Instantor, the fast-growing Swedish FinTech that makes tough calls easy within credit risk management, releases the eBook The Rise of Onboarding Abandonment Rates. How to Adapt to Shifting Consumer Demands and Reduce Application Abandonment Rates for Your Business.
Increasing consumer demands for convenient financial services, along with the wave of industry regulations around KYC and AML processes, have prompted Instantor to release this eBook. The eBook will help financial organisations unleash their full potential whilst empowering more individuals to become part of the financing system.
Lengthy, tedious and commonly paper-based bank applications are a real obstacle to higher profits in the financial services industry. Instantor has observed less than 10% of loan applicants prefer an offline application and that less than 50% of manual applications are completed. This is a massive loss. In parallel, end-consumers, particularly Millennials, are demanding more convenient, faster and fully online mobile services. Instantor has seen that circa 90% of loan applicants prefer online applications and that more than 95% of online applicants complete the application.
“We´re on the mission to democratise the financing system and by sharing the insights regarding the importance of a full digitised onboarding process, I truly believe we are acting accordingly. By reading this eBook, financial institutions will be more conscious of what to do to meet business and consumer needs, harnessing the power of AI-based technology,” shares Simon Edström, CEO at Instantor.
Whilst KYC and AML processes are becoming stricter and compulsory across the world, end-consumers are demanding a higher consumer-centred service. Based on a recent study by Signicat, Instantor presents several facts in this eBook. For instance, 56% of consumers in the UK abandoned bank applications in 2018. The reasons included: length, offline procedure(s) involved, privacy concerns and unclear communication. With the release of this eBook, Instantor sees an opportunity to empower financial institutions to tackle this unprecedented challenge.
“As part of our business goals digitising a compliant onboarding process in lending applications is crucial to help our clients impact their net revenue significantly. In Europe, Instantor has managed to decrease onboarding processes times from 24 hours to 15 minutes, increasing profits by 27% and consumer satisfaction,” complements Edström. Swedish player Northmill comments: “Using Instantor cut down our loan handling time from 2 hours to 10 minutes due to it being a much simpler way for our customers to prove their income and verify bank account information.”
Based on the same study, Instantor points out in this eBook that Sweden has the lowest onboarding time of 14 minutes among the analysed European countries, the highest eID knowledge and an abandonment rate of 60%, with reasons different to lack of a digitised onboarding process. Certainly, other factors such as consumers preferences and attitudes play a role. In Sweden, for example, the main reason to abandon an application in 2018 was a simple change of mind. In this market, 30% of the surveyed applicants mentioned this as their main reason for not completing an application.
However, across markets, it has been identified that end-to-end digitised onboarding processes are the most effective way to decrease abandonment rates. As a matter of fact, 61% of UK respondents in 2018 were more likely to complete an application, if the whole process would have been online. Finally, in this eBook, Instantor acknowledges a few remaining future challenges the most significant being the lack of a widely accepted e-ID across Europe. This leaves room for further analysis and discussion. To download the eBook, please click here.