FICO digital bank survey

New data from FICO (https://www.fico.com) reveals low levels of consumer tolerance to new account opening security checks with 23% of UK respondents admitting to going to a competitor if asked to visit a branch or post documents as part of the digital application process.

According to the FICO data, if asked to visit branches or post documents, only just over half of customers (52%) will complete the process as soon as possible, while nearly one in three (31%) will give up completely or go to a competitor.

The risks of abandonment continue when customers are asked to scan documents and email them or use an identity portal.  When asked to do so, 17% have gone to a competitor, and 8% have given up all together.

Surprising consumers between the ages of 25-34 – millennials – are the least tolerant to disruption caused by the ID checking process.  Over 40% would abandon the process if it required them to mail documents or visit a branch, whilst 35% say they would leave the application if required to scan and email documents.

“Our data shows intuitive but flexible customer journeys are required,” says Matt Cox, Vice President for Fraud in EMEA at FICO.  “Some people are happy to provide selfies, others want to scan documents.  What individuals can do – or can be encouraged to do – is personal.  This makes intuitive apps and education crucial if financial services providers are to be successful at new customer acquisition.”

When it comes to biometrics, respondents were asked to select the description that best fits their comfort with biometrics and attitudes towards banks capturing this data.  The survey found 38% are happy for banks to do so if they explain why, 28% are comfortable with banks saving biometrics, and 13% said they would provide the data but were not happy about it.  Another 13% said they would never provide biometrics to banks or other financial organizations, and 9% said they were unsure about doing so.

Consumer understanding of biometrics is, however, the potential weak link in wider online finance adoption.  Respondents to the FICO research were asked to select organizations they believed already had their biometric data.

In the UK, while all current passports are biometric and approximately 76% of citizens hold a passport, only 27% of respondents thought the government held their biometric data.  Social media platforms use biometrics to ‘tag’ people in photographs but only 10% identified this as an example in the FICO study.  Furthermore, only 17% thought they had given biometric information to their phone providers.  If the data never leaves their phone the other 83% are correct, but if it is transferred and stored then they are wrong.

“Consumers are familiar and comfortable with using their fingerprints to unlock their phones, for example, but do not consider this to be providing biometric data,” concludes Cox.  “Using biometrics from a mobile to unlock financial accounts can mean analysis of the biometric takes place at the bank, but customers already familiar with the process might not perceive it as such.  Confusion surrounding biometrics is understandable but must be addressed by financial service providers that wish to use this type of data.”

The FICO findings show a clear indication that financial services providers need to get the balance right on security checks and operate a smooth customer journey for both potential and existing customers.