What Banks Can Learn From Challengers About Digital Onboarding

Banking onboarding in 120 clicks other reasons you are losing customers

Did you know that on average, people stay with their bank for 17 years? People are more likely to stay with their bank longer than they are to stay with their partner.

For banks, it means that winning a new client is of paramount importance since each onboarded customer is likely to become a loyal account holder for years to come.

But what happens when the banking onboarding experience is long and complicated? It is difficult to estimate how many customers are lost in the process.

A long and complicated onboarding process costs a lot in the long run.

Built for Mars founder, Peter Ramsey conducted a test where he opened 12 real bank accounts and logged everything. The results showed that traditional banks’ onboarding process is significantly longer and more complicated than the newer challenger banks.

“The challenger banks not only required the fewest clicks but needed significantly fewer than even the best scoring traditional bank. It took 5x as many clicks to open an account with First Direct than it did with Revolut.”

Number of clicks to open a banking account

Source: finanteq.com

Another astonishing statistic is how long did it actually take from onboarding to an active account. While this is anecdotal evidence that shows the experience of one single person, 36 days seems unreal for any type of account, leave alone a retail banking account.

number of days to have an active banking account

The importance of customer experience in Customer Onboarding and Origination in Banking

For customers, onboarding or new product origination is still often a challenging and time-consuming process. Friction is there from the outset, which seriously impacts on conversion rates and the cost of acquisition. Manual processes, paper-based and PDF documents, visiting bank branches, awaiting approval, and passing information through a series of systems.

Onboarding new customers is probably one of the most high-value opportunities to build a strong relationship with the customer a bank can have. Unfortunately, there is a myriad of ways in which organizations squander those precious moments.

 Instead of using the experience as an opportunity to demonstrate superior customer experience, banks often overwhelm potential customers with boatloads of clunky paperwork and lengthy wait times.

Regulation is not an excuse for bad customer experience.

Banking is a highly regulated industry, and a complex paper trail is required. Banks must put their customers through a Know Your Customer (KYC) process of having their identity verified. KYC rules are strict and often require documents to be signed in person or sent via snail mail. Each step of the process requires the customer to wait for approval before moving on to the next, creating delays and frustration.

However, eSignature adoption is skyrocketing as regulators across the world are shifting the regulatory frameworks to accommodate the new digital realities.

Paperwork cannot be avoided, but it can be rethought as an engagement opportunity.

Paperwork is a necessary part of banking onboarding and customer origination process. But manual forms cost time and causes frustration for both customers and bank employees. 

Customers must re-enter information multiple times; employees have to manually update or input the data into other systems. In the end, human resources and a new customer’s time are wasted on unnecessary data entry and tedious paper-pushing.

As a result, a lot of onboarding feels like work for the customers, rather than being made to feel welcome from the start.

Both from both customer acquisition and an operations perspective, it makes no sense – and there are huge opportunity costs. 

Five steps to frictionless onboarding in banking

1. Transform boring paperwork into opportunities for digital engagement

For years, companies have settled for making their paperwork as painless as possible. However, paperwork can be transformed into responsive digital journeys that are built to improve engagement, boost revenue growth, and delight customers in the process.

2. Embrace no-code for agile development

To ensure a user-friendly process, the process must continuously adapt to changes in customer behavior and preferences. But when it takes months to develop a single process, adapting quickly to customer behavior is impossible. The very first step to improving banking onboarding experience is to slash the time it takes to build and release a digital journey. 

Coded solutions are great for one-off projects that require a lot of customized features. However, when we are talking about customer onboarding paperwork, the no-code platform is an ideal tool to improve the experience.

3. Transform Digital Customer Experiences

It’s clear that digital is becoming a primary channel of communication with customers. To capitalize on this shift, it’s imperative that banks change the way they look at digital and prioritize customer experience over other considerations.

4. Use Data to Differentiate and Personalize Experiences

Transforming the customer experience is dependent on seamless multi-channel experiences. As far as the customer is concerned, their data freely flows between devices and processes. There is no need to ask irrelevant questions, or questions the bank already knows the answers to since they were submitted on different channels. Ensuring two-way integration between front-end experiences and backend systems can help the bank achieve a high level of personalization for the process.

5.Be Customer-Led, not Technology-Led

Your consumers don’t care about elegant technological solutions you have implemented in your back-office systems. They want a great user experience and the ability to easily and quickly apply for your banking products. Taking time to understand the customer first, and then looking for technological solutions to support great customer experience is key.

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