Financial service providers must adopt a robust hybrid-banking model to retain customer trust and ensure easy account openings

FICO (NYSE: FICO):

Highlights:

• 69% of consumers rank good fraud protection in their top three considerations when choosing a financial service provider.
• 65% of customers still find value in the information and services available at brick-and-mortar banks.
• Nearly 70% of customers expect to spend less than 30 minutes opening a checking account; if the identity verification process is too time consuming, almost a quarter of consumers will abandon the application.

Leading global analytics software company, FICO, today released new research showing the need for financial services providers to provide robust hybrid banking models to meet customers’ evolving demands. The report surveyed approximately 1,000 Americans on how they feel financial institutions are managing their digital banking experiences. The research underscores the fact that banks need to address customers’ top concerns, such as fraud and identity protection, while delivering more personalized experiences to increase consumer trust and create positive user experiences.

More information: https://www.fico.com/en/latest-thinking/ebook/fraud-identity-and-digital-banking-consumer-survey-2023-usa

Despite a digital-first era, only 28% of respondents state that finding the information and advice they need is an advantage of using an app to open a financial account; for websites, that figure drops to 24%. This compares to 65% who rate access to advice and information as an advantage of using a branch, suggesting that face-to-face interactions strengthened by personalized experiences can lead to better outcomes.

“Financial institutions must work harder to meet customers where they are – whether in person or through digital and in-app interactions. By deploying an intelligent, multi-channel communication approach to support customers, banks can deliver personalized, timely services while increasing consumer trust,” said Adam Davies, vice president of product management at FICO.

When opening a new account, time is of the essence. And while 37% say they are more likely to open a financial account digitally than they were a year ago, approximately a quarter say they abandon opening a checking account altogether if identity verification is too difficult or time-consuming. Another source of frustration stems from the number of questions asked during the application process, with 51% saying they are only prepared to answer up to 10 questions.

Fraud Protection and Trust are Paramount Throughout the Customer Lifecycle

Key findings from the research show that good fraud protection can be a competitive advantage. A third of respondents (32%) note that strong fraud protection is the most important consideration when opening a new account. Having that added security is also why most respondents (76%) cite why they prefer to open a financial account in a branch and a further 65% who say they can get the information or advice they need in person rather than via a website or app. By building consumer trust and investing in customer experience, financial services companies are more likely to succeed longer term.

“Providing a curated and personalized customer experience whether in digital channels or in branch can not only build trust but could reduce customer churn and lead to better outcomes that lower fraud losses,” added Davies.

Additionally, the survey reports that 12.3% of respondents say their stolen identity has been used to open a financial account, equating to over 32 million people. As a majority noted, customers are more worried about banking-related fraud, with fraud resulting from stolen cards and identity theft leading to application fraud as the most likely to feature in their top three most concerning fraud types. Of the 13 countries surveyed, only India (12.6%) reported a higher rate of application fraud based on an individual’s stolen identity than the United States. Similar economies such as Canada (5%) and the UK (4.3%) reported much lower levels.

Communication For Good Fraud Management

Financial institutions must effectively communicate to manage different fraud types across the customer lifecycle and address customer concerns. Delivering personalized and timely communications addressing all fraud types across different portfolios and channels enables organizations to put the customer at the heart of fraud strategies, leading to a positive impact on customer retention.

“By offering hyper-personalized experiences through FICO Platform, banks can deliver individual and timely communications about the banking process directly to customers,” added Davies.

FICO Leads in Enterprise Fraud

Additionally, Chartis Bank has once again ranked FICO as a leader in the Enterprise Fraud Solutions 2023 Market Update and Vendor Landscape. Chartis noted FICO’s range of capabilities and excellence in analytics ensures that the company helps financial institutions stay protected from the scourge of fraud even as criminals develop new and inventive ways to attack.

FICO will showcase its new innovations and use cases for FICO® Platform at FICO® World, FICO’s premier client event held April 15-18, 2024, in San Diego. For more information on the latest enhancements to FICO Platform, please visit:

• Fraud, Identity, and Digital Banking Consumer Survey 2023 USA: https://www.fico.com/en/latest-thinking/ebook/fraud-identity-and-digital-banking-consumer-survey-2023-usa
• FICO Platform: https://www.fico.com/en/fico-platform
• FICO World 2024: FICO.com/en/events-webinars/fico-world-2024

About FICO

FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 200 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, insurance, telecommunications, health care, retail, and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by 90% of top US lenders, is the standard measure of consumer credit risk in the US and has been made available in over 40 other countries, improving risk management, credit access and transparency.

Learn more at https://www.fico.com/en.

Join the conversation at https://twitter.com/fico & https://www.fico.com/blogs/.

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The research underscores the fact that banks need to address customers’ top concerns, such as fraud and identity protection, while delivering more personalized experiences to increase consumer trust and create positive user experiences.