Two-in-five European consumers will only stay loyal to brands that offer embedded banking products like Buy Now, Pay Later.

According to Aion Bank, 37% are more likely to use BNPL and flexible payment options due to the cost-of-living crisis.

Embedded finance increases customer engagement with brands for over a third (36%). Aion Bank reports such consumers return to that brand’s app or website between three- and five-times vs once a month.

Embedded banking adoption boosts brand loyalty

The Vodeno/Aion Bank research highlights how embedded banking adoption is significantly boosting brand loyalty for companies. Specifically, consumers are 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 reveals 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. This figure rises 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 brand loyalty. This is closely followed by a good selection of products (43%).

According to Aion, the availability of embedded banking products directly in the websites and apps is now impacting customer loyalty.

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BNPL boosts loyalty programme engagement

Two in five consumers say they will only stay loyal to brands that offer financial benefits like BNPL and cashback. This figure rises 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. It rises 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’. 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. Just under one quarter (23%) say they are more likely to recommend the brand to friends and family. The same number (23%) say they are more likely to spend money with the brand over competitors.

Kim Van Esbroeck, Country Head, Aion Bank Belgium and CRO Vodeno/Aion said“The benefits of embedded banking cannot be ignored. Our research offers strong evidence that consumers are not only using these products. It is also positivity influencing their loyalty to BaaS-enabled brands.

Competition for the consumer has never been fiercer, particularly in these difficult financial times. Brands that offer flexible payment and lending options provide more choice. This can boost consumers’ spending power when they need it most. Embedded banking is also making an impact on brand loyalty. 43% 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.”