Before the pandemic, it felt like half of the country was getting sick of walking into a branch or ringing up to sign up for a new account, and the other half were complaining about branches closing down and how on earth they were going to change providers or join a new bank without their local branches. Enter the Coronavirus! Now no one has a choice.
Banks have had to adapt to digital onboarding, and so have their users. Both mobile and online web channels are leveraged to onboard in the new world. However, there have been some obstacles to effective onboarding, including managing signatures digitally and ensuring a speedy onboarding experience. One report highlighted that 40% of millennials “abandoned the onboarding process when they had applied for a bank account. They cited too lengthy a process, time-consuming authentication, and difficulty in filling out forms, among the top four reasons.” Similarly, one report by Forrester pointed out that “over 64% percent of banks report lost deals and revenue due to problems in the current onboarding process”.
The onboarding process is pivotal, how you interact with and onboard a client, how you digitally validate the client’s identity and how you make the process seamless and flexible are all important components to navigating the digital onboarding world.
Many factors in recent times have led to banks facing the pertinent necessity of providing digital onboarding processes to new customers and clients. This has led to banks needing to develop software and solutions that can efficiently gather data and meet required protocols.
Digital onboarding for banks is becoming an expectation of new customers, as it can greatly reduce the amount of time onboarding processes take. As such, embracing platforms and digital transformation services that enable digital onboarding has become essential for financial institutions.
In this article, we will discuss the technicalities and challenges involved in digital onboarding for banks, as well as covering how the process can benefit banks in the long-run.
Improve Customer Experience
Building loyalty is no longer a question of customer service, it’s about customer experience. The customer onboarding process impacts customer lifetime value. When signing up for new services is an enjoyable and easy experience, customers are happy to and interested in signing up for further services in the future. The cost of marketing to a new person outweighs the cost of retaining or upselling current customers and onboarding easily is one of the ways to build enhanced lifetime value.
Digitally Validating Identity (KYC/AML)
Whether you onboard in person or digitally, the need to comply with KYC regulations is an essential component to designing the onboarding journey. Data should be easily accessible to appropriate access levels across your brand, when data is kept in silos, users may have to re-enter or resubmit documentation, causing a barrier to entry.
The Importance of Intuitive Interfaces
When it comes to digital onboarding of new customers, one of the biggest barriers to entry can be the interfaces that customers need to interact with in order to view information and complete financial tasks.
User experience applications need to be designed so as to make the front-end interfaces that customers come into contact with as intuitive to use as possible. An intuitive interface will feature components of design elements and text that allow for users to instinctually navigate the application or platform with ease.
Digital onboarding can lack the in-person connection that can help many consumers to feel more at ease when joining a banking institution. As a result, the interface that a customer uses must feel as natural as speaking one on one with a financial professional.
Automating Back-End Processes to Optimize Onboarding Time
A major advantage that should not be overlooked is that digital onboarding provides the opportunity to drastically reduce the amount of time it takes to process and complete crucial onboarding actions.
Long onboarding periods can ultimately scare customers away in favor of competitors who boast quicker onboarding speeds. However, digital onboarding allows financial teams to delegate many of the essential tasks to be automated by a virtual system. As a result, most of the necessary paperwork and approvals can be received and validated in a fraction of the time.
Providing Straight-Forward Education and Engagement
Digital onboarding will require members of a financial team and customers to work with technology in order to achieve a shared goal. While technological advancements have become the new standard for many customers, it is still crucial for resources and support to be widely available to customers as they navigate through the platform or application during the onboarding process.
Providing these resources and support through educational elements, such as pop-up messages or guided demonstrations, can greatly improve your customer’s experience with the digital onboarding process.
The Challenge of Security and ID Verification
It’s no question that in-person identity verification can be significantly easier than virtual ID verification. This makes meeting security protocols one of the biggest challenges of creating an effective digital onboarding system.
Here is a quick breakdown of some of the most useful and recommended forms of ID verification to be used throughout the onboarding process:
- Biometric Verification: Verifies identity through scanning of fingerprints or facial elements that have been previously recorded and filed under a specific individual’s biometric record
- Multi-Factor Authentication: A method that requires users to provide two or more documents, identification cards, or other forms of proof of identity
- Security Checks: Security questions and other security checks can be established to provide checkpoints throughout the process
- Additional Verification: Requiring additional verification for scoring, reputation, and fraud prevention activities
- Digital Signatures: A digital signature that is accompanied by a digital certificate that verifies that identity of the signee – highly useful for signing agreements and other onboarding documents
Creating a Digital Repository
Gone are the days of stacks on stacks of filing cabinets to store all legal and official onboarding documents. By embracing digital onboarding, banks can create digital repositories of crucial onboarding data and information.
Digital repositories are like libraries of information, except they are stored entirely virtually. This kind of digital storage method allows for the information to be easily accessed by authorized personnel anywhere at any time.
Long-Term Benefits of Digital Onboarding
There are many advantages and long-term benefits that come with adopting a digital onboarding process. Understanding the potential opportunities for growth and improvement that digital onboarding can provide is essential for financial institutions looking to make the leap into providing a fully digital service.
Here are four key benefits that can result from digital onboarding:
- Improved Customer Satisfaction: A well-designed and intuitive system can provide a significant boost to customer approval and satisfaction.
- Greater Organizational Efficiency: Automated processes and digital databases allow for a major increase in overall efficiency of processes within a bank.
- Strengthened Customer Relationships: Digital onboarding can help to strengthen existing customer relationships by providing elements or features that benefit not only new customers, but loyal existing customers as well.
- Lower Operational Costs: On-site document management and paperwork filing can be costly, but with digital onboarding, many of those operational costs can be eliminated.
Anything less than perfect is no longer acceptable when onboarding clients digitally. Users are used to seamless experiences with flawless journeys, and to thrive in a world of digital natives, your brand needs to enable users to sign up for the services they want easily. CPQi are experts at implementing digital transformation initiatives, including digital onboarding. Get in touch with us for a free digital onboarding consultation to hear how we can help you onboard clients seamlessly.
By Paul Morris, Executive Sales Manager at CPQi