- New research examining 108 Australian financial institutions reveals a critical strategic gap in digital customer acquisition, with many customers abandoning processes early
- Financial institutions often require channel switching (printing, scanning, phoning) during digital processes, causing significant customer friction
- Three main challenges identified: inflexible legacy systems, financial constraints, and regulatory burden
New market research from Sandstone Technology, based on a market scan of 108 Australian financial institutions (FIs), reveals that many financial institutions are suffering from a "critical strategic gap" where digital efforts are failing to prevent customer abandonment during the crucial early stages of acquisition.
The research finds that while FIs have adopted digital tools, their solutions are often basic, impersonal, and disconnected, creating unnecessary friction that drives prospective customers away. The problem is no longer adoption— it's effectiveness.
The Sandstone Technology whitepaper, How to Stop Customer Abandonment: Leveraging Smart Digitisation to Acquire Customers Faster, highlights that many FIs still require prospective customers to switch channels asking them to print, scan, or phone in at the first sign of complexity. This friction dramatically increases the risk of applicants abandoning the process.
This persistent issue is exacerbated by three core challenges: the inflexibility of legacy core systems, financial constraints limiting large-scale transformation projects, and the added complexity of the regulatory burden (such as APRA's CPS 230). The result: potential revenue is stranded in clunky, half-digital processes.
The market evidence points to several small, yet critical, digital gaps, particularly in lending and deposit acquisition:
-
Foundation Gap: 29% of institutions offer either no digital experience, or generic, highly manual experiences within retail banking.
-
Friction Trap: With retail lending a critical lever within business growth, across unsecured and secured lending less than 30% offered customers a fully-automated digital experience.
Sandstone Technology advocates for a practical, cost-effective roadmap that avoids the risk and expense of a full core system overhaul. Instead, FIs can implement semi-automated SaaS modules as digital enquiry and application layers on top of existing infrastructure.
This modular approach allows institutions to make meaningful progress by targeting specific customer journey gaps like using tools for configurable online lead forms and lightweight digital application module to achieve high-conversion, low-friction wins immediately.
Jen Harris, Sandstone’s Chief Customer Officer, states, "Many institutions are over-engineering their long-term vision and overlooking simple, high-impact fixes. Our research demonstrates that targeted, early-stage digitisation is the key to closing the strategic gap and achieving significant acquisition growth right now."
For the full data, download the whitepaper: https://www.sandstonetechnology.com/stop-customer-abandonment-financial-institutions
About us:
For more information about Sandstone Technology, visit www.sandstonetechnology.com
Contact details: