FICO, a global analytics company, has released its second annual Consumer Digital Banking study that found consumers across the US and Canada have embraced digital banking and biometric identity proofing during the COVID-19 pandemic.
The study found that almost half (41%) of North American consumers are more likely to use digital means to open a financial account than a year ago, while almost a third (32%) are less likely to visit a branch to open a new account.
“In an effort to help stop the spread of the virus, consumers across North America have accelerated their move from brick-and-mortar branches to digital banking channels,” said Liz Lasher, vice president, FICO. “As a result, consumers’ expectations have shifted, placing a higher priority on having a seamless and engaging digital experience, which includes establishing account security. For financial service providers, this means tomorrow’s success will rely on having the right platform to deliver enhanced customer experiences, improved fraud protection and financial crime compliance.”
Higher Digital Banking Consumer Expectations
Consumers across North America expect a seamless, uninterrupted experience when opening accounts digitally, either using a website or a mobile app. They also don’t want to be forced to use another channel to complete tasks, particularly those associated with identity proofing. Specifically, Canadian consumers have higher expectations about the tasks they should be able to complete digitally than those in the US. Canadians expect to be able to prove their identity (70%), prove where they live (60%) and set up biometric security (45%) within the digital channel they used to make the application. Whereas for Americans, these expectations drop to 62%, 52% and 42% respectively.
With this shift towards digital-first banking, identity proofing and biometrics have become increasingly top of mind for consumers as identity theft is a real threat for people across North America. In the US, 11% of people believe their identity has been used by a fraudster to open an account, compared to 6% in Canada, which is equivalent to 23 million Americans and 660,000 Canadians. As a result, more than two-thirds of Americans (72%) and Canadians (68%) acknowledge that banks’ identity proofing is vital to protecting them from fraud.
Once accounts are open, the vast majority of consumers across North America are happy for their banks to use biometrics such as facial scan, fingerprint and/or voiceprint to protect them. The survey found that 76% of Americans and 74% of Canadians would be happy to do this, with over 40% (US 42%, Canada 45%) even expecting biometric account logins to be set as part of the account opening process.
People Need to Develop a Skillset to Use Apps to Open Financial Accounts
The survey also found that when consumers are asked to move out of channel to prove their identities, for example by mailing documents, visiting branches or even sending scanned documents by email many of them will abandon the application. On average, 25% of Americans will go to a competitor or abandon the application completely, which dips slightly for Canadians at 21%.
While a significant portion of consumers can carry out the tasks needed to open a bank account using a mobile app, some will need help; particularly when they need to verify their identity. In general, a slightly higher percentage of Canadians say they can carry out these tasks compared to those in the US:
- Download the provider’s mobile app: 53% (US) vs 57% (Canada)
- Provide a selfie: 37% (US) vs 38% (Canada)
- Scan documents such as a passport or driver’s license: 46% (US) vs 47% (Canada)
- Scan a QR Code: 41% (US) vs 42% (Canada)
- Scan your fingerprint: 41% (US and Canada)
“Consumers embraced the digital-first economy during the past 12 months, but how, when and what digital channels they prefer still varies greatly across demographics,” added Lasher. “For banks, it’s critical they understand their customers and deploy solutions and policies that can operate across channels and adapt to their customers evolving preferences.”
FICO’s Consumer Banking Survey was conducted between December 2020 and January 2021 using an online, quantitative poll of 14,000 consumers across 14 countries, carried out on behalf of FICO by an independent research company. The countries surveyed were Australia, Indonesia, Malaysia, New Zealand, Philippines, Thailand and Vietnam, UK, USA, Canada, South Africa, Brazil, Colombia and Mexico.