Dr. Manuel Thomet, Associate Partner at Synpulse: Did Switzerland reach the embedded finance tipping point?

In this podcast episode, Lars Markull interviews Dr. Manuel Thomet, Associate Partner at Synpulse, about the first comprehensive study on Embedded Finance and Banking as a Service in Switzerland. The discussion covers key findings, market trends, and future predictions for the Swiss financial landscape.

Key Findings from the Swiss Embedded Finance Study

• Over 75% of Swiss consumers have used embedded finance offerings at least once

• The tipping point has been reached in three out of five banking service areas: payments, pensions, and investments

• Neobanks are the embedders with the greatest attraction for consumers, followed by digital platforms and SaaS providers

• More than 35% of Swiss banks are expanding their business model portfolio with Banking as a Service (BaaS)

Challenges and Opportunities for Swiss Banks

• Implementing BaaS requires changes in mindset, culture, organization, and technology

• 90% of banks see cultural challenges as significant in adopting BaaS

• 64% of banks perceive technological challenges in implementing BaaS

• Swiss banks are generally more reluctant to adopt BaaS due to their heritage in private banking

Future Predictions for Embedded Finance in Switzerland

• Short-term (1-3 years):

  • Increased understanding of embedded finance as a strategic opportunity

  • Shift in discussion from open finance to embedded finance

  • Growth in consumer adoption, especially in payments and SME lending

• Long-term (5-10 years):

  • Adoption shift towards digital platforms and traditional firms

  • Embedding financial services will become the new normal

  • Increased competition among banks offering BaaS

  • Technology will become vital for scaling BaaS profitably

Conclusion

The Swiss embedded finance market is poised for growth, with opportunities and challenges for banks and non-financial brands. As adoption increases and technology evolves, embedded finance is set to reshape the financial services landscape in Switzerland.