From Friction to Fluidity: Ensuring Security and User Experience in Finance

In today’s digital world, 81% of people access online services daily. Against this backdrop, verifying identities online has become a new business standard. It’s a yardstick to measure an organisation’s digital readiness and resilience, which is why 1 in 2 end users now encounter digital identity verification (IDV) during the registration process. 

However, increasing commonality doesn’t mean digital IDV is without complication — striking the right balance between robust security and a seamless user experience (UX) is still a significant challenge for a variety of industries - whether that’s healthcare, eCommerce or financial services. 

In financial services, in particular, meeting compliance requirements is a necessity, but can lead to unnecessary friction for customers. On one hand, strong security measures are crucial to prevent fraud and ensure the legitimacy of users. On the other hand, overly complex verification processes can frustrate users and lead to abandoned transactions. In general, 1 in 5 users will abandon account creation due to UX friction, and for younger generations, the abandonment rate rises to 1 in 3.

How can financial services thread the security and UX needle?

Finserv organisations looking to balance security and user experience should look to the following quick-fire tips:

Leverage automation where possible

According to research, end-users (42%) see fraud prevention as the biggest benefit to identity verification. But they almost equally prioritise speed (36%). By integrating with solutions that layer automated solutions, like Optical Character Recognition (OCR) and artificial intelligence (AI), businesses can limit repetitive tasks like data entry and document verification to free users from tedious steps. Automation can also make the authentication process much quicker. By seamlessly running verification checks simultaneously in the background, businesses can onboard end-users more quickly without sacrificing security. 

Minimize data collection, maximize security

Studies show that 92% of end users are somewhat worried about how their data is being stored, while 85% worry that someone could hack into their existing accounts. Only collecting the data that is absolutely necessary for verification purposes will help finserv businesses reduce the risk of data breaches and build trust with increasingly privacy-conscious users.

Utilize clear communication before, during, and after

Of end users who abandoned account creation, 35% did so because it was too confusing. Finserv organisations must ensure their identity verification solutions provide users with clear instructions, reasoning, and step-by-step guidance throughout the verification process. In providing clear communication before, during and after the registration journey, businesses will increase account creation rates, and are likely to retain customers for longer.

Adopt a continuous improvement process

The evolution of digital experiences is happening at a rapid pace, and both regulation and end user expectations are evolving just as quickly alongside them. Financial services should regularly monitor user feedback, implement A/B testing, and use an IDV provider that stays on top of changing requirements to ensure they continue to deliver an exceptional service. 

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A secure digital verification process doesn't have to be another hurdle for users to jump through. But it also doesn’t need to be a make-or-break moment for financial services. By prioritising both security and user experience, businesses can create a smooth and trustworthy online environment for everyone. In addition to these recommendations, choosing an IDV solution that is designed with UX at the core will ensure striking the balance between security and user experience.