Research

Better User Onboarding and Verification with the Help of Open Banking

Many businesses struggle with getting new users to complete their sign-up flow. This is a particularly difficult issue for industries with strict onboarding requirements, such as money remittance businesses.
Many businesses struggle with getting new users to complete their sign-up flow. This is a particularly difficult issue for industries with strict onboarding requirements, such as money remittance businesses.
February 23, 2024
5 min read

Handling Onboarding Challenges Across Industries

In sectors such as fintech, cryptocurrency, and money remittance, the onboarding and verification process for new users can be quite challenging. The strict requirements of KYC, regulatory protocols, and compliance standards mean that collecting and verifying a lot of customer information is necessary.

Creating a smooth onboarding experience within this framework is a difficult task, even for major players. There are well-known brands struggling with onboarding processes that involve more than 30 screens. 

The outcome is often disappointing conversion rates. On average, these types of companies can see 60% of users dropping off before completing a sign-up flow, and for many businesses this number can be even higher.

Identifying the Key Drop-Off Points

Based on YouGov's survey of 1,274 UK customers across financial services platforms, we have pulled out some learnings that are key to making improvements during onboarding.

The primary factors that can trigger customers to abandon an onboarding journey include:

  • Excessive time or steps required to onboard, exacerbated by manual entry of information, such as email addresses or payment account details
  • Concerns around information security
  • Prolonged waiting times for verification of details

Every time potential new customers are asked to manually input information, this introduces friction and contributes to drop-offs. On top of slowing down the process of onboarding, manual data-entry can also introduce additional downstream issues such as reduced data quality. More manual input leads to:

  • Increased likelihood of errors, which translates into demands on customer support later on
  • Heightened fraud risks, with bad actors using incorrect information to create one or multiple accounts with the intention to commit fraud
  • Increased susceptibility to abuse of offers or referral programmes, leading to increased costs on these programmes

Understanding and addressing these factors is crucial for optimising the onboarding journey, minimising customer drop-offs, and ensuring verification of customer identity.

Crafting an Optimal Sign-up Experience

What constitutes a stellar sign-up experience? Survey results point to a few key benchmarks that are crucial for shaping an effective journey:

Efficiency is Key:

Aim for account creation to be completed within 10 minutes. If it can be kept below 5 minutes this will help reduce drop-off even further. A staggering 43% of individuals are only willing to invest a maximum of 10 minutes in signing up, while anything exceeding 30 minutes results in near-complete abandonment.

Money Remittance Impatience:

Money remittance respondents seem to be even less patient, with 68% willing to spend no more than five minutes on the process of onboarding to a new money remittance service.

Time-Saving Tactics:

Streamline onboarding by initially collecting only essential information. Embrace technology, such as open banking, to minimise manual input (explore more below).

Swift Verification is Crucial:

When it comes to verification of the details customers have provided, optimal conversion rates are linked to completing this within 30 minutes. This is the expected wait time of 86% of respondents. Waiting periods of over 24 hours exceed most customer expectations and prompt significant churn.

Risk-Based Approach:

Employ a risk-based strategy, utilizing thresholds and personalization, to trigger enhanced due diligence checks post-user signup. Balancing effectiveness with minimizing friction is essential.

Power of Open Banking in the Verification Process

At Volume we've helped numerous businesses enhance their signup and payment experiences through open banking with our One-Click Verification product. Discover four impactful ways open banking can revolutionize your processes:

Streamlining Data Input

Based on our research, nearly 71% of individuals have abandoned an onboarding process due to manual data entry requirements. Open banking addresses this by connecting directly to a user's bank, fetching essential information such as the account holder's name and address without the need for manual input.

Heightening Security Measures

Data security concerns can often lead to sign-up abandonment, as cited by one third of respondents in our study. Open banking emerges as a secure solution, minimizing data input and avoiding the sharing of sensitive details during onboarding. Users trust their banks, and have expressed a preference for bank-validated verification processes over processes involving third parties.

Open Banking and Account Creation

One-Click Verification leverages open banking to expedite KYC-compliant onboarding. With one click, new customers can provide most of the crucial data needed to engage in money remittance, gaming, or trading transactions. One-Click Verification utilizes open banking to pull customer data from their banks, facilitating auto-population of signup forms and secure user authentication.

Accelerated Verification Process

Verification requirements vary across industries and regions, but the need to confirm user identity or age remains constant. Open banking APIs empower businesses to verify account holder name or address and expedite due diligence checks on income, affordability, and source of funds.

How to implement One-click User Verification?

One-Click Verification from Volume simplifies account creation and KYC verification. Powered by open banking, it speeds up KYC-compliant onboarding with one click in a customer’s bank app – so they can get started in your app right away. Contact Sales

Volume Payments Limited is a private limited company with company number 12431529

Volume Payments Limited, is a distributor of Modulr FS Limited, a company registered in England and Wales with company number 09897919, which is authorised and regulated by the Financial Conduct Authority as an Electronic Money Institution (Firm Reference Number: 900573) for the issuance of electronic money and payment services. Your account and related payment services are provided by Modulr FS Limited. Whilst Electronic Money products are not covered by the Financial Services Compensation Scheme (FSCS) your funds will be held in one or more segregated accounts and safeguarded in line with the Electronic Money Regulations 2011. for more information please see the Modulr safeguarding letter

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