Digital onboarding finally gets banks’ attention; money is being budgeted — survey
Imagine a business so central to people’s lives that they wait in line to walk in the door only to find an annoying, time-wasting maze. That is the case faced by many would-be bank customers trying to open accounts online.
A majority of financial executives surveyed recognize that service gap, and are ready to address it in part through biometrics-based security, according to a report sponsored by OneSpan North America Inc., an authentication-software firm. More than 100 industry executives and 300 consumers responded to the 2019-2020 query.
Almost 70 percent of respondents at banks said that creating digital onboarding is an active project for their companies. About 35 percent said these initiatives are their top priority.
There is money behind those words, too. About 41 percent of executives said their budget for digital onboarding would increase this year, by between one percent and 10 percent. Only one percent said that their budget would fall.
It is not hard to understand why.
Almost eight in 10 consumers responding to the survey said they prefer opening a bank account entirely on a phone or other computing device. The efforts of 45 percent were foiled, according to the survey.
Six in 10 bank respondents agreed that a poor experience online is the number one reason that would-be customers abandoned an online application.
Executives found that those people resented that they had to go to a branch to complete their application. Or they did not like how many channel interactions were needed to sign up online. Still others felt the onboarding process was too long.
And disgruntled people did not merely quit the bank’s site to visit its local branch. Too many of them moused over to competing banks that had better online user interfaces and leaner application processes.
In reaction, 60 percent of banks made their top 2020 investment priority digital identity document verification. Roughly a third of the respondents said their bank’s investment priority is artificial intelligence and machine learning. Another third said deploying electronic signatures is their top goal.
Biometrics, behavioral biometrics and facial recognition were cited as lesser priorities in 2020: 28 percent, 24 percent and 16 percent, respectively.
Executives making the move are not just business savvy. They have some guts, too.
Half said they continue to suffer security and fraud incidents that are directly attributable to digital onboarding. In fact, stolen and synthetic identities were listed as primary sources of fraud incurred by banks in the previous year. This is, according to the survey, “a direct result of offering digital account opening.”
Adding an ominous note, half of the executives rated the status of their onboarding as “somewhat secure” or “not secure.”