As much as 98 per cent of businesses ‘grossly misjudge’ levels of customer drop-off when opening an account; according to FullCircl, the UK-based regtech uniquely positioned at the intersection of revenue and regulation, in its newly launched ‘State of Identity Verification’ report.
Through the report, FullCircl exposes the knowledge gaps and missed onboarding opportunities currently costing firms an estimated 38 per cent of potential new customers each year. After surveying over 1,000 UK consumers, the regtech firm compared their opinions and perceptions against a survey of over 450 compliance professionals.
FullCircl says that many regulated businesses still have significant blind spots regarding customer onboarding, and that these represent wasted opportunities impacting customer attrition, compliance costs, and profitability.
It also found the rate of abandoned sign-ups is potentially 290 per cent greater than businesses estimate. The most common reason for this appears to be a total focus on regulatory compliance at the expense of customer experience – suggesting that this imbalance could be costing businesses dearly.
Overall, the average onboarding time is 35 minutes – 2.8 times longer than customers would like. Following this, 38 per cent of customers have abandoned account opening – highlighting the importance of user experience.
While user experience topped the poll as the biggest challenge facing compliance, over half (54 per cent) of businesses are not actively targeting this opportunity to cost-effectively boost acquisition.
Is ID verification letting firms down?
While the time taken to open accounts fails to keep customers to the end, it is not the only point of friction that consumers are unhappy with during the onboarding process. In fact, 53 per cent of customers abandoned the sign-up process because they felt uncomfortable with the identity verification process. But when consumers do experience secure, uncomplicated, and fast identity verification, it dramatically increases the number completing onboarding processes successfully.
Despite this seemingly obvious revelation, 59 per cent of businesses continue to rely on fully manual or mostly manual identity verification processes – driving up onboarding time and complexity, whilst driving down customer satisfaction and profitability.
Andrew Yates, CEO at FullCircl commented: “One of the biggest onboarding challenges facing regulated businesses right now is how to successfully walk the tightrope between customer experience and regulatory compliance. Unfortunately, it’s clear from our report that too many organisations still approach these as mutually exclusive issues. Likewise, too many are still employing manual approaches to identity verification which is compounding the problem even further.
“It’s clear that a more sophisticated, future-proof approach to identity verification is required to both manage risk and compliance and achieve positive customer outcomes. There are bright opportunities for those that get this right – bringing down the cost of acquisition whilst simultaneously driving up the customer experience and enhancing regulatory compliance.”
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