1 in 2 NZ Consumers Will Abandon Long Online Banking

Credit: Original article can be found here

FICO’s 2021 digital banking survey
shows that people in New Zealand expect a seamless banking
experience when it comes to opening an account via a mobile
app or website, with one in two expecting to answer
10 questions or less
or they will abandon the
process. One in five New Zealanders will
drop out if asked more than five questions.

“The
pandemic is driving a digital-first mindset in the New
Zealand with 28 percent of consumers more likely to
open an account digitally
than a year ago,”
said Aashish Sharma, senior director of decision
management solutions for FICO in Asia Pacific.
“The number of consumers who prefer to open bank
accounts digitally has grown to 61 percent and continues to
rise as New Zealanders become more comfortable managing
their finances online.”

Turning friction into
momentum

The survey revealed that consumer patience
with account applications varied according to product. New
Zealanders had the highest expectations for completing
applications in 10 questions or less, for savings
accounts (62 percent), Buy Now Pay Later products (59
percent) and transaction accounts (58
percent).

Interestingly this expectation was
significantly higher than other countries in the survey. For
instance, just 41 percent of UK consumers
expected to answer 10 questions or less when
opening a transaction
account
.

Overall New Zealand consumers want
digital experiences that reduce friction and inconvenience.
They expect their main bank to know them, 72 percent
want to
prove their identity
online
and 16 percent of New Zealanders say
that financial institutions ask too many
questions
.

“Where there is friction there
is opportunity, as the quote goes,” said
Sharma.
“Either you solve it for your customers
today, or a competitor will do it tomorrow. Consumers want
banks to find answers to application questions through
technology approaches such as improved identity checks,
transaction history analysis, open banking and government
databases.”

Mortgages deserve more
scrutiny

The survey showed that increased friction
and security is deemed appropriate by consumers when it
comes to applying and onboarding for specific high-value
financial products.

Despite relatively high levels of
ease and confidence in applying for day-to-day online
financial products such as current accounts, savings, loans
and credit cards, more than half (61 percent) of customers
polled expect greater rigor when it comes to mortgage
applications.

Research showed that just 25
percent of New Zealanders would apply for a mortgage
digitally
, compared to the survey average of around
one in three (34 percent). In all countries bar the USA and
UK, in-branch openings are preferred to online methods.
South Africa was a modest outlier with 43 percent of
customers favoring online mortgage
applications.

Nearly three in five New Zealanders
polled (58 percent) said they were willing to answer 11 to
20 or more questions when it came to applying online for a
mortgage.

Don’t change the channel

New
Zealanders who open an account digitally prefer to carry out
the process entirely in their chosen channel, whether it be
smartphone or website. If customers are asked to move out of
channel to prove their identities, many of them will
abandon the application
, either giving up on
opening an account completely or by going to a competitor.
Of those who don’t immediately abandon, up to an
additional 24 percent will delay the
process
.

The survey found that any disruption
matters. Asking people to scan and email documents or use a
separate identity portal causes almost as much application
abandonment as asking them to visit branches or mail in
documents.

This survey was conducted in
January 2021 by an independent research
company adhering to research industry standards.
1,000 New Zealand adults were surveyed,
along with 13,000 consumers in the
USA, UK, Canada, South Africa, Australia, Indonesia,
Malaysia, The Philippines, Vietnam, Thailand, Brazil,
Colombia and Mexico
.

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

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