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For banking customers in a digital world, first impressions still count

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As the decade after the 2008 financial crisis comes to a close, retail banks are turning their attention once more to growth. Acquiring and onboarding new customers are key areas of focus. Banks sell more products to happy customers. So, delivering an excellent digital onboarding experience is crucial to starting off on the right foot with new account holders. Banks spend between $25 and $35 billion annually on customer onboarding efforts around the globe. Despite this, onboarding remains a universally frustrating customer experience, with long cycle times (running into days in the most extreme cases), manual interventions, and fragmented legacy systems.

But it’s not just poor onboarding experiences that lead to disengaged customers. Confusion with new products is a big problem as well. Customers who don’t get the support they need during the important post-origination period are unlikely to become the engaged, active customers that banks are looking for.

Building a better customer relationship

The shift toward customer growth comes at a time when the market is changing radically. Several key factors need to be considered:

Customers are becoming more demanding and less patient

The bar for performance has risen and continues to do so. Customers’ expectations are more likely to be shaped by the likes of Amazon and the other e-commerce giants than by banks. As a result, being better than other established banks is no longer good enough. Customers don’t want to be bounced around from product to product. They don’t want to have to fill in long forms. And they definitely don’t want to go to a branch if it isn’t convenient for them. They expect to be able to do it for themselves with the minimum effort and have applications executed right away.

Technology is continuously creating new opportunities

Digital banking interfaces can bring together different technologies to deliver simple processes for customers. For example, banks can gather customer data automatically without the need for manual input and can predict their needs based on online and offline activity. Customers can identify themselves remotely using cameras, video, and biometrics. In the middle and back offices, cognitive computing can automate data review and decision making. Intelligent automation can also eliminate manual effort. New devices and applications continue to come to market and will keep pushing the boundaries of what is possible.

New entrants and evolving regulations are increasing competition

Many starts-ups have joined the market, often focusing on one product or service. These disrupters have to stand out to survive. They have created excellent customer experiences and done well to leverage the latest technology. Some have been strikingly successful at acquiring new customers – for instance, the digital-and mobile-only UK-based Monzo signed up over 400,000 users in its first year. New entrants are also benefiting from new regulations for account switching and open banking that some markets are introducing, such as the Revised Payment Service Directive (PSD2) in the EU. This gives new entrants access to wider sources of customer data and a greater chance of success than ever.

How do banks compete?

Banks are under pressure to acquire new customers. But more than that, they need to sign up customers, who will become engaged and active, with a high level of satisfaction, which is crucial to building deeper relationships and ensuring future product sales. Where does this start? With an outstanding customer onboarding experience.

To make that happen, some banks have already transferred ownership of the onboarding process from the operations team to a team overseen by the chief executive officer (CXO). This reflects the need to design a customer journey without the constraints of legacy systems or processes. And, of course, all of this must be done at low cost.

So, what makes for an industry-leading onboarding experience? There are three key elements.

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Excellent process design

  • Short onboarding processes that deliver in real-time
  • Fewer (or zero) documents required from the customer (non-documentary application)
  • Minimal exceptions

Effective customer service

  • Customer support in the channel medium of their choice
  • Coordinated, consistent experience as the customer moves from product to product
  • Timely and accurate information and recommendations

Post-application focus

  • Targeted activation support to ensure that customers get the best from their products and become active users
  • Sales compliance checks to ensure that products have been sold appropriately (and thus avoid regulatory fines) and to address customer issues proactively
  • Actionable insights to ensure process excellence is maintained

Getting it right

Given all that needs to be delivered, creating an industry-leading onboarding experience may seem like a daunting prospect. However, after each of these requirements has been broken down, there are many tools and processes available today, which can transform a bank’s performance.

First and foremost, it is crucial to start with an outside-in customer journey design. After that has been completed, it is possible to determine which of the following capabilities will the deliver the experience that customers need.

  • Intuitive and flexible digital banking interfaces to provide a route for customers to self-serve, with the capability for a bank to extend or customize
  • ID scanning and verification to enable customers to complete remote authentication and know your client (KYC)
  • Intelligent optical character recognition (OCR) for document reading to remove the need for manual data input by the customer
  • Dynamic workflow to enable banks to respond quickly to the changes required by markets and regulations
  • Automated integration to third-party data sources to remove the need for extensive document submission by customers
  • Use of intelligent processing to:
    • Organize referrals
    • Manage parallel product applications
    • Automate execution
  • Integrated web-chat, co-browse and video-chat to support informed and effective customer support interactions
  • Automated support provision to staff and customers through chat-bots and recommended next actions to provide real-time, consistent guidance
  • Comprehensive and actionable analytics to identify priority customer accounts for outreach:
    • Speech and unstructured data analytics
    • Sales and customer journey analytics
    • Activation and sales compliance analytics
  • Campaign execution to deliver effective customer-activation communications

A journey of a thousand miles

Technology will become more complex. New entrants will become more sophisticated. Data will become more available. Banks, therefore, cannot afford to wait. Onboarding should start with an important single step. Now is the time to grasp the opportunities of onboarding before:

  • Poor onboarding experiences damages brand equity
  • New entrants emerge as major competitors
  • Early investment ‘seed-corn’ customers are lost to other providers

Embracing new digital technologies for onboarding – and combining them with agile processes and industry-leading customer journey design – will allow banks to become more successful at engaging new customers and building profitable relationships with them for the long run.

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