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The need to travel to a bank branch to open a new account, with endless reams of paper to sign and documents to produce is a quickly becoming a thing of the past. New banking customers now expect to be able to open a new account digitally, when it suits them, from wherever they are and on the device of their choice.
Rapid adoption of digital services has been accelerated by three to five years as a result of the pandemic and there has been a rush to enable fast and secure digital customer onboarding across the financial services sector. This has been led by increasing online consumer adoption and as a reaction to the rise in challenger banks who are starting to dominate this marketplace. As a result of this, new online account opening is quicker and easier than ever before.
So why, if the creation of easy online registration flows has been a focus, is the rate of onboarding abandonment so high?
‘68% of customers abandoned an application in 2021’ – Signicat
The Need for Speed
In our increasingly online and mobile world, a user’s expectation of what constitutes an easy, friction-free and quick onboarding process is more than ever dictated by the needs of ‘time poor’ potential customers.
People are now conditioned to be able to sign up digitally for new products or services simply and quickly, with very little friction. They expect the process to be equally easy when dealing with their finances.
Abandonment Rate by Age Range
It’s clear to see that older demographics (who are used to an account application process taking time and effort to complete) are more likely to follow a digital onboarding process through, whereas Gen Z users are far more likely to abandon their application and move on to another supplier if the onboarding process doesn’t work in exactly the way they expected.
The key reasons for onboarding abandonment:
- Application processes are taking too much time
- Too much personal information is required
- There is a lack of fully digital options and instead customers have to visit a branch.
Information Gathering vs a Seamless User Experience (UX)
One of the key barriers that face the Financial Services sector when creating a seamless UX is the requirement from regulators to gather huge quantities of data about their prospective customers. This potentially lengthy process, often exacerbated by over-cautious compliance teams, can make the whole onboarding process 3 to 4 times longer than people experience when dealing with other industries.
A study by Built for Mars on digital account opening at banks in the UK states that it can take anywhere between 70 and 120 clicks to open an online account at a traditional bank.
Alongside this, inadequate identity verification during the onboarding process, through the use of inaccurate and inconsistent data sources can trigger manual reviews by the financial services provider in order for them to ensure that compliance measures have been met and to guard against potential fraudulent registrations. This causes a break and a delay in the onboarding process, so leading customers to abandon applications.
It’s clear that if financial services providers can’t deliver a fast, seamless and secure onboarding experience – and in particular, a mobile one – the potential customer will move on to another provider.
In fact, according to Forrester over 64% of banks reported lost revenue due to problems with their current onboarding processes.
The Multi-Layered Solution
Through the implementation of mobile data signals into the bank online registration journey it is possible to greatly enhance the onboarding experience, reducing the time and complexity to complete for the user whilst delivering the necessary secure verification of user and device required to satisfy the bank compliance team.
By overlaying some mandatory elements of the traditional onboarding process (such as supply/verification of passport or National ID) with mobile, digital services such as Mobile to Person Match (MPM) of name and address, Age Verification or Account Tenure, a bank can compare and match data sources and verify digitally that the user is who they say they are. By adding account takeover fraud flags (SIM Swap, Call Forward) the bank can verify that the registered user is in possession of their mobile device at the time of registration, adding further confidence to the process.
Layering these tools enables a simplified digital onboarding process that will increase the likelihood of customer engagement throughout the onboarding journey.
With the right solutions, banks can quickly and economically increase successful new customer acquisition and upsell more products and services to existing customers.
Sekura Mobile Intelligence is the leading global provider of direct mobile operator identity data. With coverage across 5 continents through our single standards-based API, we can provide a solution to your online customer onboarding needs.
Contact the Sekura Team today.