Seamless. That is the mantra in the digital world when it comes to banking and payments. Whether it’s buying a product from Amazon to depositing checks to opening new accounts, customers want a simple, safe, and speedy transaction with their financial institutions. This has required many FIs to change their processes to enable the “seamlessness” in all customer interactions. Unfortunately, that is a lot easier said than done.
FICO has released a new survey of banks and consumers in the U.K. that points to the difficulty in providing a seamless account opening. The lack of integration between different parts of the bank and different servicing channels have made the account opening process difficult particularly in the area of identity verification:
According to the FICO-commissioned study, whilst 72 percent of UK banks use digital methods to capture identity for personal bank accounts, they are not integrated into a seamless experience. Only 36 percent of banks said they capture customer identities and verify them in the same channel. A lack of integration means that only 29 percent of document capture is integrated into the same channel, leaving clients much more likely to abandon an application, for example after being forced to download another app or scan and email documents.
Indeed, the FICO consumer study found that nearly one in three UK consumers (32 percent) said they would abandon an application process if forced to take action through a non-digital channel. Yet only about 7 percent of banks surveyed have adopted a streamlined approach with capture and verification methods fully integrated, in real time, into the digital application process.
The move to digital has created a perception among consumers that the banks are fully integrated and can easily call upon their data when they are opening a new account. Based on this survey, however, there appears to be a major disconnect between banks and consumers regarding this matter and it has complicated the application process and created an abandonment problem for the banks.
It would be very easy for me and others to criticize the banks for not making this data available across channels and departments, but I understand it is much easier said than done. The banks are hindered by legacy computer systems, regulatory issues, and a whole host of other. That said, they are leaving money on the table. Not only in the acquisition of new accounts but the jeopardizing of current and future relationships.
Overview by Peter Reville, Director, Primary Research Services at Mercator Advisory Group