Banks must sharpen up their onboarding process if they are to retain the lionshare of customers.
Our Battle to Onboard research from 2018 has revealed that more than 50% of people abandon a financial services onboarding process. The reasons being that it took too long (34%) and needing too much personal information (40%).
I would expect that number to be closer to 15-20%, you’re losing nearly half of your customers before they’re even your customers.
Traditional banks view onboarding in a binary fashion – you’re either onboarded or you’re not. They’re used to a model where you ask for everything up front.
I believe that banks are “extremely risk averse” and reluctant to have a non fully KYCed individual in their system.
But this is an area that I think must change considering the high onboarding abandonment rate. I encourage them to view it as a step up model and make it easier to get a foot in the door and get the relationship going. You gradually ask the customer for more information – this is what a lot of newcomers are doing.
Digital challengers are winning the onboarding game, with Monzo most recently reaching 1m accounts in late September 2018 and contemporary Starling Bank likewise seeing a 500% increase in accounts. Both banks pioneer the use of mobile phone verification and lean heavily on lessons learned from the tech giants.
They’re making it very simple to become a customer. I did onboarding myself with Revolut and it’s very smooth and easy to get started and then they begin asking for more information the more you get into AML. People want something convenient and convenience always wins.
Signicat is simplifying the process by providing one single API for a number of different onboarding methods in a single interface, making it very simple for banks. They can then set the initial onboarding on whatever level they would like and then step up at a later time.
Banks can take the following steps to smooth out their onboarding process:
Download our Battle to Onboard 2 report for more recommendations.
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John Erik Setsaas
VP of Identity and Innovation at Signicat
February 05 2019