Open Banking
Financial Services
Open Banking
Financial Services
June 17, 2024
5 min

How Open Banking Connectivity Increases Customer Conversion

Timothy Shin

Open Banking Expert

Converting potential customers into new users can be difficult to nail effectively. On one hand, it’s important to verify and authenticate new customers to ensure regulatory compliance and mitigate risk. On the other hand, the onboarding process is notoriously tedious as there are many requirements needed to assess a customer seeking a loan or obtaining other financial services. 

Enter Open Banking APIs, which seamlessly integrate consumer bank accounts with fintech platforms to streamline the onboarding process. Eliminating friction doesn’t have to come at the expense of fraud prevention or dampening KYC and AML standards. Open Banking connectivity helps onboard customers fast and efficiently to increase conversion and get them ready to start using financial services that fintechs provide.

Onboarding Friction Reduces Conversion

You can spend a lot of time and budget to get your product or service in front of a consumer, but barriers to entry, such as an overly complicated onboarding process, can hinder their desire to continue and become active customers. In fact, 63% of customers consider onboarding a part of the buying process for a financial service or product. Thus, the best onboarding process is one that’s simple, effective, and doesn’t overcomplicate things. That’s how you can increase conversion rates and reduce potential dropoffs.

Consider the lending process. Getting approved for a mortgage can take days and require numerous documents such as bank statements and pay stubs. Instead of document submission or filling out request forms, which can lead to issues such as manual error, Open Banking can supply all the information needed to make accurate lending decisions in real-time with consumer-permissioned bank data. 

Additionally, fintechs that offer financial services like wealth management or investments can leverage Open Banking API connectivity. With a direct connection to consumer bank accounts, you can conduct accurate KYC and AML checks to ensure that consumers are in good standing and automatically provide all the information needed to examine each consumer with accurate data sourced from banks in real time. 

Open Banking Data Is Critical for Consumer Experience 

Open Banking Data improves financial services and directly benefits consumer experience. This is accomplished by directly impacting the onboarding process to remove manual input through our API connections that grab bank-grade data directly from consumer accounts and improving the speed of KYC, AML, and other regulatory requirements without sacrificing security.

Eliminating Manual Input 

Manual input refers to the upfront work consumers must do when onboarding. It can be anything ranging from printing, collecting, and scanning documents for manual review or inputting personal information and signing documents to initiate a credit check. In other words, whatever process that’s necessary but impedes the consumer from getting started and interacting with your business. 

Open Banking can eliminate all of this upfront work and automate the onboarding process by connecting consumer bank accounts directly to source the information. All that’s needed is to sign in to their online bank account and the API takes care of the rest, a far cry from having to upload and scan a bunch of documents. 

As an added bonus, customers don’t have to take the time to fill out many online forms or paperwork, reducing the chance of manual input errors. Typing or entering the wrong information can start the whole process over again and lead to churn or frustration that prevents customers from using your product or service. 

Some amount of friction is unavoidable and sometimes necessary, but in the digital age, there are better ways to deliver concrete and accurate consumer information without having to run around in circles collecting and collating it. 

Real-Time Verification

As mentioned in the last section, customers can lose interest if the onboarding process takes too long. While it’s understandable that investing or lending companies take their time to ensure regulatory compliance and deter malicious actors from their platforms, it’s also generally important for fintechs to deliver services or products in a timely manner. 

Open Banking Data can significantly shorten the time it takes to gather and verify data. In fact, Trustly’s Open Banking connections allow for real-time verification of consumers through their bank accounts. There’s no need to wait for a credit check to complete or for lengthy AML and KYC checks. 

Open Banking can do all of this in real-time without compromising on security. The reduction in time isn’t a result of taking shortcuts in the KYC or AML process; it’s all because of the efficiency of Open Banking APIs, which cut out the unnecessary steps to get customers verified and onboarded quickly.  

Don’t Overcomplicate Onboarding 

Don’t overcomplicate consumer onboarding. Now more than ever, consumers want personalized financial services and seamless experiences. Instead, you can leverage Open Banking to: 

  • Expedite customer onboarding with direct API connections to their bank accounts. 
  • Use bank-grade consumer-permissioned data to accurately assess consumer health and financial profiles. 
  • Get consumers onboarded quickly, often in real-time, by condensing onboarding processes without taking shortcuts that could lead to vulnerabilities.

Investing in simplifying onboarding can help aid in customer conversion and drive growth and revenue for financial services businesses. Don’t overlook the importance of making your onboarding process as consumer-friendly as possible, with speed, accuracy, and convenience powered by Open Banking.

Get Better Bank Data Today 

Trustly Connect and ID allow fintechs to empower the onboarding process and reduce customer dropoff. Our Open Banking API integrations are easy to deploy and allow your business to gain great insight from our data offerings. Get ahead of the curve and carve the path toward frictionless and real-time consumer onboarding today. Request a free demo to learn more. 


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