The Battle to Onboard 2020: The impact of COVID-19 and beyond

What’s the state of onboarding in Europe?

• Norway has the highest rate of reported application abandonment at 70%; Belgium has the lowest at 53%.
• Finland and Netherlands consumers seem to find it easiest to onboard, with only 23% reporting difficulty, compared with 33% in Norway.
• Sweden has the lowest tolerance for lengthy applications: 59% of consumers would abandon a process that took longer than 20 minutes.

Is the industry regressing?

• There is still no overall indication that onboarding is improving for traditional banks
• This is despite lots of noise around the increasing levels of digital investment, focus on customer experience and the widespread adoption of federated eID schemes.
• ‘Difficult and painful’ In 2019, just under a quarter of people rated their last application for a financial product somewhere between difficult and painful.
• In 2020, this has risen to just over a quarter.

Has COVID-19 changed onboarding expectations?

• 41% of consumers found themselves unable to access essential financial services during the pandemic, due to inaccessibility or digital unavailability.

Consumers now respond to financial services providers who don’t offer 100% digital onboarding with frustration, concern, and abandonment.

• “This is 2020 — why isn’t everything digital?” (20%)
• “I’m worried for their business” (22%)
• “They’re going to lose my business.” (14%)

How do generations differ — including Gen Z?

• Traditional banks in particular have worried about “digital natives” before, but now that Gen Z is economically active, they have a greater effect on customer acquisition than Millennials ever did.
• 41% of 18-24-year-olds considered their last financial application to be difficult, compared to just 16% of 55-64 year-olds.
• Gen Z will be followed by Gen Alpha, who will belong to a world of 5G, AI, machine learning and IoT. Constant innovation will be a prerequisite to survival in the evolving financial services ecosystem.

Trust in banks is high—but is it enough?

• Financial service providers remain the benchmark for trust, for now...
• Almost 3 in 5 consumers across Europe use their bank login for other services if they’re able to do so, and three quarters would trust using a bank identity to log in into other services.
• But, among Gen Z trust remains considerably lower (47%) than with 45-57 year olds (75%) and is almost half of those aged 65+ (86%).
• Gen Z (22%) and Millennials (21%) are more likely to abandon onboarding if they are asked for too much detail, compared to the less concerned over-65s (10%).

What’s the future of onboarding and digital identity?

• The majority of people want, and expect, digital identities that they can reuse and that banks have a central role to play in providing them.
• Over half would expect to use their bank digital ID more widely while only 12% say they would not.
• Additional uses for the bank digital ID include health services and online voting, but - interestingly - not online dating.

Is this the end of ‘learned helplessness’?

• Despite continual investment, consumers report the same level of dissatisfaction with onboarding. Their actions suggest they have run out of patience.

Three factors are working together to create this overall effect:

• New mobile-first fintechs are now widely used, often as a first choice rather than a backup. Their onboarding is far better, and other traditional bank providers are simply failing to keep up.
• The COVID-19 lockdown has meant that a poor onboarding experience, including a requirement for branch visits, is no longer acceptable.
• Gen Z has become financially active and simply won’t tolerate a poor onboarding experience. New to the market, they present high-volume acquisition opportunities and are being courted extensively by new challenger brands with 100% mobile onboarding.