The number of new online accounts is growing rapidly as more and more people all over the world turn to online services. Many of these new users are entering online sites via mobile devices, and with predictions from GSMA that 1.2 billion more people will be using mobile internet by 2025, a new market may soon be available. This opens up unprecedented opportunities for online service providers to drive innovation and customer experience and build more personal, meaningful and profitable customer relationships.
However, it’s important to note that this transformation, dramatically accelerated by this pandemic, also presents new threats and risks as bad actors look for new methods to commit fraud and launder money online. As service providers develop strategies to both take advantage of new opportunities and protect themselves against emerging threats and risks, account creation becomes an increasingly critical touch point. To effectively capitalize on this growing market, companies must develop a thorough understanding of the changing attitudes, expectations and behaviors of their users, which begins with the account opening process.
According to a recent survey of over 2,000 consumers in the UK and the U.S. commissioned by my company, online sites are risking losing a majority of customers due to a poor customer onboarding experience. Consumers are no longer willing to blindly sacrifice security in favor of fast user experience, bringing new challenges as to how organizations balance both. Based on our research findings, below are three hurdles businesses need to clear to avoid losing customers:
1. Avoiding an intrusive account-opening process.
The survey revealed that more than half of customers will abandon the account-creation process if they feel they need to provide too much personal information. This raises questions regarding the amount of information organizations are requesting during the sign-up process. If too much is requested, consumers will feel the process is intrusive and unnecessary, but too little and the security of all users could be at risk. The key is finding the right balance.
When opening a bank account online, the process typically asks users for a wide range of personal information, such as name, birth date, address, ID document, etc. But while opening a bank account should maintain a high level of security, not all account-opening processes should require the same level of personal information. What is the necessary data for the account-opening process? A retail site, for example, will require less personal information when someone is making a purchase, both in volume and in-depth.
Online sites should ask what’s legally required from customers during onboarding (i.e., AML/KYC, CDD rules) but should then consider carefully each additional piece of information and ask, “Is this a must-have for us, or a nice-to-have?”
Online services could also collect the necessary information throughout the customer journey, rather than all information during account creation. For example, a gaming site could collect personal information upon opening an account but delay asking for bank details until a gamer wants to place a bet, and only request an ID document and selfie to verify the account when they want to cash out. Ensuring the account-opening process has the right amount of friction will help keep customers engaged and simultaneously protect against risk.
2. Optimizing identity verification workflows to reduce failed attempts.
If a website fails to verify individuals after multiple attempts, the company is likely to lose 42% of these prospective customers, according to our research. Above all, service providers need to be sure customers are who they say they are to prevent fraud and maintain compliance. At the end of 2019, 5.3 billion people had subscribed to mobile services. This means that service providers must be prepared to verify customer identities across a range of devices and ensure the experience is convenient and secure across each.
For example, a customer signing up for a service through a mobile phone in transit may not have sufficient time or uninterrupted internet service to complete the online registration process. Meanwhile, a customer signing up on a laptop from the comfort of their home may have more time and patience to complete the process. No matter who they are and what device they are using, consumers in 2020 want to access online services anytime, anywhere. Thus, providers of those services must administer frictionless verification across all platforms.
3. Increasing transparency around how information is used.
For 39% of the respondents, a lack of transparency about why certain information is required to open an account has led them to abandon the process and go elsewhere. This feeling among many consumers — that businesses ask for personal information without stating why they need it — was prevalent throughout the research my company conducted. It’s also part of the current “tech backlash”: Americans’ trust in big business took a sharp decline last year, and just 50% of Americans think tech companies have a positive impact on the country, down from 71% in 2015. Consumers are on high alert about their personal information and businesses are contending with how to best facilitate transparency.
Businesses that sit in heavily regulated spaces need to realize that along with addressing risks associated with security and privacy fraud, establishing and increasing the level of trust with customers is crucial.
Despite rapidly changing consumer preferences and habits, one thing is clear: Consumers want things fast, secure and easy. As online services expand, both new and established providers must develop onboarding processes that address these new behaviors and ensure high levels of security. As a critical initial touch point in the customer journey, onboarding presents a unique opportunity to capture or lose customers.
Ultimately, the current environment has proven how pivotal digital transformation is for businesses, no matter their size or market. With the world suddenly changing from digital-first to digital-only, consumers will increasingly expect and demand better services. Those who are able to anticipate rapidly changing consumer expectations and embrace new approaches and technologies to meet these demands will win.
This article first appeared on Forbes.
Business Verification (KYB)Enhanced Due Diligence Procedures for High-Risk Customers
Identity VerificationProof of Address — Quickly and Accurately Verify Addresses
Business Verification (KYB)How to Verify Legitimate Businesses and Merchants