By By Kim Van Esbroeck, Chief Revenue Officer for Vodeno/Aion
Today, a significant transformation is taking place in financial services, where the brands that we visit everyday are able to offer useful banking products directly to their customers, and it appears that millennials and Gen Z consumers have taken notice.
To learn more, Vodeno/Aion Bank commissioned a survey of more than 3,000 European consumers from the UK, Belgium, and Germany to understand the new relationship between customers and the brands who are adding financial services to their ecosystems.
How Brands Are Changing How We Bank
One of the standout findings from the research is that 52% of 25-34-year-olds preferred using financial products and services from their favourite brands over traditional banks.
51% of respondents in this age group believe that brands are making banking more accessible, while a similar number (52%) of individuals in the same age range feel that brands offer financial products better tailored to their specific needs compared to traditional institutions.
These results demonstrate a major shift in how young consumers engage with financial services and how they view traditional banking, but what is driving the trend?
Why Brands Are Gaining Popularity
With the help of Banking-as-a-Service (BaaS) providers, brands today can offer their own financial products directly to consumers, which presents a host of new opportunities for these brands to offer a better, frictionless customer journey.
The study further revealed that convenience is a significant factor driving this shift in consumer behaviour; 25% of respondents aged 25-34 stated that convenience is the primary reason they go to their favourite brands for banking, rising to 45% among those aged 35-44.
Furthermore, 35% of respondents in the 25-34 age group have used embedded banking products because the brand offered them attractive rates. While ease of use is an important element of convenience, adding tangible value is also impactful, especially at a time when the cost of living is high for many.
Flexibility is also having an impact, with 37% of those surveyed expressing a preference for brands that offer Buy Now, Pay Later (BNPL) and flexible payment options, rising to 44% for those between 16-24 and to 54% for those aged 25-34. Additionally, 50% of respondents in the 25-34 age group stated that they would remain loyal to brands that provide financial incentives such as BNPL and cashback.
Using a brand’s loyalty card to make purchases that include BNPL is also popular, with 65% of those aged 25-34 and 53% in the 16-24 age group opting for this choice.
A New Financial Landscape
Millennials and Gen Z consumers are at the forefront in embracing financial services from their favourite brands. For businesses, incorporating financial services into their offerings presents a compelling proposition for brands as a path to increase engagement, conversion and repeat visits. By providing a diverse range of banking products to their customers, brands not only expand choice but also elevate the overall customer experience, all whilst cultivating brand affinity and loyalty.
About the author
Kim Van Esbroeck is Chief Revenue Officer for Vodeno/Aion. Kim is responsible for growing Vodeno/Aion’s business through commercial activities and business development. Aion Bank and Vodeno are commercial partners offering embedded banking services in Europe, combining Vodeno’s API-based technology with financial products based on Aion’s ECB licence and regulatory and compliance expertise. Together, Vodeno/Aion are uniquely positioned to offer comprehensive embedded financial services for banks, lenders and merchants across multiple sectors.
About Vodeno and Aion Bank: Vodeno combines a fully API-based, cloud-native platform with services based on an Aion’s ECB banking licence. 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, with additional investors NatWest Group and EBRD (European Bank for Reconstruction and Development).
For more information: https://vodeno.com/
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