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60% of UK adults have used embedded finance services in the past year - Temenos

60% of UK adults have used embedded finance services in the past year - Temenos

Research conducted by Temenos has concluded that two out of three adults have used embedded finance services during the checkout process online in the past year.

Temenos uncovered an explosion of growth around embedded finance trends in the financial industry in recent years in a recent whitepaper.

The study shows that four out of five adults (between the ages of 18 and 34) have used embedded finance services in the past year. This includes Buy Now Pay Later (BNPL) payments, rounding up at the checkout to donate to a charity, buying insurance with a high value item, taking out a loan at checkout, or e-wallet services such as PayPal and Google Pay.

Additionally, the report found that 42% of UK adults have used e-wallet payment methods in the last year, with 51% of those being between 18 and 34 years old. The increasing use of embedded payment methods suggests the convenience and user-friendly nature of embedded finance options in day-to-day shopping.

The report also covers the rise of open banking around the world, and the emergence of new business models to adapt to a changing digital ecosystem. According to Temenos, Banking-as-a-Service (BaaS) is altering the traditional approach to financial services by creating a protected, contexualised, end-to-end service for consumers.

Kanika Hope, chief strategy officer at Temenos, stated: "From retailers to airlines, ride-sharing apps and coffee chains, brands are embedding financial services into their online and mobile offerings to increase revenues, increase customer loyalty and gain deeper insights on their customers. The findings in this survey show that the use of these services is starting to gain real momentum, particularly among Gen Z looking for seamless and integrated online experiences in their daily lives. This presents new opportunities for incumbent banks as well as new entrants like the banking-as-a-service providers."

Embedded finance is being adopted by multiple big players to capitalise on the trend. However, in the wake of the rapid growth of alternative payment solutions comes regulation, and some forms of embedded finance, such as BNPL, are experiencing increased regulatory scrutiny.

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