Nearly two-thirds of European consumers abandoned digital banking applications in 2020

• European consumers are abandoning digital banking applications at a higher rate than in 2019.
• To curtail application abandonment, European banks will turn to fintech partners and ramp up investment in their digital onboarding capabilities.
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The percentage of European consumers who abandoned a digital banking application surged from 38% in 2019 to 63% in 2020, per Signicat. This represents the highest rate of abandonment since the survey’s inception in 2016.

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Lockdowns across Europe and reduced branch opening hours have accelerated customer migration to digital channels and shone a light on banks’ onboarding experience. In turn, this has increased customer demands: They will no longer tolerate a non-seamless digital process, noting complexity and the length of an application process as two major factors that lead to abandonment.

To curtail application abandonment, European banks will ramp up investment in their digital onboarding capabilities, and digital identity verification regtechs will see accelerated revenue growth as a result.

Banks will focus investments on ensuring a fully digital onboarding process while mitigating the increased risk of fraud. Sixty-eight percent of European consumers expect a 100% digital onboarding experience going into 2021, per Signicat. Consequently, banks will increase their investments in onboarding solutions that digitize the traditionally manual process, such as esignature technology. On the other hand, banks need to balance the pressure to expedite onboarding with the increased risk of fraud that has accompanied the pandemic, as cybercriminals seek to profit from increased online activity. Thus, banks will prioritize investment in digital onboarding solutions that improve their process while also mitigating the heightened risk of cyberattacks.

Digital identity verification regtechs will continue to benefit from rising customer expectations and digital channel growth. Several global digital identity verification regtechs witnessed strong revenue growth in 2020, such as Onfido and Trulioo, as banks scrambled to adjust to an influx of digital users. Banks will continue to turn to regtechs in 2021 as social distancing requirements persist and customer onboarding expectations continue to rise. As a result, strong customer growth will persist among leading regtechs—and some will look to capitalize on increased investor interest in their services by pursuing IPOs.

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