Retail banks are losing 52 per cent of potential customers at the on-boarding stage, an increase of 35 per cent in the last two years.

The figures come from a survey commissioned by digital identity provider Signicat and carried out by Sapio Research among 4,000 consumers across the UK, Germany, The Netherlands and Sweden. It follows up on similar research carried out two years ago.

Banks must comply with Know Your Customer (KYC) and Anti Money Laundering (AML) requirements when on-boarding new customers. This requires personal information to be shared, and identity to be proven. While much of the process can be completed online, in many cases the proof of identity (checking passport, driving license, etc.) phase must be completed in person or documents sent through the post.

The initial 2016 report was focused solely on the UK and found that banks were struggling to on-board consumers thanks to over-reliance on paper processes and a lack of digital identity. 40 per cent of customers were giving up at this last step.

The new research paints an even bleaker picture across Europe, with 56 per cent of UK respondents admitting abandoning applications.

The 2018 report also revealed that almost three quarters of Europeans want their banks to offer a fully-digital on-boarding system, while 52 per cent would be more likely to use additional services from a bank that allowed them to on-board without the need to use paper-based identity.

Consumers were also clear that banks should lead the charge on digital identity, across every country surveyed. Gunnar Nordseth, chief executive at Signicat, stated: “Customers trust banks to supply this identity above governments and social media and in markets where there isn’t a pervasive digital identity scheme, this presents a significant opportunity for banks to increase revenues.”

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