It has been increasingly reported that the abandonment rate of customer onboarding is increasing dramatically. One Span in their Digital Account opening white paper, claim that abandonment rates are between 65% and 95%. Recently I had a friend who had emigrated to the UK and had to open a bank account. Three weeks later he is still waiting for the account to be activated by one of the mainstream big banks but in a matter of minutes he had opened a bank account with one the challenger banks and within 24 hours had a physical card delivered to his door. One does question the lifespan of physical card in our digital world where a virtual card is more secure and does everything that its physical counterpart does but this is the topic of future discussion.
Without doubt, as per my friend above, the account opening process will impact customer loyalty and therefore impact on future profitability.
“Despite this, customer identity verification during account opening remains one of the most challenging processes for FSPs to digitize.”
“New customers expect to be able to open an account online. As a result, banks and other FSPs need to offer digital account opening through online and mobile channels. Despite customer demand for fully digital account opening services, many banks do not offer fully digital account opening experiences – with some aspect of the onboarding process, such as identity verification, requiring the applicant to come into the branch. The prospective customer starts the account opening process online, but is subsequently required to sign paper agreements or present ID documents in-person. These manual steps slow down the account opening process and frustrate applicants, often causing them to abandon the account opening process”.
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