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Bank identity checks push one in four consumers to a competitor

New data from FICO reveals the levels of consumer tolerance to new account opening security checks. With 23% of UK respondents admitting to going to a competitor if asked to visit a branch or post documents as part of the digital application process, it’s clear that financial services providers need to get the balance right on security checks and a smooth customer journey.

According to the data, if asked to visit branches or post documents, only just over half of customers (52%) will complete the process as soon as possible, while nearly one in three (31%) will give up completely or go to a competitor.

The risks of abandonment continue when customers are asked to scan documents and email them or use an identity portal. When asked to do so, 17% have gone to a competitor, and 8% have quit the process.

Generation Y Want to Stay Digital

Digital identity checksConsumers between the ages of 25-34 – millennials – are the least tolerant to disruption caused by the ID checking process.

42% would abandon the process if it required them to mail documents or visit a branch. If required to scan and email documents or use a separate identity portal, 35% would leave the application.

“Our data shows intuitive but flexible customer journeys are required,” says Matt Cox, vice president for fraud in EMEA at FICO. “Some people are happy to provide selfies, others want to scan documents.

What individuals can do – or can be encouraged to do – is personal. This makes intuitive apps and education crucial if financial services providers are to be successful at new customer acquisition.”

The role of the various digital channels available to consumers is also important for businesses to understand. Age seemed to play a strong factor in choice, as the older people were the more likely they were to prefer websites over apps for opening an account.

Biometric Data

Awareness of biometrics is quickly spreading and today most people are open to providing their bank with a facial scan, fingerprint or voiceprint to secure their accounts. A small percentage think banks should never hold biometric data and it is important for many to understand why financial organisations are doing so.

Respondents were asked to select the description that best fits their comfort with biometrics and attitudes towards banks capturing this data. The survey found 38% are happy for banks to do so if they explain why, 28% are comfortable with banks saving biometrics, and 13% said they would provide the data but were not happy about it.

Another 13% would never provide biometrics to banks or other financial organisations and 9% remain unsure.

While older age groups were slightly more likely to say banks should never capture biometrics to protect accounts —17% of over 65s compared to 5% of 18-24-year-olds — there was generally little variation across age groups in the acceptance and use of biometric security checks.

Few Know the UK Government Holds Biometric Data

Consumer understanding of biometrics is, however, the potential weak link in wider online finance adoption.

Respondents to the research were asked to select organisations they believed already had their biometric data.

In the UK, while all current passports are biometric and approximately 76% of citizens hold a passport, only 27% of respondents thought the government held their biometric data.

Social media platforms use biometrics to ‘tag’ people in photographs but only 10% identified this as an example in the study. And only 17% thought they had given biometric information to their phone providers. If the data never leaves their phone the other 83% are correct, but if it is transferred and stored then they are wrong.

“Consumers are familiar and comfortable with using their fingerprints to unlock their phones, for example, but do not consider this to be providing biometric data,” concluded Cox.

“Using biometrics from a mobile to unlock financial accounts can mean analysis of the biometric takes place at the bank, but customers already familiar with the process might not perceive it as such. Confusion surrounding biometrics is understandable but must be addressed by financial service providers that wish to use this type of data.”


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