The embedded economy
Why brands are embracing financial services as a driver for innovation and growth
Embedded finance in the UK is experiencing rapid growth. But which services are brands looking to embed, why and when?
This research report reveals where senior decision-makers at leading corporates see the most significant gains, how they’re tackling embedding financial services into their business and any potential barriers to uptake.
82% are familiar with the concept of embedded finance
Understanding across seniority and responsibilities was broadly similar, although more C-level respondents (30%) were very familiar with the concept, compared to senior leaders (20%).
78% believe embedded services will unlock new revenue streams
More than a quarter of senior leaders (28%) estimate they could help drive double-digit revenue growth for their business. A further 39% predict a 5-10% revenue growth from embedded finance initiatives within three years.
64% say improving customer experience is critical
The primary motivators for launching embedded services were improving the customer experience (63%), enhancing customer retention and loyalty (57%), and creating new revenue streams (55%).
76% view implementation as the biggest potential barrier
Many senior leaders would offer embedded finance today if implementation were more straightforward. The reasons for this concern are varied, with 61% stating technical integration is their biggest challenge, followed by regulatory compliance (49%) and a lack of internal expertise (43.5%).
Banking for businesses with bold ideas
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“The priority is embedded finance driving growth. So, acquiring customers, offering great solutions, offering more selection, while also offering greater convenience to the customer.”
“We're not planning to be a bank ourselves. So, we are looking into trusted partners and leaders to provide the services to us and through us to the final consumer. And for consumers to be able to trust us.”
“Traditional banks give you a good brand halo and risk expertise. That's the good part. But the cycles are killing us: their integrations are slow, and the slower development cycle has consistently been the problem.”
“We expect returns of around 5% to 6% for the next year from embedded services and progressively 10% a year after, and then 15% to 20% in year three.”
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