Embedded finance has moved beyond BNPL into a scale phase, according to a new report from UK bank Natwest.
Published by Natwest Boxed on September 2, the report ‘Embedded Finance: Success and shifting goal posts’ shows brands report stronger conversion loyalty as a result of integrating embedded finance tools.
Around 80% of UK brands averaging a revenue of £100m or more have improved their business outcomes, Natwest noted. However, rising support burdens and resilience concerns are reshaping provider choice towards compliance strength and customer excellence.
Natwest anonymously asked C-level executives across major UK consumer brands on the impact embedded finance has had to its customer payment journey and its overall brand.
These brands across the travel, retail, financial services and utilities sectors stated they had seen increases in customer conversion, increased basket size, and repeat purchases. The most common outcome was customer conversion rates, the process of a consumer completing its intended action or purchase when landing on a website or e-commerce site.
“Embedded finance has seen great success and still holds huge promise for growth. Consumer brands are seeing tangible benefits from its implementation—but with success comes bigger expectations, and our research indicates that providers need to step up to meet them,” said Andrew Ellis, CEO at NatWest Boxed.
The range of embedded finance capabilities
For non-financial businesses, embedded finance has become one of the most pivotal innovations of recent years. By integrating financial services directly into their platforms, brands are able to expand their offerings and adapt to changing consumer expectations.
NatWest Boxed’s research shows just how wide the possibilities are. While point-of-sale (POS) credit remains the most popular product, offered by 62% of those surveyed, savings accounts, insurance, and merchant wallets are also in demand – despite not being traditionally linked to embedded finance.
When asked to rank their needs from a provider, brands ranked customer excellence as the priority over operational and technical excellence. However, only 53% of brands said‘customer excellence’ applies to their current provider.
“Brands are looking to work with trusted embedded finance providers that can address customer, operational and regulatory challenges as they seek to scale and optimise their offerings,” said Ellis.
Growth is good, but businesses want more?
The growth of embedded finance among UK brands highlights its value in boosting customer satisfaction , but scaling remains a challenge.
According to NatWest Boxed, “brands have rightfully increased their expectations on embedded finance providers”. Nearly 90% of brands which launched an embedded finance product reported an increase in customer support enquiries, yet only 38% of brands said their embedded finance provider offered better support than what they already had in place.
Confidence in scalability is also mixed. Fewer than half of respondents (46%) believe their current provider could handle higher customer volumes without delays or downtime.
At the same time, businesses are waiting for the Financial Conduct Authority to introduce new BNPL rules; due in 2026, aimed at strengthening consumer safeguards around short-term credit loans.
While UK brands may have one eye on regulations such as the BNPL rules next year, NatWest Boxed concluded in its report, “this may require brands to seek reassurance regarding future compliance” from their embedded finance providers.
