" class="no-js "lang="en-US"> Signicat: Fixing onboarding with the help of authentication
Friday, March 29, 2024

Signicat: Fixing onboarding with the help of authentication

by Johan Sörmling, Head of Mobile Identity at Signicat

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Whether it was John Wanamaker or Lord Leverhulme who said this, things are a little different today. Marketers and advertisers have much more insight into where their money is being effective and where it is wasted.

For financial service providers, a lot of that marketing is about customer acquisition. People don’t change bank on whim, like they would try a new shampoo. They also don’t really enjoy dealing with financial issues. Plus there’s the issue of trust—someone may not especially like their provider, but may stick with them simply because they know they will be there tomorrow. Why risk change?

When a potential customer decides to make a move and start the application process, it means all of those objections have been overcome… and yet the biggest hurdle is only now looming.

Onboarding and abandonment

To say that not every customer that begins an application for a financial product doesn’t finish it, is to understate the problem. 63% of consumers report that they have abandoned an application in the last year, almost two-thirds. That’s a lot of wasted marketing. Independent research estimates that financial institutions across Europe spend around €5bn on trying to attract these not-quite-customers, convincing them to sign up only to fall at the final hurdle.

Why do these customers give up? Some say it’s the length of time that an application takes, others complain about the amount of information they are required to give. Whether it’s complexity or time that’s driving people away, there is clearly a user experience problem that needs fixing. Unfortunately, even though the financial services sector has been working hard to improve the user experience, the number of people who abandon applications has remained almost unmoved over the last five years.

This is not just a user experience problem. It needs to be recognised that onboarding customers is difficult. There is no simple or fast way to get all the necessary information from a customer—including that demanded by regulation.

Fixing onboarding with the help of authentication

It’s important to understand exactly why people abandon applications for financial products. Sure, it’s for some of the reasons they say, but it’s often because they simply don’t have the information required to complete an application, whether that’s an ID document, past addresses, or income details. The problem is not asking for this information, it’s asking for it once, then expecting a customer to come back another time and start the application again.

Often, consumers aren’t abandoning the onboarding process. They’re simply discouraged by the idea of going through the same process again.

This is caused by the way many onboarding processes work, often a legacy of the way they worked in the past. People would fill in and sign a paper application, then once processed they would receive the cards and documents that would mark the beginning of their relationship between provider and customer. Similarly, the process of setting up authentication credentials (traditionally a username and password but now—hopefully—more sophisticated multi-factor authentication) happens after the customer has provided everything they need to apply.

A simple (in principle) change should be made to onboarding. If the very first thing a customer does is set up an authentication profile, then the onboarding process can be stopped at any time for any reason, and later restarted. There are so many reasons for customers to stop—maybe they need to find a document, move to more comfortable conditions to continue a process that is longer than they thought, or maybe they’re not in a situation where they can easily submit a video for a liveness check. When the customer wants to resume, they can continue where they left off before.

While this might seem a straightforward change—moving something usually left to the end to the beginning—in practice it means authentication needs to be fully integrated with the onboarding process and some thought given to how exactly this approach will work. How long should part-completed applications be retained? Does the current authentication system lend itself well to being at the beginning of such a process?

We are keen advocates of the idea that authentication is more than a security process—it’s fundamental to how your customers see a business and how they interact with it. This doesn’t always mean completely overhauling how things work to create a better experience. Sometimes it can mean making simple changes that move us away from old ways of thinking—in this case where the relationship with the customer starts. At one time this was when the customer signed on the dotted line. We believe that the relationship starts long before that point—and that the key moment in this relationship is the first impression, onboarding.

People In This Post

Companies In This Post

  1. Marco Santos to Become CEO of GFT Technologies SE Read more
  2. PayPal Plans to Appoint Carmine Di Sibio to Board of Directors  Read more
  3. Yapily Named a Supplier on Crown Commercial Service’s Open Banking DPS Framework Read more
  4. allpay Appointed as Official Supplier on Crown Commercial Service’s Open Banking and Fund Administration & Disbursement Services Dynamic Purchasing Systems Read more
  5. Oliver Wyman Announces Mariya Rosberg as Americas Head of Banking and Financial Services Practice Read more