Catch drop offs before they happen. Here’s what to look out for

Chitwan Kaur   /    Content Specialist    /    2022-01-05


From a disruptive, noisy teen, the FinTech space is slowly maturing into a young adult.  

The first phase of the FinTech revolution was about building fast, breaking things and stunning legacy players into silence or worse - frenzied confusion. However, those years are past us now and it’s a time when FinTech companies across the world are making key decisions about their future and having tough conversations about living and livelihood. Just like any freshly minted graduate would. 

In India, the situation is no different. FinTech has made a lot of gains in a country whose FinTech adoption rate is a whopping 87% according to some estimates. The number of digital lending apps downloaded in India more than doubled, year-on-year.

Clearly, any advantage derived from being first-to-market or early growth hacks is diminishing. The playing field has been leveled.

Industry-wide consensus is that the financial technology revolution has already completed one lifecycle. It was a good run - companies addressed specific customer pain points, focusing on key areas like investments, payments or lending.

Now, we’re well into the Fintech 2.0 landscape. And this time, it’s all about enhancing the user experience in order to realize gains that were made in the first wave. Second-generation FinTech players are looking to set themselves apart with a focus on customer centricity and experience design, while continuing to build and use emerging technology and expanding to new markets.

There’s evidence to suggest that 1 in every 3 customers walks away after just one bad experience. So, for digital lenders, ensuring that customers pull through the onboarding process - their first taste of the product - becomes crucial. 

Platforms that struggle with chronically losing customers should consider reexamining the customer experience at various onboarding stages. Here are the usual suspects behind high drop off rates –

Lengthy application process

Customers are spoilt for choice in today’s competitive markets. Capturing their attention and patience has become critical. Lending platforms with longer than necessary application processes often lose out to counterparts offering the same product. 

In 2020, a whopping 63% of customers abandoned their digital bank applications citing complicated journeys and lengthy application processes. 

  • Digital lenders without a prequalification engine find that borrowers with higher credit scores are likely to drop off when they are put through standard onboarding journeys. Adaptive onboarding customizes the journey on a case-by-case basis, reducing the number of steps for premium customers.

  • For all its innovation, digital onboarding can still take up to 120 clicks and 45 minutes. But, some digital loan providers are ahead of the game, promising as few as 2 minutes and 24 clicks for availing a loan. 

  • Often customers may not complete the onboarding process in one go. Restarting the application makes for poor user experience. Digital lenders often lose customers to competing platforms that allow users to save their application and resume it later at their own convenience.

Misguided ID verification

The rise of digital identity and verification opened up a $1.6 trillion opportunity for businesses globally. It promised to reduce the cost of onboarding by as much as 90%. In India, KYC through Aadhaar alone brought down per customer onboarding costs from $5 to $0.70. 

Verification, however, remains challenging. Digital lending apps often compromise on customer experience to secure themselves from fraud, and to adhere to regulatory necessities. Other than being an added step in the digital onboarding process, verification also lends itself to friction.

The process can prompt drop offs when – 

  • Customers get impatient waiting idly to be verified.

  • KYC verification is incorporated at the wrong time during the onboarding journey. Depending on the purpose, digital lending apps can often plug ID verification at sign-up or just for high-risk transactions (doing the necessary ID verifications for premium users at a later stage).

  • Customers may lose patience when they are asked to fill out information already mentioned in their IDs. Clever digital journeys often use automated reading systems to cull out information from identification documents to enable an easier experience for the borrower. 

Validating IDs, especially when done remotely, is a delicate balance between rigid compliance and offering the best customer experience. Too many disruptions in the onboarding journey could frustrate a customer, but an entirely frictionless process is not ideal either.

In 2016, Wells Fargo added a lightning-fast eye scanning feature on its app to replace passwords. However, the sheer speed at which the feature worked led customers to believe that anyone could access the app on their phones. The bank added an artificial waiting time to reassure customers of verification.

Evidently, when it comes to security, borrowers expect some positive friction. It lends credibility to the app and enhances the overall experience.

Suboptimal document review

Gathering documents can be the most expensive step in the onboarding process, costing lenders between $400 and $2,800 per customer. Collecting and verifying documents required for underwriting - such as bank statements - can be tricky with digital lending journeys. 

Drop offs happen when –

  • The platform forces the customer to break the in-app journey to upload documents. Options to upload the bank statement in-app, or provide net banking details ensure that the customer doesn’t stray from the onboarding journey.

  • Document verification is carried out using time-consuming methods. Lending platforms with optical character recognition (OCR) and ML-based image forensics for cross-verification have the upper hand when it comes to speed. 

Poor customer support

Digital onboarding journeys should ideally be designed to allow intuitive navigation for the customer. But in case of new-to-credit users or customers with lower digital dexterity levels, customer support becomes necessary. 

When customers reach out for support through phone calls, it often breaks their onboarding journeys. Laggards who have not adopted AI-enabled chatbots inadvertently push customers away. Intelligent chatbots can offer tailored customer experience, quickly resolve queries, and are available round the clock.


A problem well stated - and acknowledged - is half solved. Drop-offs are the ghosts in the machine of digital lending and they are better resolved sooner than later. While it might seem expensive or resource intensive as an exercise, solving for drop-offs can make the digital lending business more viable and sustainable. It also makes customers indulge in positive word-of-mouth - something as rare as a unicorn in the financial services world.  

When it comes to correcting drop off rates, FinBox has done its bit to do the intensive research, data analytics and underwriting that we place a lot of faith in our funnel’s retention metrics. Our digital credit infrastructure offers onboarding journeys that keep customers engaged throughout by plugging leaks in each step. 

As a result, FinBox journeys and products built on top of it experience lower drop off rates by up to 60% through –

  • Adaptive onboarding: Credit in just two clicks for premium customers

  • Start-where-you-left off: Save-and-resume loan applications

  • Fast and frictionless KYC: Efficient verification through in-app modules 

  • Account Aggregator: Deep and instant bank statement analysis through Account Aggregator and FinBox BankConnect.