In this challenging economic scenario, banks must create a differentiating strategy that can help them stand out from the crowd. Focusing on offering a superior customer experience is clearly a winning strategy especially as 38% of customers, according to research by Deloitte, consider user experience (UX) the most important criterion when choosing a digital bank. Digitization of the customer experience journey has to start with onboarding—one of the first interactions the customer has with a bank or financial institution. With social distancing being the new norm, bringing customers on board through digital processes has become more important than ever. Personalization, omnichannel approach, and a frictionless communication process—these are the three key points of refined customer experience, all of which can start at the digital onboarding stage.
Onboarding is a journey, not a transaction
A popular belief is that onboarding begins at the time of ‘form-filling’. However, onboarding a customer begins way before forms filling starts. It is a journey and it is vital that superior customer experience must be built into every stage. Being the first interaction that a customer has with a bank, customer onboarding is very crucial as customers can be won or lost during this interaction. The digital onboarding journey starts from enabling customers to explore all the products offered by the bank or financial institution. The next step in onboarding is collecting all relevant information about the customer, validating these details and setting up of eKYC. Once these processes are complete, the next step is to check the check credit score of the customer as part of the due diligence processes. Once all of the above processes are complete, an account is opened with the bank and the funding of this account takes place.
Onboarding a customer sets the tone for the ongoing relationship with the customer. Getting this right, increases a bank’s chance of increasing the customer lifetime value (LTV).
Current onboarding landscape
While banks understand the challenges of attracting new customers, they have also understood the importance of a smooth onboarding process. In many banks across the globe, the onboarding process is still disjointed and inconvenient for customers.
With the tremendous growth in terms of connectivity, customers do not want to be limited by a handful of channels, and are looking for an instant digitized experience when applying for a product or service. The traditional way of filling numerous and lengthy physical forms are a deterrent in this era of instant gratification. This notion of instant gratification is furthered by fintechs, who currently offer customers a seamless onboarding experience. Customers of banks and financial service providers therefore have expectations for a similar or superior experience.
Digitally savvy customers are unwilling to spend a lot of time and effort in selecting a product and then filling out a number of forms to get access to these products. More often than not, this contributes to the abandonment rate.
In a traditional onboarding set-up, there are multiple touchpoints in the bank and within each department that are required to finish the entire process. At best, each application has to go through a minimum of three departments—legal, credit and operations to be completely onboarded. This can result in customers having to submit copies of their forms and information multiple times.
While smaller banks can offer a quick onboarding process for customers than their traditional larger peers, the pressure to get the onboarding process right is multiplied by the fact that they cannot afford fines if not compliant with regulations. In the case of larger banks, siloed operations and the departmental nature hamper the onboarding process.
The challenges that financial institutions grapple with, related to onboarding include
- Customers wanting information at the click of a button, instead of multiple interactions with banking personnel, which often results in fatigue and abandonment
- Lack of coordination within the various departments of a financial institution, with varying objectives makes it difficult for a coordinated, customer-centric onboarding process
- Underinvestment in onboarding technology and reliance on legacy technology that cannot match or support the speed of today’s market requirement
- Unavailability of analysis to glean insights about their customers and their preferences
- Current social distancing norms make it difficult for customers to visit a branch and get information on the products
- Inefficient and paper-driven processes which are not just a breeding ground for errors but may also result in duplication
A seamless digital onboarding process is the obvious answer
The key to a seamless digital onboarding process is to put the customer at the forefront of its development and to use the right technologies to support it. Banks that do this will reap rewards in terms of brand perception and customer acquisition. A smart onboarding process not only ensures the probability of a potential customer to be more likely to sign up but it more importantly reinforces their confidence in the brand from the outset. Apart from improving customer acquisition and retention, banks that get smart about onboarding can also reduce costs.
In addition to removing the compromises that the customer must make, a well-designed onboarding process brings a host of benefits. Brand perception being solid from the outset, helps introduce new products, making it easier to upsell or cross-sell. Due diligence, eKYC and compliance are effectively managed, and banks create an experience that delights customers which will add more value than just time and cost savings.
Digital onboarding—an opportunity for future success
Banks need to get as far down the road as possible with planning for digital onboarding. The answer lies in engaging with the technologies of the future that bring automation and seamlessness at every step of the onboarding process. With remote and real-time transactions being the order of the day, banks wishing to compete will have to accept and embrace big data, digital identities, biometrics, and the power of the smartphone.
Clayfin’s Digital Onboarding enables banks and financial institutions to accelerate the customer onboarding journey by automating the end-to-end process in a simplified and streamlined manner —through the capturing of accurate information, using the most current biometrics capabilities, adhering to regulatory standards and optimizing operational efficiency. Our solution can provide banks and financial institutions with a seamless end-to-end onboarding experience, without any human intervention, with the option of human intervention when and where required. Most important of all, our solution is customized completely—to your bank and geographic-specific needs.
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