Easier access to financial services in comparison to traditional banks is a key reason for 41% of Italian consumers turn to embedded financial services, according to a new study by Solaris and consulting firm Roland Berger. The ‘Disrupting the value chain for financial services - How to drive revenue growth with embedded finance’ study considered the views of 1600 consumers equally split across the four major European markets: Italy, Germany, Spain and France.
41% of Italian participants named product accessibility as the defining factor for using embedded financial services and products. This can be attributed to simpler applications and faster KYC (user verification) processes[MOU2] [AS3] : in particular, 75% of Italians are satisfied or completely satisfied with them.
That was ahead of 36% of respondents noting strong availability of embedded finance solutions at the checkout and 25% acknowledging improved user experience as well as 30% referencing attached benefits such as loyalty programs and payback schemes.
PREFERENCES OF EMBEDDED FINANCE IN ITALY: THE DEBIT CARD GUIDES ITS USE
The rise of cashless and cardless payment methods was prevalent in the types of embedded financial services that Italian consumers are currently using, with digital wallets accounting for 37%, ahead of credit cards 30% and online bank accounts 26%. Only debit cards (41%) are being used by more people than digital wallets. Interestingly, while buy-now-pay-later (BNPL) were noted by 18% of respondents across Europe, in Italy BNPL was by far the less popular embedded financial solution as acknowledged by 7% of those surveyed.
"The embedded finance market is increasing in maturity in Italy. Our study highlights that payment products, in particular such as debit cards, are a great chance for companies to integrate embedded financial products into their value proposition. This can satisfy the need for faster, safer and more attractive financial solutions that’s crucial for our partners' response to changing customer behavior”, commented Federico Roesler Franz, Managing Director of Solaris Italy. “These are products with which consumers are more familiar and, thanks to them, our partners can get to know their customers better and promote and reward customer loyalty”.
When asked what parameters would make a consumer more likely to use an embedded finance solution, more than a quarter (27%) cited that being able to obtain multiple products from one brand as a key factor, with digital wallets the most desired new product.
SECTORS AND CONCERNS OF EMBEDDED FINANCE BY ITALIANS
The study also revealed that more than half of Italian consumers (almost 60%) have used an embedded finance product from e-commerce businesses, followed by retail (27%) with travel (26%) and transport and mobility (37%). The research discovered that data security remains the largest area of concern in relation to taking out embedded finance products for 64% Italian consumers ahead of transparency (25%) and trust, as noted by a third (33%).
16-07-2024
written by Matteo Castelnuovo