In a digital-first world, identity verification
must not hinder new business
FICO (NYSE: FICO):
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2 in 5 Malaysians have abandoned opening
a personal bank account after 10 minutes. (Graphic: FICO)
Highlights
- Good fraud protection is the top priority for Malaysians,
followed by ease of use and then value
- Seven in ten consumers expect to answer 10 questions or less or
they will abandon a savings account application
- Identity checks are on the rise but three in ten Malaysians
will stop or reduce the use of existing accounts if the identity
verification experience is poor
Global analytics software leader FICO today unveiled its latest
global consumer fraud research, highlighting that consumers in
Malaysia have a low tolerance for inefficient digital experiences
when opening an account via mobile app or website. According to the
study, Malaysians selecting a new financial account place a high
value on both good fraud protection and ease of use.
Nearly two in three (64%) expect to answer 10 questions or less
or they will abandon a personal bank account application. One in
three (33%) will drop out if asked more than five questions.
Regardless of the number of questions asked, one in four
Malaysians will give up on a personal bank account application
after 10 minutes.
More information:
https://www.fico.com/en/latest-thinking/ebook/consumer-survey-2023-digital-banking-customer-preferences-and-fraud-controls
“Malaysian consumers have rapidly adopted digital banking, and
their expectations are evolving,” said Aashish Sharma, APAC
segment leader for risk lifecycle and decision management at
FICO. “FICO’s research shows a growing demand for seamless
account opening experiences. Financial institutions that can
streamline their processes will be best positioned to retain
customers and improve satisfaction.”
Friction Frustration Exceeds Fraud Worries
In the past year, half of Malaysians have noticed more identity
checks when they log in to bank accounts (51%) or make an online
purchase (49%).
This increase in identity checks by Malaysian banks is a direct
response to the significant issue of identity theft in the country.
Close to one in ten consumers (7%) has confirmed that their
identity has been fraudulently used to open an account, while one
in three (30%) suspects it has.
Despite this, frustration with identity checks can alter
consumer behavior. The FICO survey revealed that three in ten bank
customers have either stopped or reduced their use of existing
personal bank accounts and credit cards, citing the cumbersome and
time-consuming nature of these identity verification processes.
A clear majority of Malaysians (70%) have noticed more identity
checks in the past year when they log in to bank accounts or make
an online purchase.
Mortgages and Loans Application Process More Scrutiny
Malaysian consumers show varying levels of patience for
different account opening processes. They are most likely to
abandon savings accounts (41%) or personal bank accounts (39%)
applications due to complex or time-consuming identity checks.
Close to one in three have abandoned credit card applications
(31%) for the same reason, while close to one in four (24%) have
been frustrated enough to abandon mortgage loan applications.
Additionally, only one in ten Malaysian consumers (11%) feels
comfortable opening a mortgage account through digital channels,
while a significant 47% prefer to apply for personal loans in
person at a branch, rather than opting for online alternatives.
While some consumers are more tolerant of detailed processes for
certain financial products that require thorough scrutiny, the
survey clearly shows that expectations for ease of use remain
high.
“Banks encouraging customers to use digital services for faster
online loan approvals must address frustration caused by complex
and lengthy identity checks,” added Sharma. "More than half
of Malaysians (52%) will not complete a digital mortgage
application (52%) or a personal loan application if it has more
than ten questions.”
Appreciation for Digital Application Advantages
When asked about the benefits of opening an account digitally
via the provider’s app, being able to do it any time (69%) was
identified as the top advantage, followed by being able to open it
anywhere (65%). Similarly, Malaysians ranked being able to open an
account at any time (71%) as the top advantage via the provider’s
website, followed by speed (63%)
In contrast, three in four (77%) Malaysians believe in-branch
applications offer better security, with less than half (44%)
identifying security as a benefit of digital account applications
via the provider’s app, and close to two in five (38%) via the
provider’s website.
“Providing convenience and ease to consumers should not come at
the cost of security and anti-fraud measures,” noted Sharma.
“The challenge lies in finding the sweet spot between security and
convenience, especially for high value products and interactions
prone to risk. Consumers are looking for smarter onboarding
processes and identity checks, not riskier processes. Banks can
achieve this by leveraging technologies like improved identity
verification, transaction history analysis, open banking and
government databases to expedite the process without compromising
security.”
The survey was conducted in November 2023 by an independent
research company adhering to research industry standards. 1,001
Malaysian adults were surveyed, along with approximately 12,000
other consumers in Canada, U.S., Brazil, Colombia, Mexico, The
Philippines, Indonesia, India, Singapore, Thailand, U.K. and
Spain.
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 4 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
www.fico.com
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Lizzy Li RICE for FICO +65 9034 7768 lizzy.li@ricecomms.com
Saxon Shirley FICO +65 9171 0965 saxonshirley@fico.com
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