Bridging the Trust Gap: How Fintechs Can Compete with Banks

Trust is fundamental in financial services. Traditional banks have cultivated it over decades, leveraging established reputations and physical branches that instill a sense of security. Fintech companies, many of which are newer and operate exclusively online, face a distinct challenge. Despite offering speed, innovation, and convenience, they often struggle to inspire the same level of confidence among consumers.

According to FullCircl’s 2025 State of Identity Verification Report, a significant trust gap exists between consumers’ perceptions of banks and fintechs. The report reveals that 68% of consumers trust banks to safeguard their personal data, while only 42% extend that trust to fintechs. This disparity largely stems from the absence of a physical presence and growing

concerns over data security in digital environments. For fintechs, bridging this trust gap is not merely beneficial—it is essential for sustained growth.

One critical area where fintechs can make substantial improvements is in their identity

verification (IDV) procedures. A seamless, user-friendly IDV process not only ensures compliance but also enhances the customer experience, fostering trust from the outset. The FullCircl report highlights that 53% of customers have abandoned the sign-up process due to discomfort with the IDV process. Conversely, when users encounter secure, uncomplicated, and swift IDV procedures, completion rates increase significantly.

Moreover, the report indicates that the average onboarding time is 35 minutes—2.8 times

longer than what customers expect. This prolonged process contributes to a 38% abandonment rate during account opening, a figure much higher than businesses anticipate. In fact, 98% of businesses grossly misjudge the levels of drop-off, underestimating the impact of cumbersome onboarding processes on customer retention.

To address these challenges, fintechs must adopt intuitive and efficient IDV solutions that instill confidence from the first interaction. FullCircl’s suite of IDV tools is designed to meet this need, offering seamless verification processes that enhance user trust and satisfaction. By

implementing such technologies, fintechs can reduce friction during onboarding while maintaining robust security standards.

Additionally, the report reveals that 59% of businesses still rely on fully or mostly manual IDV processes. This reliance not only increases onboarding time and complexity but also diminishes customer satisfaction and profitability. Embracing automated IDV solutions can streamline the onboarding process, reduce operational costs, and improve overall customer experience.

It’s also worth noting that only 20% of businesses consider customer satisfaction a driver for

change in their IDV processes. This oversight suggests a missed opportunity to align compliance efforts with customer-centric strategies. By prioritizing user experience alongside regulatory requirements, fintechs can differentiate themselves in a competitive market.

In conclusion, fintechs do not need decades of history or a network of branches to compete with traditional banks. What they require is a commitment to transparency, security, and user-first design. IDV software is a powerful tool that supports all three. When implemented effectively, it can shift consumer perception and help fintechs earn a place of trust in an industry where confidence is everything.

To explore how FullCircl can assist in enhancing your IDV processes, visit our homepage. For a deeper dive into the challenges and solutions surrounding identity verification, access the full 2025 State of Identity Verification Report.