Prove It! Banks Resist Using Digital Processes To Improve Customer Service


For all their talk of become digital, banks still have a ways to go on such a basic task as opening a new account without a branch visit. Only 49% of North American banks let new customers use digital methods to establish their identity and open a bank account, according to a recent survey by FICO.

Its Customer Identity Management Survey said that 23% of customers would abandon opening an account if the bank required them to provide their identity through another channel. In the time of Covid-19, when visiting bank branches is seen as risky, and banks are touting the importance of customer, requiring in-person branch visits to open an account seems outdated, or uncaring.

“The pandemic has forced industries to fully embrace digital. We now are seeing North American banks that relied on face-to-face interactions to prove customers’ identities rethinking how to adapt to the digital first economy,” said Liz Lasher, vice president of Fraud, Financial Crime and Cyber Risk Portfolio Marketing at FICO. “Today’s consumers expect a seamless and secure online experience, and banks need to be equipped to meet those expectations. Engaging valuable new customers, then having them abandon applications when identity proofing becomes expensive and difficult.”

The study found that only up to 16 percent of U.S. and Canadian banks employ the type of fully integrated, real-time digital capture and validation tools required for consumers to securely open a financial account online.

This appears to be a hot topic — another study coming out later this week found a majority of banks did not allow users to open an account through a mobile app and half required three pieces of identification.

It’s not just opening new accounts, it can be difficult to merge accounts. My niece opened a Wells Fargo checking account in Santa Fe. Now living in Pittsburgh, she recently bought a house and got a mortgage through First Commonwealth Bank. Wells bought the mortgage and she ended up with two Wells accounts but only one used her middle initial, E. To combine them would require visiting a physical branch — the nearest was a six-hour drive. And this is for an existing customer over the initial E! Presumably it would have been the same hassle for any middle initial. She could pay her mortgage from her checking account, but she couldn’t access her mortgage account. (An odd twist, apparently because her father set up her account, she has access to his checking account information, and to change that would — yes, require them to go to a branch together. At Wells, customer experience apparently involves a lot of branch experience.)

Now Wells Fargo has a history of problems with fake accounts, but should customers suffer as a result? Fortunately my niece was driving out to visit me in Wisconsin and found a Wells Fargo branch in Sheboygan, just off the highway. She made an appointment and in “an hour with the nicest woman” the accounts were rationalized. For all the talk about making customer experience a top priority, the reality seems to be something different.

Trulioo which provides identity verification for five billion people and 330 million companies worldwide, agrees with FICO on the importance of easy account opening in financial services, gaming, online marketplaces and retail.

Its recent study, “The Power of First Impressions” said “If online service providers fail to deliver seamless digital experiences when onboarding new customers, or to protect the security or identity of their customers, then they risk losing these customers for good.

Steve Munford, CEO at Trulioo, said that company’s recent report on consumer account opening found that less than half (43%) of consumers are fully satisfied with their recent experiences opening new online accounts with financial institutions. Consumers appreciate the need for security and identity verification checks, Trulioo found.

“At the same time, they do not believe that the need for security excuses poor customer experience when they are opening a new account. Consumers may have high expectations when it comes to account creation, and they do look very favorably at brands that can offer an experience that combines both speed and security.”

Customers much prefer that it takes place in real-time. Online is expanding across sectors — the majority of people use their online accounts at least once a week and in financial services, 52% of users check in daily. And usage is growing.

“Consumers hold strong views on what makes a first-rate account opening process,” said Trulioo’s Munford. “The current environment is only going to get more competitive and consumers will have infinite options online, therefore, businesses need to ensure they are providing consumers with the right balance between frictionless and security.”

The average active consumer in the UK and the U.S. has opened up more than four new online retail accounts in the last two years, and more than three accounts with online marketplaces, online gaming and financial services sites. Trulioo expects rapid growth in online gaming in the U.S. because of new laws that allow it. In the U.S. the survey funds that 77% said the verification process can make or break an account opening, and 59% have actually abandoned a new account when opening it proved difficult.

Trulioo’s survey divided generations at 35 years of age and found “Younger people are significantly less satisfied by their experiences with opening new online accounts than older people, a reflection of their heightened expectations as digital natives and their desire for speed in all online interactions.”

Real-time identify verification leads to complete enrollments and also makes consumers feel good about the brand, Trulioo found.

“Perhaps most significantly, 73% of consumers are likely to spend more money on a website where the service provider uses real-time identity verification as part of a fast and secure account opening process.”

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