“Patience is a virtue” might be a sound philosophy to impart to your children, but it’s probably not what you want springing to your customers’ minds when they open a new account or apply for a loan with your bank. Rather, you want customers to think your onboarding process is fast and that it’s easy to do business with you—versus frustrating and they’re ready to bolt from a time-consuming, off-putting experience.
But many financial institutions report they still have a long way to go to meeting the expectations of today’s digitally savvy consumers who demand speedy, seamless service. Consider that 64 percent of banks have reported lost deals and revenue due to problems with their onboarding.1 And 90 percent of new banking customers abandon their account applications before they are completed,2 with most banks seeing a completion rate of just 30 percent for new accounts and 10 percent for loan applicants.
Fortunately, there is good news. Not only are there steps you can take to enhance your onboarding processes and better engage customers, but according to Javelin Strategy & Research, effective onboarding can boost your profitability by $212 per customer.3
So, what is “effective onboarding,” and how can you ensure your processes are optimized to avoid losing customers and capitalize on this potential revenue? Let’s take a look at the top 5 must-haves for your onboarding process:
First, it’s not about you.
It’s about your customers, and their needs should be driving your business processes. In the Age of the Customer, consumers no longer just compare you with your direct competitors. They also contrast your onboarding and user experience with technology giants, such as Amazon and Uber.
If you don’t make it easy for customers to interact with you─across any channel and at any time─they likely will bank elsewhere. You can win them over and take the first step toward building a long-term relationship by meeting your customers where they are—making the onboarding process as convenient as possible.
Your customers shouldn’t need to meet with your rep in a branch to open an account or apply for a home loan. Allow them to start an application on their PC and finish it on their mobile device if desired—and without making them re-enter information. Let them pick up where they left off and receive prompts for any remaining requirements.
Consumers also increasingly rely on their mobile device or smartphones to initiate and complete the entire onboarding process. Meet your customers on their terms, such as by enabling them to conveniently snap a photo of their ID with their smartphone to open an account. By doing so, you’re more likely to reap the benefits of repeat business.
Stop drowning in paper.
If you are like many financial institutions, you still rely on time- and paper-intensive methods for onboarding new customers. In addition to being slow and error-prone, paper-based processes cost up to 20 times more than electronic document processing.4
Think about those onboarding steps that still require your customers to deliver, fax or mail hard copy forms. Eliminating paper can go a long way to maximizing your efficiencies and avoiding customer frustrations.onboarding steps that still require your customers to deliver, fax or mail hard copy forms. Eliminating paper can go a long way to maximizing your efficiencies and avoiding customer frustrations.
Introduce a solution that electronically captures documents and identity information to speed onboarding. A smart capture platform enables key data to be automatically extracted from applications, validated and entered into a case management workflow, where you can further perform fraud and credit analysis checks.
Allow your customers to electronically provide missing documentation via the channel of their choice so they can avoid a trip to one of your branch locations or the post office just to submit a piece of paper. Electronic signatures are also a critical tool to further decrease your paper usage, delivering added convenience to your customers while reducing costs and mitigating fraud risk.
Automate to accelerate.
Reduce the time it takes to onboard your new customers and avoid trying their patience by automating your processes. Banks that have automated their manual processes have achieved a 32 percent reduction in misplaced documents. They have also reduced their end-to-end processing times by 57 percent while cutting their storage, transportation and handling costs by 38 percent.5
Consider robotic process automation (RPA), an emerging and cost-effective technology that you can deploy quickly and easily to eliminate manual tasks for onboarding and Customer Due Diligence (CDD) compliance. RPA uses software robots and intelligent business rules to mimic the actions your employees take while performing routine tasks in various applications.
RPA can automatically check an individual’s background for you against thousands of sites—such as the U.S. Treasury and Immigration and Customs Enforcement—to streamline and expedite required compliance checks for new accounts and loans. RPA decreases processing times between 30 to 50 percent while reducing costs by up to 50 percent.
Your automated processes should also leverage an integrated platform, instead of separate apps. On average, banks contact customers four times during the onboarding process.6 This is often because your internal teams need to collect or locate customer data from disparate systems and databases.
But consumers dislike needing to provide the same information over and over to you when internal personnel can’t find it. Create a centralized and easily accessible online repository for customer data so your internal teams can rely on a single source for accurate information. This makes it easier for you to quickly onboard new applicants in a “one and done” manner.
Go digital from end-to-end.
While you may be tempted to primarily focus on improving your front-end customer service with mobile and online capabilities, back-office bottlenecks are often the culprit for onboarding delays and customer frustration. This may be due to the fact that only 14.8 percent of bank executives call their back-office, digital capabilities “advanced.”may be tempted to primarily focus on improving your front-end customer service with mobile and online capabilities, back-office bottlenecks are often the culprit for onboarding delays and customer frustration. This may be due to the fact that only 14.8 percent of bank executives call their back-office, digital capabilities “advanced.”7
So, when you digitize your onboarding process, don’t neglect your back-office functions such as loan approval, underwriting and closing. According to McKinsey, by taking advantage of an approach that includes the back-end, your bank may be able to generate an improvement of more than 50 percent in productivity and customer service.onboarding process, don’t neglect your back-office functions such as loan approval, underwriting and closing. According to McKinsey, by taking advantage of an approach that includes the back-end, your bank may be able to generate an improvement of more than 50 percent in productivity and customer service.8
Many financial institutions also lack visibility into their systems and workflows, and can’t see where or how their onboarding processes are underperforming. Going digital end-to-end can help you identify and eliminate these bottlenecks.
Leading onboarding platforms provide near real-time business intelligence and analytics that can help you p.inpoint opportunities to improve processes for better, faster customer service. A flexible, scalable IT platform that supports more than just onboarding is also your ideal strategy; you want your systems to stay in sync across the customer lifecycle so you can continually enhance the experience and keep up with changing expectations.
Don’t keep your customers in the dark.
After your customer applies for a new account or loan, it’s important to keep them informed about the status of. their application and any additional information or documents you need from them. Something as simple as sending your customers a welcome message via email or SMS doubles the rate of satisfaction with your account-opening process.
Customers also expect that you communicate with them on their terms. Send timely, relevant and personal messages through a customer communications management [CCM} solution that allows you to reach customers where they are, in the manner in which they prefer. You can also make it easy for them to get answers to their questions via real-time chat, instructional videos, mobile FAQs, phone support, and in-person support.
According to American Express, customers are willing to spend 13 percent more with a company that provides excellent customer service.8 And those first information-intensive interactions during the onboarding process will likely determine if your bank gets to reap this potential benefit.
Learn more on how to make onboarding less off-putting for your customers. See the infographic: Is it easy to be your customer? The Customer Onboarding Experience in Financial Services
Find out if your onboarding experience makes the grade. Take the interactive onboarding quiz now.
1 Forrester Consulting, Client-Centric Onboarding – Hopes and Realities for Global Banks,” May, 2014
2 Javelin Strategy & Research, 2011 Online Account Opening, 2011
3 Javelin Strategy & Research, Convert `Silent Attrition’ into Banking Engagement and Profits, 2015
4Javelin Strategy & Research, 2011 Online Account Opening, 2011
5 Kofax, Transforming the First Mile, Customer Onboarding for Financial Services, Survey of 200 financial services customers
6 Thomson Reuters, 2016 Know Your Customer Survey, May 2016
7 Capgemini Consulting, World Retail Banking Report, 2015
8 McKinsey and Company, Automating the Bank’s Back Office, 2012
9 American Express, American Express® Global Customer Service Barometer, 2011