Banks racing to meet consumer demand for embedded finance

New research from Tuum finds soaring consumer demand for finance services like loans, BNPL and insurance – if made easily available at checkout.

  • Insurance on items like holidays or mobile phones (44%), ‘buy now, pay later’ (BNPL) options (42%), and loans on high-value items (39%) top consumer wish lists for embedded finance.
  • 53% of consumers who have considered taking out embedded finance products like insurance or BNPL ultimately opted not to due to complex processes, not being offered the option at checkout, and simply forgetting
  • Banks are alive to the opportunity, with 82% ranking embedded finance as an important additional revenue stream.

Next-generation core banking platform Tuum has published new data today that reveals significantly strong levels of consumer demand for embedded finance products. The survey highlighted a strong demand from consumers for services like insurance and loans at the checkout as opposed to sourcing separately, but only if the process of doing so is simple and straightforward. Banks are recognising this appetite too, with embedded finance cited by 82% as a new priority revenue stream. The study was carried by Sapio Research on 4,000 consumers and over 300 IT decision makers in financial services across France, Germany and the UK. 

Tuum’s research found 44% of consumers are likely to want to take out insurance on items like holidays or mobile phones at the checkout; 42% would like ‘Buy Now, Pay Later’ (BNPL) options, and 39% would be likely to take out loans for high value items. While most banks (63%) don’t currently offer these services, they do have it on their roadmap for the next twelve months, with 31% of these banks planning to have services ready to offer as a plug-in for third-parties to deliver to consumers within the next six months. 

For banks and service providers, the size of the opportunity is huge – an Accenture report estimates embedded banking could capture 26% of global SME banking revenue by 2025. Undeniably from Tuum’s data, however, the opportunity only comes alive if consumers are offered products in a clear, friction-free way. 40% of consumers have considered taking out either insurance, BNPL, or a loan but ultimately didn’t, with 22% of these saying the process was too complicated, 19% said it was because the service wasn’t offered to them, and 12% simply forgot. 

Commenting on the research findings, Tuum Co-Founder and Chief Banking Officer, Rivo Uibo said: “As consumer demand for easy, integrated finance options rises, this data confirms a trend we’ve been seeing for some time; banks rising to the challenge and changing their business strategy to position themselves as ‘infrastructure providers’ in addition to offering traditional banking services. By powering finance through consumer-facing third parties like retailers, banks can create new revenue streams and ensure they remain relevant. The savviest in the industry know the size of the technical lift this change entails, and next-generation core banking technology is growing in popularity as a means for banks to be able to support growth of embedded banking services .” 

The research also provides insight to banks, retailers, and service providers on embedded finance products consumers are most interested in. Interestingly, consumer demand aligns with banks’ product roadmaps too. Insurance tops the list of embedded services banks are planning to offer (47%), followed by being able to select the currency in the payment process (42%) and offering BNPL payment options (40%) and loans on consumer products (39%). Of the one in five banks already offering their technology and embedded finance capabilities to third-parties, insurance (76%), loans (67%) and BNPL (45%) also topped the most popular and lucrative services. 

Consumer demand for embedded finance 

  Insurance  Buy now pay later Loans 
Utilities  42% 45% 13% 
Consumer technology  34% 57% 9% 
Retail items  23% 68% 9% 
Wholesale items  28% 57% 14% 
Leisure activities  34% 51% 15% 
Travel  56% 32% 12% 
Cars and other vehicles  33% 23% 45% 

Tuum, formerly Modularbank, is a next-generation core banking platform provider. Its technology enables banks, fintechs and traditionally non-financial companies to roll out new financial products and services quickly and easily and empowers them to get involved in embedded finance.  Tuum is trusted by an ever-growing list of regulated banks and fintechs. Just last month, it announced it has been selected by fintech-focussed bank, LHV UK, to power the technology of its entire core banking operation. 


Tuum commissioned market research company Sapio Research to survey 4,000 consumers and 313 IT decision makers within financial institutions across France, Germany and the UK. The survey ran in February.

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