FICO Survey: Banks’ Identity Checks Have Pushed One in Four Brits to a Competitor

FICO survey underscores the need for flexible customer journeys and the role biometrics can play

Competitive Intelligence
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Fraud Protection & Compliance

London, 8 June 2021

Highlights:  

  • 23 percent of UK respondents would go to a competitor if asked to visit a branch or post documents as part of applying for a financial account
  • Younger age groups are less tolerant of disruption in opening accounts
  • 79 percent are open to some use of their biometric data for security
  • Biometric familiarity increasing but banks must explain how it is used 

New data from FICO, the global analytics software provider, reveals the levels of consumer tolerance to new account opening security checks. With 23 percent 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.

More information: https://www.fico.com/en/latest-thinking/ebook/united-kingdom-consumer-survey-2021-identity-proofing-and-digital-banking

According to the FICO data, if asked to visit branches or post documents, only just over half of customers (52 percent) will complete the process as soon as possible, while nearly one in three (31 percent) 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 percent have gone to a competitor, and 8 percent have quit the process.

Generation Y Want to Stay Digital

Consumers between the ages of 25-34 – millennials – are the least tolerant to disruption caused by the ID checking process. 42 percent 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 percent would leave the application.

“Our data shows intuitive but flexible customer journeys are required,” said 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.

Preferences for Opening an Account Digitally

Age Prefer App Prefer Website
Under 25 35% 13%
25-34 33% 32%
35-44 22% 45%
45-54 17% 50%
55-64 11% 53%
65+ 5% 53%

Source: FICO Survey 2021

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 percent are happy for banks to do so if they explain why, 28 percent are comfortable with banks saving biometrics, and 13 percent said they would provide the data but were not happy about it. Another 13 percent would never provide biometrics to banks or other financial organisations and 9 percent remain unsure.

While older age groups were slightly more likely to say banks should never capture biometrics to protect accounts —17 percent of over 65s compared to 5 percent 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 FICO research were asked to select organizations they believed already had their biometric data. In the UK, while all current passports are biometric and approximately 76 percent of citizens hold a passport, only 27 percent of respondents thought the government held their biometric data. Social media platforms use biometrics to ‘tag’ people in photographs but only 10 percent identified this as an example in the FICO study. And only 17 percent thought they had given biometric information to their phone providers. If the data never leaves their phone the other 83 percent 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.”

FICO has released two podcasts for the UK featuring FICO’s fraud experts and Iona Bain, founder of the pioneering Young Money Blog, the UK's foremost blog dedicated to young people's finances: Identity Theft, COVID-19 and Digital Acceleration and Digital Natives, Disruption and Application Abandonment.

About FICO   
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 195 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 120 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.   

Learn more at https://www.fico.com   

FICO is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.   

For further comment contact:    
FICO UK PR Team    
Wendy Harrison/Parm Heer/Matthew Enderby    
ficoteam@harrisonsadler.com    
0208 977 9132     

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