Reducing time to value is crucial when it comes to onboarding new customers to a digital product, whether in fintech or any other domain.
However, with so many regulatory requirements, it can often look like this:
Note: The above screenshots are from Marcus, Goldman Sachs' latest digital experience with savings accounts and investment products.
It’s bad, and it can get much worse…
While digital-only players have significantly improved the process, even the best-case scenarios can take at least 10 minutes. A few months ago, I wrote about Zing, the latest digital bank e-money institution from HSBC, and reviewed their onboarding process, which took around 10 minutes to complete for a simple account or wallet.
That’s a stark contrast to the 36 days it took to open an HSBC personal account just a few years back (I don’t even want to know how long it was for business or corporate accounts!).
10 minutes is still way too long in the instant gratification age.
Add a layer of risk for any lending product, and even the best-case scenarios will take you 2, 3, or 4 times longer.
In comparison, people are increasingly used to single sign-ons like Sign Up with Google or Sign Up with Apple, which allow you to instantly access the product without having to enter your email and set a password.
Simply adding a Google Signup button on a Saas website can easily improve your conversion rate by 25%.
Onboarding abandonment cost $6B per year
With mounting requirements from regulators to combat financial crimes, fintechs and digital banks have a hard time keeping everything up to date.
Unfortunately, ensuring a great experience often becomes the least of their priorities.
But according to some research, it can hurt you badly: 63% of people abandon digital financial applications, and it is estimated that a combined $6 billion is wasted yearly as a result.
A lot can be done to improve your onboarding. I previously wrote some practical tips from my experience, particularly in these sections:
➡️ Removing the Wall 🚧
➡️ Bite-Sized Signup 🚀
➡️ Time to value 🚀
Check it out here:
Government services
Furthermore, any government authentication service is a big win for obtaining passports, identity cards, visas, and more.
In the Middle East, we have:
UAEpass (UAE)
Nafath & Absher (Saudi Arabia)
PACI (Kuwait)
Identity document verification services
The last few years have seen an increase in document verification services. Certain devices and documents can even be authenticated directly through the NFC chip of your device.
Here are a few big players:
Regula - Onfido - Jumio
But even powerful tools and AI advances can be used by fraudsters to fool many of the signals captured by these services.
Shared KYCs offer some hope
The concept is not new and has been floated around for a few years. In theory, if you completed a KYC with one financial institution, it could be shared with another—for a fee.
The problem, however, is that there is little incentive for these institutions to share their hard labour. It also poses an issue of trust—a large institution might look down on smaller players. There is still no common format for certain things like addresses, employment details, contact details, family details, etc.
A lot of mapping. A lot of work.
The authentication and user experience of such a service are also key. It needs to be fast and efficient; otherwise, there’s not much value for the customer in using such a service.
Leaving banks and financial institutions to solve this themselves is probably a recipe for disaster. And that’s probably why we haven’t seen much progress in this space.
Until now…
“The internet’s fastest, highest converting onboarding experience”
The news broke this week.
Plaid, one of the largest open banking networks, announced their latest product, "Layer," promising to unlock more secure, instant onboarding experiences:
“When Plaid was founded, financial services were still designed for a world that had never envisioned the Internet.
Almost anything is possible online today—from streaming the latest blockbusters to one-click grocery delivery.
These instantaneous, simple experiences are the guiding principle behind Layer.
We built Layer to meet modern consumer expectations and bring them to financial services.
Layer reduces signup time by nearly 90%.
That’s a big promise.
According to Plaid, they already have tens of millions of people who have opted in to have their KYC saved with them.
When implemented in a fintech app, Layer will allow these users to retrieve their details by simply entering their mobile number.
📱 Mobile number check
Layer provides an API to check if the number has a linked KYC. If not, the user can continue with the regular onboarding process.
⚡️ Authentication with silent network authentication
If the number is recognised, the user can choose Layer to retrieve their details with seamless device authentication.
Silent network authentication uses an innovative way of authenticating your device without any password or one-time codes. This can be done through an integration with telecom providers and device passkeys. At the same time, Layer’s technology can detect common fraud issues such as SIM swap and offer real-time protection.
🪪 Consent to share details
Your details are ready to be shared with a single tap. Layer also offers the ability to update any remembered field and can capture additional details if required by the financial institution.
A note about Layer’s UX
I was pleasantly surprised to see that Plaid conceived Layer to be shown only when they are confident it can enhance a user’s experience. Before presenting Layer, they check: 1) if the user exists in the Plaid network and 2) if the saved information with Plaid meets the onboarding needs.
While they could still capture all the required details manually, they made the strategic decision to step aside if they cannot enhance the experience. I salute this 🫡
Layer is presented to the user only when they can guarantee a great experience. It’s a smart way to associate their product with speed and efficiency.
My take on it
Layer is everything I wished it could be.
I love the simplicity and experience of this service. Beyond the obvious value added to any fintech integrating it, I can imagine radically new experiences unlocked when combined with AI.
And it would be even better if such a service could be integrated at an OS level. Apple already saves identity documents, such as driving licences, into Apple Wallet. It wouldn’t be too hard to offer a sharing functionality to trusted services like Layer directly from the Apple Wallet.
For now, a big round of applause to the Plaid team 👏👏👏
That’s it! I hope you enjoyed this week’s edition! See you next week 👋
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About Dom Monhardt, founder of one:fs
I am a French technologist and product leader living in Dubai, with 15+ years of experience in building cutting-edge and innovative digital experiences.
I am interested in the intersection of business, design, and technology and am deeply passionate about the fintech and digital banking world.
