According to the latest report from FICO, one in three Indonesians abandon opening a personal bank account due to complex identity checks.
Global analytics software firm FICO unveils its latest global consumer fraud research, highlighting that consumers in Indonesia have a low tolerance for inefficient digital experiences when opening an account via mobile app or website.
According to the study, Indonesians selecting a new financial account prioritise ease of use above all else.
Three in five (57%) expect to answer 10 questions or less or they will abandon a personal bank account application.
Just over one in five (22%) will drop out if asked more than five questions.
Regardless of the number of questions asked, close to one in three Indonesians will give up on a personal bank account application after 10 minutes.
Commenting on their findings, FICO APAC Segment Leader Aaishish Sharma says that Indonesian consumers are actively looking for digital banking services with smooth and effortless account opening experiences.
“Our research reveals that by simplifying these processes, financial institutions can improve customer retention and satisfaction,” says Sharma.
Friction Frustration Exceeds Fraud Worries
In the past year, close to half of Indonesians have noticed more identity checks when they log in to bank accounts (49%) or make an online purchase (47%).
This increase in identity checks by Indonesian banks is a direct response to the growing issue of identity theft in the country. Only 3% of Indonesians have confirmed that their identity has been fraudulently used to open an account, but one in four (26.5%) suspect it.
Despite this, frustration with identity checks can alter consumer behaviour. The FICO 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.
Mortgages and Loans Application Process Deserve More Scrutiny
Indonesian consumers show varying levels of patience for different account opening processes. They are most likely to abandon personal loan applications (38%) due to complex or time-consuming identity checks.
Close to one in three (33%) have abandoned credit card applications for the same reason, while over one in four (28%) have been frustrated enough to abandon mortgage applications.
Additionally, only 7% of Indonesian consumers feel comfortable opening a mortgage account through digital channels, while a significant 35% prefer to apply for personal loans in person at a branch, rather than opting for online alternatives.
According to Shama, 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.
“Banks promoting the use of digital services for quicker online loan approvals need to address the frustration caused by complicated and prolonged identity checks. Half of Indonesians (47%) will not complete a digital mortgage application or a personal loan application (51%) if it has more than ten questions,” says Sharma.
Appreciation for Digital Application Advantages
When asked about the benefits of opening an account digitally via the provider’s app, ease of use (81%) and the ability to open an account at any time (81%) were identified as the top advantages. Similarly, Indonesians ranked the ability to open an account at any time (82%) and anywhere (81%) via the provider’s website as the top advantages.
In contrast, four in five Indonesians (81%) believe in-branch applications offer better security, with only one in two (51%) counting security as a benefit of digital account applications via the provider’s app, and less than half (45%) via the provider’s website.
“Providing convenience and ease to consumers should not undermine security and anti-fraud measures. Consumers are looking for smarter, not riskier processes. Technologies like improved identity verification, transaction history analysis, open banking, and government databases can save them time without compromising security. The key is finding the right balance between security and ease of use, especially for high-value products and interactions,” says Sharma.
Notes from the Editor: According to FICO, the survey was conducted in November 2023 by an independent research company adhering to research industry standards. 1,001 Indonesian adults were surveyed, along with approximately 12,000 other consumers in Canada, U.S., Brazil, Colombia, Mexico, The Philippines, Singapore, Malaysia, India, Thailand, U.K. and Spain.
