Banking and payments are set to become a big part of ecommerce customer journeys as Banking-as-a-service (BaaS) businesses across Europe look at new ways to make payments easier and more embedded into purchasing.
According to a study by Vodeno/Aion of more than 1000 senior decision makers in the UK, the Netherlands and Belgium, seamlessly embedding financial services into customer experience can increase revenues, up average orders and increase loyalty.
However, many retailers say that BaaS providers don’t fully understand retail journeys and need to do more to help retailers realise their full potential.
24% of businesses said that they would like to see their BaaS provider showing a better understanding of their customer journey. Innovating the checkout experience is the key desired outcome for many BaaS adopters. Previous Vodeno/Aion research highlighted businesses that implemented embedded financial products were motivated by new revenue streams (41%), growth in customer basket (40%) and enhanced customer loyalty (40%).
Business leaders offered several predictions for the growth of the BaaS market. Most (59%) expect the lines between eCommerce platforms and traditional banking services to blur this year as a result of increased BaaS adoption. Even more (65%) expect to see more consumers using banking services via non-financial brands enabled by BaaS, rather than traditional banking. A further 60% predict a decline in traditional branch-based banking.
At present, 39% of respondents have already implemented BaaS services and products, with an additional 38% considering using BaaS in the new year. When surveyed about which BaaS products were planned for implementation, foreign exchange (48%), buy now, pay later (48%), SME lending (47%), and loyalty schemes (46%) were among the most popular.
Of the respondents who have not implemented BaaS solutions to date, 32% said they do not know enough about BaaS, 29% said there is a lack of understanding about the products available, and 27% cited compliance and security concerns as a key barrier to adoption.
Looking to the future, almost two-thirds (65%) of those surveyed about industry trends predict that more Big Tech firms will move to deliver financial services, and over half (56%) believe the cost-of-living crisis will act as a catalyst for increased adoption.
Wojciech Sobieraj, CEO of Vodeno, says: “Platform banking – where financial products are embedded in the customer journeys of brands people use every day – is the future. We know that companies looking to implement BaaS also want care-free products and services, with the technology, necessary licence and regulatory checks offered in one combined solution. At Vodeno, we are leading the European BaaS sector on the front, with a comprehensive range of BaaS products alongside access to a full ECB licence and the compliance expertise that comes with a European bank.”