Analytics software firm FICO has unveiled its latest global consumer fraud research, highlighting that consumers in the Philippines have a low tolerance for inefficient digital experiences when opening an account via mobile app or website.
According to the study, Filipinos selecting a new financial account place a high value on both good fraud protection and ease of use.
Three in five (59%) expect to answer 10 questions or less or they will abandon a personal bank account application. Just over one in four (26%) will drop out if asked more than five questions.
Regardless of the number of questions asked, one in five Filipinos will give up on a personal bank account application after 10 minutes.
“The growing ubiquity of digital banking services means that Filipinos now increasingly expect a frictionless banking experience, especially when opening accounts,” said Aashish Sharma, Asia Pacific segment leader for risk lifecycle and decision management at FICO.
“Our research reveals that streamlining these processes will be key in financial institutions retaining customers and enhancing satisfaction.”
In the past year, more than half of Filipinos have noticed more identity checks when they log in to bank accounts (58%) or make an online purchase (61%).
This increase in identity checks by Filipino banks is a direct response to the significant issue of identity theft in the country.
Just 5% have confirmed that their identity has been fraudulently used to open an account, but one in four (26%) suspects that it has.
Despite this, frustration with identity checks can alter consumer behavior. The survey revealed that one in four 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.
Filipino consumers show varying levels of patience for different account opening processes. They are most likely to abandon personal bank account applications (32%) due to complex or time-consuming identity checks.
Close to one in three (30%) have abandoned savings account applications for the same reason, while roughly one in five (21%) have been frustrated enough to abandon mortgage applications.
Additionally, only 6% of Filipino consumers feel comfortable opening a mortgage account through digital channels, while more than half (52%) 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.
“As banks encourage more customers to use digital services by promising faster online loan approvals, reducing consumer frustration caused by lengthy identity checks must be an imperative,” added Sharma.
“Nearly half of Filipinos (49%) will not complete a digital mortgage application if it has more than ten questions, and more than half (59%) of personal loan applicants will abandon the process after ten questions.”
When asked about the benefits of opening an account digitally via the provider’s app, the ability to open an account at any time (70%) was identified as the top advantage followed by ease of use (58%).
Similarly, Filipinos ranked the ability to apply to open a financial account at any time (75%) as the top advantage via the provider’s website, followed by speed (69%).
In contrast, four in five Filipinos (82%) believe in-branch applications offer better security, with just over one in three counting security as a benefit of digital account applications via the provider’s app (36%) or via the provider’s website (33%).
“Ease of use should not be compromised in favor of security and anti-fraud measures,” noted Sharma.
“Consumers are expecting banks to fulfill both demands by leveraging technologies like improved identity verification, transaction history analysis, open banking and government databases. They are seeking smarter onboarding processes and identity checks, not riskier processes, and the key to this is ensuring the appropriate friction for each product and transaction.”
The survey was conducted in November 2023 and covered 1,001 Filipino adults, along with approximately 12,000 other consumers in Canada, US, Brazil, Colombia, Mexico, India, Indonesia, Malaysia, Singapore, Thailand, UK, and Spain.
