Across all European markets, 37 percent of the consumers we surveyed who have used BNPL have used it from a non-bank provider, while 47 percent have used this option from a traditional bank (but not always their home bank).

Key takeaways

The transformation needs to accelerate. The goal for banks must be to develop end-to-end digital capabilities across all products, making them intuitive and easy to use while offering new services to compete with digital native neobanks. Progress needs to be quicker and not just for simple journeys such as opening a current account.

Face-to-face advice remains essential, particularly for more complex products such as mortgages and wealth management. Despite the shift to digital, personal interaction is still highly valued. There will always be moments when FAQs and chatbots can’t help customers and where a face-to-face discussion is crucial, either in a branch, reviewing their role and model, or via a video call.

Embedded finance is becoming more important. Consumers are embracing the convenience and simplicity of embedded finance options, such as BNPL. The seamless access to financial services as part of the digital shopping experience will continue to fuel their growth. Retail banks will need to take a clear position on if and how they will participate in this growing field and better focus their strategies on open banking, leveraging the level of trust with their customers. As part of improving the customer experience, embedded finance allows for better monetization of financial products, which can aid the stagnating topline results of retail banks.

The risk of disintermediation is real and growing. Despite the importance of personal interactions, the rise of embedded finance and the continued growth of price comparison websites pose a threat to banks’ traditional role in the ecosystem—with both the ownership of their customer relationships and revenue streams at risk, particularly amid the ongoing growth of digital adoption and e-commerce.

Banks have already made a commitment to becoming digital first, in terms of both customer interactions and daily operations. However, considering the continuous pressure on costs, they will need to smartly prioritize their digital investments, understanding which part of the customer journey should be fully digital. Also, the role of the advisor—either in person or remote—must be managed thoughtfully within future operating models.

Your industry

Your needs

About us

Careers

Insights

Your industry

About us

Careers

Insights