Hello everyone,
Welcome to the second edition of Common Thread.
Last month I traced how technology spent three decades solving the lenders’ problems — how to account, how to process, how to unify — before hitting the first one it can't solve from the inside: what the customer expects. A few of you wrote back with a fair challenge. If that's the era that we're in, why does so little of it feel like it's arrived?
Great question. So, let's start with someone trying to open an account.
Peeling the digital onion
Ask any banker about their digital channels, and you'll get the list without a pause. Internet banking. Mobile banking. Online account opening. Chatbots. WhatsApp banking. Digital loan origination.
But — and this one deserves a capital B — how digital are these digital experiences, really?
Take a large bank in the Philippines. It offers ‘online account opening.’ Except you download the app, register, work through the journey, and arrive at: Congratulations, your account has been opened. It will be activated post verification.
Why have a separate verification step at all? Why not e-KYC and video KYC done then and there, while I'm still in the flow and still interested?
Want to open the account from the web instead? That's a different journey altogether, apparently. Stuck somewhere and need help? Well, we could integrate a chatbot for that. We haven't yet. But we could.
From Asia, over to Africa. A large bank in Nigeria has offered online account opening for years now. Nice landing page. It asks for your BVN, and if you don't have one, you're re-directed to the NIBSS website to go and get it. Off you go.
Come back when you're done, if you feel like it.
Why can't my BVN questions be answered on the page I'm already on?
Why can't my account opening simply proceed, pending BVN fulfilment, instead of stalling entirely on a field I can't fill?
Peel back the digital onion, and the layers underneath will make your eyes water.
Here's the puzzling part
Banks are not underspending. Digital spend is still climbing — nearly $590,000 per $1 billion in assets last year, up from $551,000. The technology is arriving too: AI use in KYC and AML went from 42% to 82% in a single year. CIOs, CTOs, Chief Strategy Officers, Heads of Customer Experience, Chief Digital Officers — an entire roster of senior people working to deliver a genuinely ‘wow’ experience.
This clearly isn't a question of intent. Or budget. And yet something as basic as account opening remains riddled with friction.
So I assumed my run-ins in Manila and Lagos were outliers. Turns out, not quite. Last year, across 89 banks and credit unions, 3.36 digital account applications were abandoned for every account opened. This is US data, by the way. Where the technology stack is meant to be furthest along.
Three and a half applications binned for every one that lands. I've never had to explain a funnel like that to a board, and I wouldn't want to.
Ask consumers and you get the same story from the other end — 68% have abandoned a financial application, up from 63% in 2020. Ask institutions: 70% lost clients to slow onboarding last year, the highest on record, against 48% in 2023.
One caveat, since I'd want one: almost everyone publishing numbers here sells onboarding software, and I'm in the same business. What persuades me is that rivals surveying different continents keep landing in the same place — and it matches what I hear on calls.
So, it is established. The gap between the promise of digital and the delivery of digital is real, and it is wide.
What explains a gap this wide?
Part of it I covered last month: the sheer pace at which the world has changed. 5G, smartphones, Gen Z — a perfect storm, with AI as the accelerant. What counted as a solid digital experience five years ago is a laggard today. The bar keeps moving, and most onboarding stacks were built for where the bar used to be.
But here's the finding that reframed it for me.
You'd expect the markets with the most mature digital identity to have the happiest customers. The opposite is true. Abandonment is highest in the Nordics, despite widespread eID — consumers there turned out to be more demanding, less tolerant of a bad experience, more likely to walk. The researchers call it the expectation paradox.
Now look at Asia. Singapore is a global leader in AI-driven compliance. About 92 percent of its financial institutions use AI-driven tools for KYC and anti-money laundering processes. Yet, more Singaporean FIs lost clients due to inefficient onboarding (76%) compared to the US or UK. An improvement from 2024, but still a significant number.
Different researchers, different continents, same shape. Every improvement you ship raises the bar you're then measured against. Your customer isn't grading you against the bank down the road — they arrive at your journey straight from an app that read their document in three seconds, and they grade you against that.
Which is the whole point of the era I described last month. The first three problems lending solved were internal, and internal problems stay solved. This one doesn't. It's a moving target, and every business your customer touched this week moves it for you.
So what's the fix?
Banks need to keep doing what they've always done — just a lot faster. They've historically been early adopters of technology: ATMs, core banking, online banking, mobile banking, digital payments. That instinct is intact. What's changed is that AI is democratising technology, and capital is now accessible to industries far outside banking. So the competition isn't the bank down the road. It's every customer-facing business out there, resetting what your customer expects from you.
Which means the fix isn't another microsite or another ‘coming soon’ chatbot.
It's collapsing the app journey, the web journey and the branch-assisted journey into one experience, so a customer doesn't have to relearn onboarding depending on which door they walked through.
It's treating verification as something to be resolved inside the flow, not outside it. A document that gets read, checked and accepted in seconds rather than parked in a manual review queue. A BVN gap sorted with a question and an answer, not a redirect and a prayer that the customer comes back. 38% of people walk because they don't have the right credential to hand — that isn't a compliance outcome. It's a design choice.
And while we're on documents: asking for one costs you 29% of your conversion and buys you 1.5% less fraud. I have never seen that trade written down as a business case. I suspect writing it down would end it.
It's replacing static forms with something closer to a conversation — one that can explain, at the exact moment a customer is stuck, why they're stuck and what happens next.
And it's making all of this sit on top of the core systems banks already have, so that ‘modernising onboarding’ doesn't become a three-year infrastructure project before a single customer benefits.
None of this is exotic. It's the same instinct that gave us instant document reads, real-time decisioning, and journeys that adapt to the customer instead of the other way round — just finally pointed at the part of banking that's stayed stubbornly manual the longest: getting a customer in the door.
At FinBox, we're trying to solve exactly this through Atlas — a layer that sits on top of your existing infrastructure and helps you finally deliver on the digital promise you've been selling.
More threads to pull next month.
Cheers
Bindesh
All opinions expressed are my own and do not necessarily reflect the views of FinBox or its promoters.
