Customers who report a better than expected compliance onboarding experience are much more likely to remain loyal, according to research from RegTech firm PassFort.

The research surveyed a sample of 500 UK financial services consumers between July and August 2021 who had acquired a new financial product in the past year, from a mix of high street banks, challenger banks, mobile and digital banks, and building societies.

Of those who had a worse than expected compliance onboarding experience, 36 per cent said they believe their providers did little to protect them from financial crime according to the research.

Those who had a worse than expected experience were also much more likely to underestimate the penalties facing financial services providers, with almost a third - 32 per cent - assuming they would get no more than a “slap on the wrist”.

In contrast, those who had a positive compliance onboarding experience said they were 77 per cent more likely to recommend their provider and 60 per cent more likely to buy more products.

In addition, the research found those who had a positive experience were 50 per cent less likely to make a complaint and 49 per cent less likely to switch providers.

“The complex compliance landscape has been under even more pressure with the impact of the pandemic,” said Christine Bailey, chief marketing officer at PassFort. “There were more than 1,330 pieces of Covid related regulation introduced by August 2020 alone.”

“Couple this with the enforced financial pressures on consumers and a global increase in fraud and financial crime and we have to understand that the perceptions and demands of consumers have shifted. The compliance onboarding process shouldn’t be seen as a cost burden to financial institutions.”

She added: “Instead, what this research starkly demonstrates is the importance of onboarding at the beginning of the customer lifecycle in terms of how it influences customer loyalty, advocacy and future buying decisions.”

“A stand-out result from the survey is the clear connection between the ability of leaders to exceed the customer’s expectations of what their compliance journey should look like, and the positive outcomes that follow,” said Rob Stubbs, head of research at RegTech Associates. “For example, in 90 per cent of cases, customers who received a better-than-expected compliance journey would describe their provider as “trustworthy”, while 88 per cent would say their provider was efficient.”

“In contrast, for those whose experiences undershot expectations, the figures drop sharply, to 64 per cent and 39 per cent respectively.”

He added: “Despite many customers telling us their experience was ‘as expected’ it’s clearly important that providers don’t rest on their laurels.”

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