Signicat, the Trusted Digital Identity™ company, revealed new research that shows 63% of consumers in Europe have abandoned financial applications in the past year. The survey results—conducted in May and June 2020 during Europe-wide COVID-19 restrictions—are the worst since the report debuted in 2016 and show a sharp increase of 23 points from the 40% abandonment rate in 2019.
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The fourth edition of Signicat is annual study The Battle to Onboard 2020: The impact of COVID-19 and beyond is based on a survey of 4,000 adults across Belgium, Finland, Germany, the Netherlands, Norway, Sweden and the United Kingdom regarding their onboarding experience as well as their attitude towards financial service providers.
Why are abandonment rates so high?
For any business, knowing your customer (KYC) is challenging. Financial institutions must comply with KYC and Anti Money Laundering (AML) rules which requires the consumer shares personal information. All too often identity checking processes are not designed for the digital world:
- Over a quarter (26%) of consumers argue that the onboarding process is “difficult”.
- Over a quarter feel the onboarding process is longer than they expected (28%).
- Consumers have been spoiled by the ease of mobile-first financial service providers. Over two thirds (69%) consider mobile-first providers to be better than more traditional providers.
- Consumers are finally refusing to put up with substandard options—something Signicat believes is the end of “learned helplessness”.
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Providers can no longer rely on learned helplessness
Learned helplessness is a phenomenon where if people find themselves in a negative situation for any length of time, they believe that they cannot change this situation—even if better options become available. The increased use of digital brands—effectively better options—is changing this attitude in consumers.
- Far more consumers are now using a mobile-first financial service, up from 30% in 2019 to 47% in 2020.
- Only 4% are unhappy with their new mobile-first provider. 69% are happier than before.
- 70% of those with a digital-first account say that convenience means they are more likely to use it every day.
As a result, we are seeing the “the end of learned helplessness”. Consumers have simply had enough of poor onboarding experiences and have begun voting with their feet. Banks have not responded sufficiently to this change.
