Why 1 in 2 Indians reject bank applications: FICO survey insights

Aug 9, 2024

By: Prerna Tyagi

Credit: iStock

​Hurdles to the digital banking boom in India ​

India’s digital banking landscape is expanding rapidly, but complex identity checks are causing frustration among consumers. Discover how this issue is leading to a high rate of abandoned bank accounts and credit card applications.

​Ease of use is the king​

Indians value ease of use above everything else when opening a new financial account. A significant 58% will abandon the process if they have to answer more than 10 questions. Simplification is key to retaining customers.

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Frustration leads to abandonment​

If more than five questions are asked, 1 in 4 Indians will immediately drop out of the application process. The longer the process, the higher the chance of losing potential customers.

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​The importance of time​

No matter how many questions are asked, time is a critical factor. One in four Indians will give up on a personal bank account application if it takes more than 10 minutes to complete. Speed matters in digital banking.

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​Friction vs. Fraud ​

Identity theft is a growing concern, leading to increased identity checks by banks. However, this has caused frustration, with 40% of consumers reducing or stopping the use of their accounts due to cumbersome verification processes.

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Mortgages vs. Personal Loans​

Consumers show varying levels of patience depending on the financial product. While 56% abandon savings account applications due to complex checks, only 33% are frustrated enough to quit mortgage applications. Understanding these nuances is crucial.

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Online vs. In-person​

Despite the convenience, only 16% of Indians feel comfortable opening a mortgage account online. A significant 34% still prefer to apply for personal loans in person at a branch. Trust in digital channels needs to be strengthened.

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​Digital Advantages​

While ease of use (73%) and speed (68%) are seen as the main benefits of digital applications, 75% of Indians believe in-branch applications provide better security. Banks need to balance these factors to meet consumer expectations.

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​Security still matters​

Consumers are not willing to compromise on security. They demand smarter, more efficient onboarding processes that combine ease of use with robust anti-fraud measures. Banks must focus on intelligent identity verification.

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​What banks must do​

To retain and attract customers, banks must simplify account opening processes without compromising security. Leveraging technologies like open banking, improved ID verification, and transaction history analysis is essential.

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​Survey insights​

FICO’s survey highlights the growing expectations for ease of use in digital banking. However, banks must carefully balance these demands with strong security measures to prevent fraud and retain customer trust.

Credit: istock

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