A new study on financial app use in Europe shows that most consumers don’t complete the onboarding process of financial services applications. Worryingly, this drop-off rate is actually increasing year on year. Here are the key findings from the report, and what this means for banks and lenders in Sweden.
1. More Swedes year on year abandon the flow
According to the report from Signicat, financial service providers still aren’t getting onboarding right. In 2022, 69% of Swedes dropped out of the onboarding process of a financial app. What’s more; the number of end-users abandoning the flow is actually increasing. In 2020, the drop off rate in Sweden was 66%.
2. Poor user experience negatively impacts future business
Not only does a poor onboarding experience lead to user abandonment and create a gap for competition, it also creates further negative impacts on repeat business. More than half of respondents said they would be less inclined to use a provider again if they experienced a bad onboarding process. A third said they would also warn friends to stay away.
3. Swedes expect speed
Swedish consumers are used to getting what they want at the click of a button. In fact, 59% of Swedes said they would abandon a flow in a financial app if it took more than 20 minutes. 27% of Swedes said onboarding processes took longer than expected and the top reason for quitting the application process in Sweden was because it took too long.
4. The digitally mature Nordics have the highest abandonment rates in Europe
Signicat identifies the ’Expectation Paradox’ where digitally mature customers have the highest expectations. As markets mature, applications don’t become more complex, people just expect things to be simpler. If these needs aren’t met, consumers abandon the flow.
Abandonment rate in the Nordics:
- Finland: 77%
- Denmark: 73%
- Norway: 72%
- Sweden: 69%
5. Swedish banks and lenders risk losing Millennials and Gen Z
The report shows that younger Swedes (18-44 years) are more likely to drop out of the application process. Given the size and purchasing power of these segments, financial institutions should be prioritising their attractiveness towards them, as neobank and fintech challengers are.
What these findings mean for banks and loan providers in Sweden
Today banks still enjoy high levels of trust, but this is no reason for complacency as the above findings clearly show. Financial services providers must adapt to the changing digital needs of consumers else they risk losing valuable customers and marketing spend on acquisition both now and in the future.
Rather than taking on the challenge of building their own products, banks and lenders can partner with service providers who hold local market expertise and industry recognised technology. So they can leave technological complexities to the experts and instead focus on other business critical areas.
How Monthio can help banks and lenders in Sweden
Monthio is a creditworthiness assessment solution for banks and other financial institutions that makes the process of applying for a loan quicker and easier for both the borrower and lender. In fact, the process is so intuitive that 91% of end-users complete the application process for a loan when banks or lenders use Monthio.
Monthio’s intuitive creditworthiness solution uses open banking and other financial data to provide a 360 financial overview in real-time, including income and expenses verification and extensive insight into risks and warnings. This means that loan applicants do not manually have to enter this information, decreasing the effort needed to finish an application significantly.
All the consolidated data is presented in one easy-to-use dashboard, meaning quick and easy decision making for credit advisors at banks or other financial institutions.