Brits are embracing biometrics, but more than half will abandon apps if they’re not fully digital

Since the start of the COVID-19 epidemic, great importance and value has been placed on contactless and online interactions, especially in the financial sector. New research commissioned by global analytics software provider FICO, conducted just before the pandemic took hold, shows online interactions were already quite normal among UK consumers. The challenge for financial institutions seems to be to ensure that the entire onboarding process can be completed digitally.

According to the new FICO study, conducted among 4,500 consumers worldwide at the start of 2020, it is not millennials but Generation X (35-44 years) who are leading the charge when it comes to opening a digital account. In total, 89% of 35-44 year olds open an online bank account, followed by those over 55 (82%). Perhaps surprisingly, 18-24 year olds are the least likely to open an online bank account, at 79%, which may reflect their lack of financial confidence rather than a reluctance to go digital.

When opening bank accounts digitally, people expect to perform related activities in the channel (if necessary by scanning documents or providing a selfie). In total, 77% think they should be able to prove their identity this way and 73% expect to prove where they live without going offline. Almost half – 46% – also expect to be able to set up biometrics such as fingerprint scanning when opening an account.

Again, those who fall broadly into the millennial category are the least inclined to scan ID documents or provide selfies to complete their candidacy. Only 53% would do this to prove where they live, compared to 80% of 35-44 year olds.

Especially for banks and lenders, if it is not possible to take all the actions online to open an account, only 45% will take the necessary offline actions as soon as possible. Almost a quarter (24%) would try another provider and 8% would give up opening the account altogether. A total of 17% said they would eventually complete the application with the additional steps required – but the question is whether that would actually happen. Financial institutions that do not facilitate a fully digital account opening experience could therefore lose up to 55% of their new business.

Sarah Rutherford, Identity Solutions Expert, FICO, said: “Digital account opening has become the norm even without the acceleration in online adoption caused by COVID-19. The challenge for banks and lenders is to make the experience fully digital – and address any uncertainty or mistrust among certain groups.

“In the current climate, this is crucial as branch visits are actively discouraged, but it is also crucial for the long term. The behavioral changes brought on by COVID-19 will only increase consumer demand for frictionless and online interactions. The financial industry must work hard to meet this challenge in order to create the best possible customer experience, while reassuring customers who have doubts about digital security.

“The key is to put in place continuous authentication methods using both biometric and non-biometric credential management methods, and an integrated approach that can be applied at every customer touchpoint.”

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