Embedded banking is on the rise in Europe, with 48% of large enterprises planning to adopt the service in the next three years.

Despite the fact that only 7% of large European organisations already offer digital services, the next three years look promising for embedded banking, as 48% of large enterprises plan to do so. The global Banking-as-a-Service (BaaS) platform OpenPayd releases its whitepaper after determining the number of firms utilising embedded banking services.

As of November 2023, one in five (20%) UK-based businesses provide embedded banking services. But in the ensuing three years, this percentage is expected to rise to 67%. While only 3% of German businesses presently provide embedded banking services, that number is expected to increase to 69% during the next three years. Additionally, according to research from OpenPayd, 50% of Italian, 46% of French, and 39% of Spanish businesses intend to provide embedded banking services within the next three years.

Crucially, every company polled had spoken with the BaaS platform about the idea, and many had given the tech’s adoption considerable attention. In the past two years, 57% have increased or improved their current product. Notwithstanding the economic crisis, 29% of respondents want to increase the scope of their offerings.

European companies believe that the tech’s offerings will have a significant impact on revenue growth in the coming year. Organisations typically predict a two percent increase in revenue in the first year, increasing to sixteen percent rise in five years. Over the next five years, European businesses anticipate that embedded banking will bring in an additional €297 billion in revenue.


Route for effectively developing a product

Building embedded banking products in partnership with a BaaS provider is the preferred approach for almost nine out of ten (89%) enterprises organising their launches. In addition, over two thirds (65%) of these businesses plan to create new internal fintech teams to collaborate with them.

Embedded banking services are already having an impact on European firms. “They’re setting the pace for adoption and experiencing material revenue growth,” stated Barry O’Sullivan, OpenPayd’s head of payments and banking infrastructure.

Additionally, a distinct function for BaaS providers as the IT projects’ facilitator is becoming apparent. That entails a great deal of duty and potential. To guarantee the success of its partners, BaaS providers must bring the necessary technology, licences, and compliance management.

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