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Enhancing Customer Experience and Boosting Sign-ups with Identity Auto-fill for FinTechs

Prove
July 1, 2021

Whether you’re applying for a loan, opening a checking account, or signing up for a credit card, there’s no escaping the paperwork—lots and lots of paperwork.

For decades, brick-and-mortar banks have tried to make the prospect of filling out government-mandated paperwork less painful by offering free pens and unlimited coffee to prospective customers. Of course, employees were also on-hand to answer questions and ensure the process went smoothly.

More recently, however, a growing number of FinTech companies have been offering an even more alluring perk to combat paperwork fatigue: the ability to quickly and easily complete complex financial transactions on your devices. Visit websites of the leading neobanks or digital lending services, and you will see a convincing copy promising quick and easy onboarding and an intuitive user experience.


Of course, the COVID-19 pandemic has only accelerated the move to digital in the financial services industry. J.D. Power reports that 30% of consumers have increased their mobile banking app usage, and 35% are using online banking more than before the coronavirus outbreak. As digital activity volume increases, digital-native FinTechs are compelled to combat application abandonment and reduce identity fraud.

Unfortunately, as evidenced by the high customer abandonment rates plaguing the industry, many FinTech firms have been unable to make good on their promise of frictionless onboarding. The reason? Regulatory mandates surrounding customer identification and the reluctance to design the application process from first principles have left a lot to be desired in making customer onboarding smooth and frictionless. To make matters worse for FinTech players, it’s a lot less embarrassing for a potential customer to simply close the tab on their browser than walk out of a bank if the paperwork becomes too painful to bear. Hence, the sky-high customer abandonment rates.

Today, FinTech companies spend millions of dollars in marketing to lure individuals away from their trusted brick-and-mortar bank only to lose them to arduous customer onboarding at the last minute, resulting in lost revenue and high customer acquisition costs. One study found that the industry-wide average onboarding success rate for FinTech and e-money is 74% which implies that over a quarter of applicants drop out. About 14% of FinTech companies surveyed think that maximum drop-outs occur in the initial stages of form-filling when the name, address, and other personal details are asked for. Even challenger banks—a segment that should excel in customer onboarding given that its business model depends on rapidly growing its customer base—routinely suffer from onboarding hitches due to data-entry errors and impatience of distracted potential customers.

Fortunately, there is hope for FinTech companies committed to leveling up their onboarding strategy. Folks working in digital banking can (and should) learn from college students who documented their experiences attempting to sign-up for digital banking services and then take actionable steps to improve customer experience.

Technology to Address Customer Onboarding 

Deploying technologies that make onboarding as painless as possible for customers while still fulfilling regulatory mandates will be critical to solving FinTech’s current onboarding issues. 

Prove Pre-fill™ offers a powerful solution to this problem by radically transforming the digital onboarding experience. While in traditional onboarding flows, a customer fills out a form with personal information, which is then verified by the financial institution, Prove Pre-fill does the opposite. It uses Phone-Centric Identity™ techniques to auto-populate forms with personal information that meets KYC requirements from verified data sources and then requests customers to simply confirm it. This new flow drastically reduces the number of keystrokes required to fill out a form (a metric that measures customer fatigue) while preventing identity fraud by preventing bad actors from filling out fraudulent information into the forms. On the back end, it even reduces the need for costly manual reviews of applications. 


One specific case of a Tier 1 issuer auto-filling identity data was shown to deliver the following benefits:


  1. 15% increase in signups, on average
  2. Reduction in the number of keystrokes in online onboarding by 80%
  3. $200 million increase in annual revenue


Today, there’s a “difficult paradox” that is keeping the CEOs of both banks and their digital-first rivals up at night: even as more people conduct financial transactions digitally, the happiness divide between digital-only customers and hybrid customers is significant:  “the most satisfied retail banking customers use both branch and digital services to conduct their personal banking, while the least satisfied are those who have a digital-only relationship with their bank and do not use branches.”


Prove Pre-fill is a proven tool for FinTechs to accelerate onboarding, reduce application abandonment, prevent fraud, and enhance overall customer experience.


To learn more about Prove Pre-fill, click here.

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