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.