, different revenue streams, and improved customer loyalty.
It revealed that despite enthusiasm for embedded finance’s potential to deliver these services, many companies ar “still held back by “fears of regulatory requirements, technical complexity, and ongoing concerns around finding the right partner to deliver at scale.”
Implementing embedded finance has moved from somewhat of a niche innovation to a strategic boardroom decision. Survey results found that “38% of C-suite leaders cite embedded finance as important for their company’s growth, reflecting the shift in mindset from viewing it as a back-office payments tool to a driver of competitive advantage.”
Importantly, nearly half (48%) of corporates surveyed see embedded finance as a way to improve payments and “launch new revenue-generating services.”
These services range from offering own brand accounts “to saving tools and lending services.”
For many, the potential increase in revenue is compelling, with “more than a quarter (28%) of the view that embedded finance could help drive double-digit revenue growth for their business. 67% believed growth would be at least 5% and just over a third (39%) suggest between 5-10% of revenue growth.”
Cross-sector growth: firms across consumer products and services, retail and healthcare sectors “have most demand for embedding financial services.”
While embedded finance has typically been associated “with the retail sector, interest is growing across various other sectors.”
Research revealed that demand was highest in “consumer products and services (23%), retail (20%) and healthcare (18%), with the likes of the payroll and travel industries increasingly seeing the potential to integrate financial services into their customer journeys.”
Of those firms surveyed that said they are considering offering embedded financial services within their platforms, payment services “were most considered (16%), followed by insurance (13%) and lending (13%).”
This signals a structural change in non-financial companies as they “look to add layers of value and deepen engagement and loyalty with customers.”
Untapped potential: only 19% have launched “embedded finance services, with challenges slowing progress.”
Although demand for embedded finance is growing, overall adoption is still maturing. Three-quarters (75%) said they would “offer embedded finance today if it were easy to implement.” This gap between intention and reality underlines the perception that embedded finance is still “difficult to employ and highlights the need for a new type of partner to tackle practical obstacles before broader uptake can occur.”
When questioned about the obstacles corporates faced, some companies pointed to the technicalities of setting up this type of offering “in terms of integration challenges (61%), regulatory compliance (49%) and lack of technical expertise (44%).”
Beyond the technical challenges, businesses also identified reputational and regulatory risks like greater regulatory scrutiny (57%), a loss of customer trust (52%) with reputational damage in case the service actually fails (65%).
Collectively, these figures suggest that while embedded finance is seen as a growth enabler, corporates remain fairly cautious. Success will ultimately hinge not only on showcasing the revenue potential but also on lowering risks during implementation by offering resilient infrastructure, more regulatory clarity, and a quick integration path that enables businesses to move decisively from intent to action.
For many corporates, embedded finance is described as being the first and foremost aspect when it comes to strengthening customer relationships.
More than half of companies or 63% indicated that the opportunity to deliver a more seamless experience is meaningful, positioning embedded finance as a customer service differentiator and a commercial driver. Another (57%) saw offering embedded services as a way of boosting customer loyalty by creating key touch points.