Customer onboarding in 2023: Five statistics financial institutions need to know

Signing up to a new financial product or service should be simple, secure and seamless. But too often, customers are left frustrated by lengthy forms, multi-stage processes, and other elements of friction. As a result, abandonment rates are rising and fraud rates remain high.

Remote purchase fraud in 2022 totalled £400 million, while overall fraud losses amounted to £1.2 billion (UK Finance)

Customers now rightly demand safe, frictionless, touch-of-a-button sign-up experiences from financial institutions – and if they don't get it from one business, they'll quickly go somewhere else. So the question is, how are FSI leaders planning to meet these expectations?

To assess the landscape of customer onboarding in 2023, we conducted exclusive research, asking more than 440 FSI leaders about their tactics, priorities and strategies for the year ahead as the industry faces intense pressure to innovate, compete and disrupt the status quo.

Here are five key takeaways from our study.

1. Most businesses are pursuing growth through better sign-up experiences

96% say customer onboarding is already, or will become, a top priority

FSI leaders understand the critical role of great customer onboarding experiences in business growth. More than half (53%) acknowledged that a substandard sign-up process would inhibit bottom-line success, while 57% said it would lead to operational inefficiencies. When businesses aren't able to capture customers in their moment of purchase, they understand that they risk losing business to rivals able to offer industry-leading onboarding that is swift and seamless.

2. Industry leaders are looking to protect revenue and do more with less

47% say that their onboarding priorities are to lower costs while 46% report that they want to increase efficiencies

Banks, insurers and other FSI organisations are all seeking cost-effective solutions to a range of business challenges. Direct debit scams are a particular source of frustration because of revenue-depleting chargebacks and refunds. While 37% say they want to reduce friction and 33% want to lower the abandonment rate, any onboarding solution that promises to solve these problems must also be easy to integrate with existing tech and help businesses optimise growth.

3. Onboarding innovation will focus on removing friction while enhancing security

FSI leaders expect open banking and AI and machine learning to have the greatest impact on customer onboarding trends

From cryptocurrency to KYC solutions, there is a firm grasp across the FSI industry of how technology is shaping customer onboarding. But the consensus is that the biggest gains for onboarding lie in open banking, AI and machine learning. This reflects a desire to help customers bypass lengthy forms and complex ID verification – by taking advantage of bank-verified data, for example – all while remaining compliant with regulations and maintaining high data security standards.

4. FSIs know that customers face too many stumbling blocks during sign-ups

29% say that due diligence is the top source of onboarding friction, followed by customer data capture (24%) and account set-up (15%)

Financial institutions are generally positive about their current onboarding strategies. 46% say their sign-up process is strong, while 37% believe it's excellent. Despite this, they are continuing to invest in several areas to address onboarding friction – 52%, for example, are exploring identity verification tools. FSI leaders are willing to put money behind reducing friction for customers, even as they spend more carefully on new tech than ever.

5. Leaders are reluctant to take risks with substandard onboarding tech

Organisations say they're held back from adopting new onboarding solutions by lack of resource (53%), lack of budget (50%) and a lack of clarity over the best way forward (46%)

With executives' priority on lowering costs and increasing efficiency, the margins for error are getting tighter. Any potential solution must not only convert more customers with a swift, seamless, state-of-the-art experience, but prevent scams and remain compliant. That's why customer onboarding solutions must offer a holistic, all-in-one solution that can protect against fraud, offer frictionless experiences and sign customers up in a matter of seconds.

How are leading FSIs disrupting the sign-up experience?

Dive deeper into the top operational priorities and challenges of your peers and explore the future of onboarding in our new report here.