Record number of consumers abandon financial apps due to complex ID checks 

By Gaia Lamperti

New research reveals that 68% of consumers in Europe have abandoned financial applications in the past year, a figure that has seen a steadily increase over the last five years.

These were the findings of the fifth edition of  ‘The Battle to Onboard: The Growing Power of Consumer Demands’a report by digital identity company Signicat. The study is based on a survey of 7600 consumers across Europe including Belgium, Denmark, Finland, France, Germany, Lithuania, the Netherlands, Norway, Poland, Spain, Sweden, the UK, Estonia and Ukraine. Consumers were asked to report their experiences and expectations of financial services onboarding in the last year.

The reasons behind a poor customer journey mostly seem to be identity-checking processes to comply with Know Your Customer (KYC) and Anti Money Laundering (AML) rules. Unfortunately, all too often these processes are not designed for the new digital expectation of users and do not consider local market nuances, ending up in a poor user experience for the consumer.

“What this report shows is that identity technologies are a huge market opportunity in the digital economy yet, the market is complex,” Asger Hattel, CEO of Signicat told IBS Intelligence.  “There is a fragmentation of identity solutions available on the market and standards across jurisdiction, which creates friction for businesses. For better customer onboarding journeys, it is important that potential customers be given a choice for different identification methods and for financial institutions to configure and integrate to identity providers with local market expertise and breadth of technologies that meet those local market needs.”

Interestingly, the research found an “expectation paradox” when comparing markets. Those countries with an easier and faster onboarding experience—thanks to digital identity schemes like BankID —did not necessarily have happier consumers that are less likely to abandon an application. In fact, consumers in “more mature” digital identity markets were more demanding, less likely to tolerate a bad experience and in some cases more likely to abandon an application than in “less mature” markets.

“The solution however isn’t simple,” added Hattel. “While digital identity makes onboarding quicker, this better experience makes for higher expectations from consumers—and increased abandonment if these are not me. The key to creating a better onboarding experience is an in-depth knowledge of the market, an understanding of consumer behaviour and the ability to offer multiple onboarding methods.”

Key findings

• Ease of application: Nearly a third (30%) of respondents said that they found the application process “complicated”.
• Speed of abandonment: The average time that a consumer would typically abandon an online application for a financial product was 18 minutes and 53 seconds. This is seven minutes quicker than the 26 minutes on average it took for a consumer to abandon in 2020.
• Reasons to abandon: The time to apply (21%), the amount of personal information required (21%) and changing their mind (21%) are the main reasons applications are abandoned.
• Importance of onboarding methods: 38% of respondents report abandoning an application for a financial product because they did not have the right identity credentials, such as a passport or digital identity.