Growing Consumer Adoption of Embedded Finance in Singapore Paves the Way for Future Innovation, FIS Research Finds

New research from FIS® (NYSE: FIS), a global leader in financial services technology, shows how adoption of embedded finance services has reached mainstream use in Singapore, across generations and across use cases. Embedded finance is when consumers have unique, tailored financial services delivered to them at the point of need by non-financial companies. Most common today, consumers use embedded finance in the form of in-app payments, Buy Now, Pay Later (BNPL), spare change investing, or insurance as part of the checkout experience. The recent survey from FIS asked Singaporean consumers about their experience with four instances of embedded finance in the past 12 months:

• Embedded Payments: A majority of respondents (86%) have paid for goods and services within a brand’s app, with 35% saying they pay this way at least once a month. o Embedded Lending: Almost half (49%) of respondents told FIS they have used Buy Now, Pay Later (BNPL) services.
•  Embedded Insurance: 46% of respondents stated they have purchased insurance directly from a merchant, such as for air travel.
• Embedded Investing: 7% of respondents stated they used spare change investing frequently as part of an embedded finance experience
• Key drivers behind adoption showed convenience and speed for uptake in embedded payments, insurance and investing, while affordability ranked high for embedded lending use. • Younger generations said they are more open to new and innovative financial services experiences than older counterparts. 23% of Millennials perceived themselves as early adopters versus just 9% of Boomers.

The Future of Embedded Finance

•  The emerging metaverse will be a key space driving embedded finance by enabling consumers to transact seamlessly across the virtual and real worlds.
• Singapore consumers plan to access the metaverse for a variety of purposes in the next 12 months—shopping (44%), gaming (27%) and socializing (27%) being the most common.
• Based on key findings in the FIS survey, there are some key hurdles to overcome that could facilitate greater adoption of embedded finance.
•  Concerns over fraudulent transactions and data security ranked as the top two reasons for not engaging in embedded payments, lending and investing.
• The desire to engage from a traditional financial institution was the top reason consumers did not purchase insurance via an embedded experience.
• 25% of those that did not engage or do not plan to engage in spare change investing cited a lack of familiarity with spare change investing services to be their top reason.

“BNPL, in-app payments and other instances of embedded finance may feel invisible to consumers because they are so seamlessly blended in our everyday experiences, but this delivery model is quietly revolutionizing the way Singaporeans engage in financial services,” said Kanv Pandit, Group Managing Director, APAC, Banking Solutions at FIS. “While our research showed older generations consider themselves more conservative about new technology, it is remarkable to see how broadly consumers are adopting these novel financial experiences. We believe the market is primed for further adoption of embedded finance experiences and new use cases will continue to proliferate. FIS has been investing in these capabilities so that businesses of all types can embed the right financial products and services at the right time, across multiple channels. There’s immense potential for innovation in this region and Singapore will do well serving as a launchpad for the wider Southeast Asia.”