How has Covid-19 affected customer onboarding in banking?


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24th June 2021

Since the start of lockdown, the way we lead our lives has moved online. Through necessity, most people have been forced to work from home – and some day-to-day activities, such as shopping and banking, have adopted a greater digital element too.
It remains to be seen whether the changes we made during the pandemic will become permanent, or whether some things will return to the way they were before lockdown. However, many analysts agree that Covid has dramatically accelerated banks’ digital transformation efforts.
“We’ve accelerated digital adoption by about 10 years,” proclaims Steven Habbi, Head of Global Brand Design and Management for HSBC. “That’s really required a massive focus and investment in digital adoption and transformation to keep up with the expectations that customers now have.”

Accelerated expectations

While many retail consumers were tech-savvy before Covid, the past 18 months have seen the B2B space catch up. There is no longer a difference in expectations between B2C platforms and B2B ones, Habbi says.
“Just because somebody’s doing a B2B service, doesn’t mean the experience should be less or a back-of-house, doss kind of interface, which I think if you look at a lot of B2B experiences that’s what they were – so it’s really nice to see that the B2B world is meeting parity and in a lot of cases exceeding parity with the retail world. They’re the same customers – they go home in Ubers – so I think they have the same expectations.”
While this is a good thing for digital adoption, it poses significant challenges in terms of fraud. According to data published by Barclays, the number of reported scams in the first half of 2020 rose by 66% compared to pre-Covid levels – showing how criminals have ruthlessly exploited our time spent at home to steal money from bank customers.
The increase in volume of scams has been reflected by a rise in the value as well, with Barclays pointing to a 7% increase between June and July 2020. Scams relating to travel and social media were prevalent – but the bank paid particular warning to investment scams, which it said had reached the highest level of volume that Barclays has ever seen. As well as being just as serious as other financial fraud, investment scams often take longer to be reported as it takes defrauded consumers longer to realise that they have been a victim.

Covid's impact on fraudsters

Not only has Covid affected the way regular people work – it’s affected the way criminals go about their activity, too. So says Reuben Sagar, Regional Director at Onfido.
“Fraudsters, I think we should all remember, are faced by the same challenges as normal customers,” Sagar says. “They are seeing branches being closed, which was previously an opportunity for them to attack platforms. They are also seeing more services move online, which creates a great opportunity for them to attack and complete signups for illicit purposes. That’s really shifted what we see in terms of the amount of fraud that is occurring on digital platforms. So we’ve seen a massive increase over the last 12 months.
“We’ve also seen a change in terms of fraudster behaviour. We, as non-fraudulent people, have all seen the bleeding of our day-to-day lives and our work lives coming together as one, as we work from home. We’ve also interestingly seen from our data that same behaviour from fraudsters. Pre-Covid we tended to see fraudulent activity occurring 9–5, Monday–Friday; it was pretty much a day job. Post-Covid we saw that change completely. It’s now a Monday–Sunday job, working hours have gone out the window, so fraudsters are facing the same challenges as we all are in terms of work taking over.”
The prevalence of financial crimes has highlighted the importance of robust digital experiences. Where consumers understand the messaging that they expect from their banks – and crucially, where that messaging is consistent across all touchpoints – they become better equipped to spot an impostor.
Dan Klein, Regional Director at automation specialists Zühlke, says: “If you have an inconsistent experience with your bank – that might be that there’s 3 or 4 different mobile apps, there’s 3 or 4 different channels in terms of communicating with you – and the language and the way they communicate with you as the customer, whether this is corporate banking or retail banking it’s the same, if you have an inconsistent experience you allow the criminal community to exploit that because you as the consumer – or the user in a corporate sense – will not have a consistent understanding of exactly how the bank is going to be talking to you.
“I always applaud banks that have a very clean, coherent customer experience whether it’s telephony or digital. Why? Because then the consumer is not confused when they see something that doesn’t look right. So then they spot fraud. They think ‘this isn’t how I’m normally communicated with’. There are some very large legacy banks floating around with some appalling customer experience that is utterly inconsistent across the patch, and unsurprisingly they are deeply affected by fraud because the criminal community exploits the vulnerabilities associated with social engineering.
“This is where creating good customer experience that is absolutely coherent with the brand gives the customer confidence that, when they see something that doesn’t look right, they’re comfortable that it isn’t actually the bank – it’s something else.”

Getting the experience right

“We need to make sure that the marketing and media and all those things that prime the customer align with the digital experience,” Habbi says. “The last thing you want to do is take the user down a journey that didn’t align with the expectation that they had.”
Habbi suggests using features like progress bars and motion in onboarding journeys to give consumers greater insight into where they are and what they’ve still got left to complete. And Reuben Sagar claims that banks can embed greater consumer confidence into digital platforms by incorporating new technologies, such as biometrics, into processes beyond onboarding.
“Onboarding hasn’t resolved but we have seen a new baseline in terms of customer expectations in regards to what digital onboarding processes should look like. As [banks] now start to think about the general ecosystem for their customer, I think we’re starting to see other interesting changes occurring. I think use of biometrics beyond onboarding, so in the general life cycle of a customer, is one of those really interesting areas. How can we leverage biometrics for step-up authentication around password resets, credit card requests, whatever it might be. Customers are expecting us to do more there to create seamless flows and leverage AI to support with reducing down friction beyond just onboarding.”
You can hear more from our expert panellists on the topic of seamless customer journeys and onboarding by watching the full live session on demand here: Seamless Customer Journeys and Digital Onboarding in Financial Services.