Consumer insight into their compliance onboarding experience.

Original research conducted by RegTech Associates on behalf of PassFort shows the impact on institutions of compliance management and financial crime goes beyond crippling fines deep into the customer lifecycle.

September 22, 2021, London: A piece of original research conducted by RegTech Associates on behalf of PassFort, the SaaS RegTech provider whose platform automates financial crime and compliance processes, has revealed that customers who reported a better than expected compliance onboarding experience in the last 12 months were much more likely to remain loyal, advocate for their brands and acquire more products than those whose experience was worse than expected. These results underline the importance of delivering outstanding service along the whole customer lifecycle.

The survey was conducted in July and August 2021 and addressed a representative sample of 500 UK financial services consumers who had acquired a new financial product in the past twelve months. Products had been acquired from a mix of high street banks, challenger banks, mobile and digital banks and building societies. Those who had a worse than expected compliance onboarding experience* were much more likely than their peers to believe their providers did little to protect them from financial crime**. They were also much more likely to underestimate the penalties facing providers, with one-third (32 percent) assuming they would get no more than a “slap on the wrist”***.

Announced today to coincide with Donald Gillies’, CEO, PassFort, panel discussion at Money 20/20, the research highlights consumer attitudes towards their providers and the outcomes they drive, as well as digging more broadly into their perceptions of risk, experiences of fraud and views on the current UK debate around digital identity.

Regulatory technology that supports know your customer (KYC) compliance in financial institutions has historically been viewed as a cost burden. However, the findings revealed today clearly show a positive trend for those providers who execute well. The case for business benefit or value-add can clearly be seen in the correlation between consumer attitudes towards positive compliance onboarding experiences and a likelihood to go on to purchase additional products.

In fact, as a result of their interactions, those customers who received a better than expected experience of compliance onboarding described themselves as:

  • more likely to recommend their provider (77 percent, which was more than double the rate of 32 percent for those whose experience had been worse than expected)
  • more likely to buy more products (60 percent, which was almost 3.0x the rate of 21 percent for those whose experience had been worse than expected)
  • less likely to make a complaint (50 percent, versus only 14 percent for those whose experience had been worse than expected)
  • less likely to switch providers (49 percent, more than 2.5x the rate of 18 percent for those whose experience had been worse than expected)    

“The complex compliance landscape has been under even more pressure with the impact of the pandemic. 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,” said Dr Christine Bailey, CMO, PassFort. “The compliance onboarding process shouldn’t be seen as a cost burden to financial institutions. 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.”

Far from being an unseen element of the customer journey, KYC at onboarding can be a differentiator for financial institutions. As financial crime increasingly dominates our headlines, the public are becoming aware of the value and vulnerability of their digital identity. One of the many legacies of Covid is that consumers are demanding more from the organisations they engage with across the board and trust ranks highly on that list of expectations.

“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. For example, in 90 percent of cases, customers who received a better than expected compliance journey would describe their provider as “trustworthy”, while 88 percent would say their provider was “efficient”. In contrast, for those whose experiences undershot expectations, the figures drop sharply, to 64 percent and 39 percent respectively,” commented Rob Stubbs, Head of Research at RegTech Associates. “Despite many customers telling us their experience was ‘as expected’ it’s clearly important that providers don’t rest on their laurels.”

“Against this backdrop, firms cannot afford to view satisfactory delivery as being good enough. There is a very real opportunity for engaging valuable revenue streams and enhancing reputation for those who step up,” continued Dr Bailey. “The regulatory landscape is ever changing and incredibly complex, yet we still see an ad hoc approach to regulatory technology across the industry with many firms still relying on heavily manual processes. In the same way we have seen marketing automation revolutionise the marketing function, it’s time to digitise compliance and streamline the entire customer journey.”

About PassFort

Founded in 2015 by Donald Gillies and Henry Irish and headquartered in London, PassFort has supported regulated financial services companies to rapidly onboard more than 5 million customers in 197 countries, then manage risk and compliance standards throughout the customer lifecycle.

Born in the cloud, PassFort’s solutions are designed for the digital economy: hardware-free, affordable, flexible to configure and easy to use, with constant feature innovation and a choice of deployment options. Our low to no-code solution thrives on complexity, solving compliance challenges at scale without being costly to implement or evolve. We support multiple customer types and product lines, with effortless expansion across 211 jurisdictions.

PassFort removes the compromise between compliance and customer experience in the fight against financial crime. More efficiency. Great customer experiences. No compromise.

e. info@passfort.com | w. www.passfort.com | t. @PassFortKYC

About RegTech Associates

RegTech Associates is a research company using its analysis to provide strategic insight and advice to RegTech vendors, regulated institutions and global industry bodies. We bring all sides of the market together to help vendors grow and regulated firms manage compliance more effectively.

Founded in 2017, RegTech Associates is a privately held company based in London. Our experienced team has extensive industry and regulatory knowledge and often collaborates with leading regulators to foster dialogue and industry collaborations. RegTech Associates are also the creators of Radar, the go-to platform for professionals working in legal, risk, or compliance. The digital platform houses thousands of data points for over 1,300 products, an enriched and researched-backed insights library, and a curated industry news feed.

e. info@rtassociates.co | w. www.rtassociates.co | t. @rt_associates | l. /regtechassociates

Footnotes:

*Of the 500 UK consumers surveyed, 6 percent experienced a “worse than expected” compliance journey while purchasing a new financial product in the previous 12 months, while 26 percent had received a “better than expected” experience.

**When asked about how much their provider did to protect them from fraud and other types of financial crime, 36 percent of respondents who reported a “worse than expected” compliance onboarding experience said that their provider did “nothing” or “not much” to protect them, vs. only 11 percent of those who reported a “better than expected” compliance journey.

***When asked about the penalties their financial providers face when they fail to protect customers like them from fraud and other types of financial crime, 32 percent of respondents who reported a “worse than expected” compliance onboarding experience assumed there would be no penalty at all or merely a “slap on the wrist”. This compares with the 19 percent of those who had a “better than expected” compliance onboarding experience who shared that view.