KYC experiences can make or break a customer relationship. But all too often, too little thought is given to the way compliance journeys are designed and delivered, and customer abandonment rates rise as a result.
Is abandonment really a big issue?
Recent surveys of digital service users found that two-thirds of those questioned had abandoned a digital bank application in the past year, and that these rates have been rising over the past five years.
That amounts to an estimated €5 billion that financial services institutions are losing each year to onboarding drop-offs.
Those figures tell us that far too many customers are still meeting unnecessary hurdles and experiencing digital onboarding journeys that don’t meet their expectations.
It also suggests that mature digital identity schemes do not automatically lead to happier consumers. As remote access becomes the norm, customer tolerance for processes that are inconvenient, time-consuming and overly complex, is shrinking. In summary, customers are becoming more demanding, and less likely to tolerate bad experiences.
Research also shows that there is now a marked correlation between abandonment rate and age. Younger people (18-44 years) are far more likely to abandon an application process. Gen Z, now the frontline of customer acquisition, is not prepared to compromise.
This failure to convert good customers comes at a significant cost both in the form of lost revenue and reputational damage.
So, what constitutes poor onboarding?
Processes that take too long, require customers to engage with poorly designed user interfaces (UI) and where the user experience (UX) hasn’t been expertly thought through, result in higher dropout rates.
Let’s break those down a little.
User experience
Perhaps the biggest driver for abandonment is a poor user experience. Journeys that are not highly customer-focused and tailored to the expectations users have, will result in customers experiencing frustration and ultimately deciding to give up.
Processes where customers pass through database checks but – because there is no automatic step-up to secondary KYC steps such as document validation – are asked to come back to complete their journey at a later time, are destined to see high rates of abandonment. By the time the email inviting them to complete the second stage arrives in their inbox, that user has already applied somewhere else with a better UX.
Complex liveness detection challenges where the user is required to perform gestures that are frustrating, and – if they’re somewhere public – embarrassing, are an obvious barrier.
Frequently we see clients who have a good UX for native app journeys but have a poor UX when it comes to browser journeys.
User experience is key.
The time it takes.
Speed matters. In our digital-first age, consumers expect immediate, secure access to digital services.
At HooYu, we conducted our own research into onboarding drop-off in the gaming industry in 2021 and found that the length of time a prospective customer is forced to wait before KYC is secured is directly correlated to abandonment rates.
Perhaps not surprising. And yet we still come across cases of customers are being asked to engage in processes that take hours – sometimes days – to complete.
If you have an identity provider in place, ask to see the metrics. How long does their auto process take? How long do they take for manual review? And in terms of balancing the equation between speed and security, what checks are taking place in that time?
What makes a successful KYC journey?
At HooYu, we focus on three key areas that we believe make a real, tangible difference to reducing onboarding drop-off rates. Those areas are: orchestration, configuration, and user experience.
Tailored journeys
We understand that a one-size approach does not fit all; local knowledge is key, as is allowing organisations to tailor their onboarding experiences to meet the nuanced demands of their customers.
At HooYu, we offer clients a ‘pick and mix’ blended approach to selecting the KYC tools and features that are integrated into each onboarding journey.
That could include database checks, PEPS & sanctions screening, facial biometrics, liveness detection, open banking, card checking, ID document validation, online profile analysis, geolocation, and fraud alerts.
The important thing is the outcome the configuration produces.
That means that whatever combination of features you choose for your customers’ onboarding or reverification journeys, when they’re brought together, they allow you to reach a prescribed level of confidence in an identity.
Where a user presents a greater risk, either at onboarding or in-life, the KYC steps can be tailored to the risk that user or their in-life actions present.
By allowing our clients to orchestrate and configure the features they want, we offer the ability to create journeys that are precisely tailored to the markets and risk environments our clients operate in, as well as their customers’ expectations.
Taking a blended approach also makes it easy for clients to remove unnecessary steps from KYC processes, helping remove unnecessary friction the end user encounters.
Exceptional UI and UX
Creating a frictionless and smooth customer journey is also about getting the UI and the UX right.
That means giving thought to features like in-journey guidance, real-time feedback to provide dynamic support as soon as a user experiences confusion or frustration, user outreach tools which engage with the user, and journey completion tools that are tailored to the precise language and operational needs of your customers.
These are the kind of tools we offer our clients are HooYu – and which ultimately make the difference when it comes to whether customers make it across the finish line or not.
Some friction is fine (no, really)
We believe that speed and ease should not mean compromising on security… and customers agree.
User research shows that customers are willing to accept some amount of friction. Where it’s obvious why it’s happening, and they can see it results in greater security, a certain amount of friction is viewed as a positive thing.
Seamless and secure onboarding
As more and more of our lives play out online, customers expect to be served seamlessly across physical and digital borders.
Effective KYC journeys, therefore, cannot just be about increasing the robustness of the identity verification process, but also about maximising the percentage of users who can successfully access the service or product they need.
