Digital Onboarding in Banking: There’s No Second Chance to Make a First Impression
Users expect that opening a new bank account will be as easy as hailing an Uber or subscribing to Netflix. However, KYC (Know Your Customer) requirements and the complex nature of financial offerings make designing a client-friendly registration and onboarding process a real challenge.
Complicated identity verification mechanisms, the amount of required information, and re-answering the same questions over and over again frustrate many users. As a result, they may quit the process and choose a competitor’s offering instead. Consequently, it is at the onboarding stage that many clients finally make up their minds about whether to stay with a bank or not.
Designing Digital Onboarding that Responds to Clients’ Needs
Digital onboarding is an automated process that helps users register a new account and understand its options. It is a key part of customer relationships; the experience customers have at this point affects their future opinion of the company and its products.
Providing solutions that support customers at later stages in their journey as well as facilitate the onboarding process offers many benefits to both parties.
Customer Benefits:
- 24/7 onboarding.
- Easier access to bank services and products.
- Complete self-service and less frequent use of the customer service center.
- Shorter wait times.
- Less need to visit bank branches.
- Faster KYC clearance.
Bank Benefits:
- Provide onboarding outside of regular hours.
- Better service accessibility and reach.
- Fewer customer service cases.
- Lower onboarding costs.
- Greater customer satisfaction as a result of an easier and shorter onboarding process.
- Fewer clients visiting bank branches.
- Optimized employee workloads (via task automation).
- Faster KYC procedures.
- More efficient data circulation inside the organization.
Digital Onboarding Shapes Future Customer Relationships
Users starting the onboarding process expect it to go easily and swiftly. Any inconvenience at the beginning stage may make them drop the process; thus, the procedure becomes critical to an organization's ability to win new clients.
Early customer interactions will shape the way clients perceive your organization in the future. Plus, at the onboarding stage, a bank may persuade customers to take specific actions.
The following are key features of a good digital onboarding process:
Client Activation
Onboarding provides a natural opportunity to further activate clients. Customers' attention is focused on the banking products offered, so it’s an ideal moment for the client to get to know additional banking products and services. Making a good impression at the start of the relationship will significantly increase customers' propensity to test other solutions offered by the bank.
Onboarding – which, for many customers, is their first interaction with the bank – can help banks build a reputation of reliability. This, in turn, encourages customer loyalty and increases the chances of clients personally recommending the bank to others.
Offer Personalization
Onboarding also is the first opportunity for the bank to collect new user data. When customers register, the organization can start acquiring additional customer data from external sources such as a credit information bureau.
The data will allow the bank to create a more detailed customer profile, which can be used to precisely address clients’ future needs. It also allows the bank to better customize the presented offer; which enhances sales effectiveness and helps build a better customer experience.
Anytime Access
Today's customers often prefer to access banking services via their smartphones, with no need to visit a brick-and-mortar bank branch. These users expect to be able to open a new bank account by themselves at the place and time of their choosing.
For this reason, onboarding should place strong emphasis on:
- An intuitive, mobile-friendly interface.
- Enabling the customer to conduct the entire process independently, without visiting a branch.
- Automated help options (including interactive guidelines and chatbots) that allow the customer to complete the process without help from a bank employee.
On the other hand, some people prefer to have an employee help them navigate this process. Thus, onboarding should also offer personal interactions (i.e. via phone call or online chat) for users who prefer them.
What Does a Good Digital Onboarding Solution Include?
There are many factors that contribute to successful onboarding. One on hand, the implemented system must support actions based on predetermined rules and regulations; on the other hand, it must be flexible enough to ensure the best customer experience.
Complies with Banking Regulations
Banks’ top priority is to comply with the applicable banking regulations. Thus, the implemented system should facilitate the KYC procedure and use automatic identity verification solutions.
There are four leading methods for user identity verification:
- Video verification, during which a professionally-trained bank employee contacts the user. The disadvantages of this solution are high maintenance costs, its intrusiveness to the client, and difficulty ensuring 24/7 operation.
- Automatic verification via Artificial Intelligence (AI), Optical Character Recognition (OCR), and the analysis of specific elements (e.g. watermarks). If a verification is positive, the user's ID photo is compared against a selfie they provide. Unlike classic video verification, this method is much less costly and is available 24/7 Also, this method is preferred by many users because it is self-service.
- NFC technology allows the system to read ID or another identity document chip information. Apart from personal data, these chips also encode biometric data, which protects the solution from identity theft. A key disadvantage of this method is its relatively low level of adoption.
- eIDs, or virtual versions of an identity document, e.g. an ID in the form of a mobile application.
The selected verification method must also ensure the easy updating of business rules, form boxes, and document requirements that result from legal and/or regulatory changes.
Meets High Security Standards
The provision of banking services requires the collection, processing, and storage of information from many sources. Therefore, the onboarding process must ensure that the documents and forms collected come from a safe environment – i.e. one that uses technologies like single-use passwords, audit paths, and HTTPS encryption.
Delivers a Great Customer Experience
In onboarding – as with many other solutions targeted at end users – an appealing and intuitive user interface is vital. Ensuring a good user experience increases the chances that users will complete the process and try other banking products and services in the future.
Integrates with Other Bank Systems
Your onboarding implementation must provide for full integration with your existing bank systems, including CRM and AML solutions. Moreover, an organization should have at least one data repository for client interactions to automatically transfer client data to all banking services.
An automated process helps reduce data duplication, ensuring data integrity and consistency. Also, adequate data management facilitates its re-use, meaning customers do not need to submit the same sets of documents while using other banking products.
Streamlines Employees’ Work
A well-designed and automated onboarding process helps optimize bank employees’ work; they no longer need to perform time-consuming and repetitive tasks and can focus on their core duties.
Yet, even though the entire process is very much self-service, the onboarding system should offer a way to contact an employee whenever the need arises. For this reason, the system should allow bank employees to:
- Browse data entered by the client in real time.
- Quickly check which documents and forms are required for a given client based on their category (e.g. business clients, high-risk clients, etc.). The automation of business processes can make requirements quite clear.
- Verify the client’s identity.
Utilizes and Supports Advanced Analytics
Onboarding is frequently the first opportunity to apply analytical or machine learning tools. The process may initiate acquiring user information from external sources (e.g. BIK) or be used interpret customer behavior patterns and preferences. This information will shape future offerings targeted at particular users.
Can Banks Meet Clients’ Digital Expectations?
A user’s first interaction plays a key role in building a long-term relationship. Banks that provide a good user experience to their prospective customers stand a much higher chance of attracting and winning clients. Simultaneously, the impression that an organization gives to the client at this early stage affects their future profitability.