Millennial and Gen Z consumers are shifting from traditional banks to their trusted brands when it comes to buying financial products, according to research by Vodeno/Aion Bank.
Vodeno/Aion Bank, a European Banking-as-a-Service (BaaS) provider, conducted a survey between 16-22 May 2023 among 3,007 European consumers across the UK, Belgium, and Germany.
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The study found that 52% of individuals aged 25-34 said that using financial products from their favourite brands is more convenient than relying on traditional banks. Similarly, 52% feel that brands offer financial products better tailored to their specific requirements compared to traditional institutions, with 51% stating that brands are making banking more accessible.
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According to Vodeno/Aion Bank’s research, 25% of those aged 25-34 prioritise convenience when choosing their favourite brands for banking, increasing to 45% among those aged 35-44.
Furthermore, 35% of the 25-34 age group have used embedded banking products due to attractive rates offered by brands. In the current economic climate, 37% of all European consumers are more inclined to seek out brands that offer Buy Now, Pay Later (BNPL) and flexible payment options, with this percentage notably higher among those aged 25-34 (54%) and 16-24 (44%).
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By GlobalDataAdditionally, 50% of the 25-34 age group will remain loyal to brands that provide financial benefits such as BNPL and cashback. The youngest consumers surveyed are more likely to use a brand’s loyalty card for purchases if it includes BNPL, with 65% in the 25-34 group and 53% in the 16-24 group.
When asked about their shopping habits with favourite brands, 19% of respondents shop monthly, and another 16% do so every two to three weeks. Among users of a brand’s embedded banking product, 36% return to the brand’s app or website three to five times a month, with this percentage increasing to 43% among the 25-34 age group.
Kim Van Esbroeck, Chief Revenue Officer at Vodeno, said: “Millennials and Gen Z are charting a new financial course, and increasingly relying on embedded finance products from their favoured brands for their banking needs. Our survey paints a clear picture as to why: convenience, tailored solutions and accessibility are the cornerstones driving this transformation.
“For brands, the case for embedded finance is clear. Not only can they offer their customer greater choice with different banking products, but in doing so they create a better customer experience with new revenue streams.”
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). Aion has an ECB banking licence.
