Even before the pandemic hit, sectors like retail, gaming or e-healthcare moved quickly to embrace the speed, convenience and experience of digital services – led by technology pioneers like Amazon or Google.

Despite the availability of online tools and support via apps or chatbots, traditional banks and financial institutions have traditionally encouraged consumers to visit in-branch locations.

Since many lacked the tools to securely validate a person’s identity digitally, it was believed that fraud was more difficult to detect in the virtual world. They also had a natural desire to take advantage of their substantial physical presence investments to build solid client trust and loyalty through face-to-face encounters.

However, during the past several years, the epidemic has acted as a digital accelerator for banks as well as consumer demand. Financial services could no longer afford to take their time navigating the digital world; those who do so risk falling farther behind in a society that is fast changing. In fact, a McKinsey analysis revealed that the lockout sped up digitalization by seven years, and an S&P Global study discovered that 60% of consumers visit physical branches less frequently than they once did.

It’s crucial that banks look to pioneers in developing digital experiences, like Amazon, as an example of best practices to follow as they think about how to foster trust and engage with clients in the digital realm.

Putting customers first

Amazon’s devotion to its customers is one of its distinguishing characteristics. It places a laser-like focus on every facet of the user experience and mercilessly streamlines it through ongoing experimentation and A/B tests. The digital experience must be frictionless so the customer may complete the purchase without the assistance of a salesperson. Although Amazon learned this lesson twenty years ago, the traditional financial services sector is only now beginning to confront it.

Nobody would have imagined doing something like buying a mattress online ten years ago. It seemed dangerous just to consider purchasing a pair of sunglasses online without first making sure they look well on your face. Amazon, though, assisted in changing the market’s course. Customers grew accustomed to Amazon’s four-click process: add the item to the basket, checkout, confirm shipping, and buy rather than traveling to the furniture store, trying out a dozen or so mattresses, and then having their preferred mattress delivered a few days later.

In contrast, customers in the financial services sector are required to pass through a myriad of hoops in order to use basic banking facilities. Those who want to open a bank account online must respond to a never-ending list of inquiries meant to confirm their identification. Finanteq discovered that opening a bank account at certain major banks involves more than 120 clicks. When contrasted with the Amazon experience… How many consumers would make a purchase if it required 120 clicks?

Our most recent consumer survey confirmed the value of a seamless customer experience. It was shown that 60% of customers admitted to giving up on an online registration because it took too long, was too complicated, or caused them to worry about the security of their personal information. Poor digital experiences are expected to turn off many customers from banks.

A seamless, simplified client experience is essential, and more importantly, anyone who prioritizes it can achieve it.

Approaching a frictionless journey

Banks are currently attempting to mimic the Amazon experience, and in doing so, many have discovered that a contemporary onboarding process can be the doorway to trust, security, and an improved user experience. In order to comply with anti-money laundering (AML) and know your customer (KYC) regulations, banks don’t have to make their customers answer dozens of questions and go through a number of hoops. Instead, they can restructure their identity verification procedures in a safe and effective way.

How? Many people are deciding to support a new paradigm based on digital identities. Digital identities, which are supported by cutting-edge technology like AI and biometrics, are able to meet the most stringent KYC requirements while also speeding up customer onboarding. This journey toward putting the needs of the client first will enable the financial services industry to emulate Amazon.

However, these technologies are available for use by the entire business and are not just for early adopters. By doing this, banks may take part in the digital identity revolution while simultaneously enhancing client experience and securing the onboarding procedure. However, this is impossible if banks are unaware of how many steps their existing onboarding process entails and where exactly consumers are lost. Competitors with advanced digital skills are winning the war because they have this understanding of who their consumers are, how they are onboarded, and where friction is present.

The financial services sector must also be ready to fundamentally rethink the digital experience and center digital roadmaps around client needs and wishes. With the aid of contemporary technology, banks and other institutions are able to monitor onboarding processes, pinpoint the precise points at which and how the customer acquisition process is stalling, and relentlessly experiment with A/B tests that enhance the user experience and remove roadblocks along the way. Amazon would carry it out in this manner.

In today’s post-pandemic environment, clients prioritize simplicity of use and convenience, and digital is the standard. Financial services must concentrate on developing seamless digital experiences that give consumers the freedom, power, and security to access their assets in the manner that fits them best if they want to win customers’ loyalty and trust.