Findings from digital ID service provider Signicat have revealed that EU customers are predominantly unhappy with the onboarding process of financial applications.
The fifth edition of the “Battle to Onboard” report serves as a podium for over 7600 consumer voices across Europe, spanning from the Mediterranean Sea to The Nordics. The research is a collective showcase of last year’s average user experiences with financial service onboardings.
Regardless of innovations being brought frequently into the sector, financial applications are exhibiting the highest abandonment rates since Signicat initiated the research back in 2016. Results point to 68% of customers departing from the applications in 2021, up from 63% in 2020.
“A record number of consumers have abandoned financial service applications in the last year which is a wake-up call to the industry. The solution however isn’t simple,” said Asger Hattel, CEO, Signicat.
Going into more details, Signicat identified three main reasons that drove customers away from financial onboardings – the time needed to complete an onboarding journey, the volume of personal data required by solution providers, and people simply changing their minds over time, all of which interestingly share the same amount of respondents at 21% choosing either option.
While two of these can be dealt with in some creative way or another, the shared opinion on the amount of personal information requested being superfluous is surprising to say the least and will prove difficult to conciliate.
Measures are in place to protect the customer’s best interest in terms of security, while the industry pours hefty investments into staying on top of KYC and AML regulations. Signicat however noted that the process of IDing customers differs between financial service providers, some of which unfortunately lacking digital compatibility or fail to consider local market nuances, eventually creating a poor user experience.
“While digital identity makes onboarding quicker, this better experience makes for higher expectations from consumers—and increased abandonment if these are not met,” added Hattel.
On that note, the report presents the so-called ‘expectation paradox’ – countries where more advanced digital identity schemes such as BankID have been deployed do not necessarily host consumers that are less likely to abandon an application. On the contrary, statistics show that users in mature markets are more demanding and exhibit less patience with bad user experiences than those using financial applications in less developed markets.
“The key to creating a better onboarding experience is an in-depth knowledge of the market, an understanding of consumer behaviour and the ability to offer multiple onboarding methods,” Hattel concluded.
Expert Analysis: The focus and importance on efficiency and seamlessness within the payment journey has recently increased at a rapid rate. This focus is undoubtedly something that should be mirrored by the AML and KYC strategy of larger financial institutions if they are to maintain positive customer retention.