Customer onboarding is a key moment for banks and financial institutions. The moment where the user establishes a relationship with the company and provides all the necessary information to become an official customer. Digital onboarding is transforming the entire process all over the world.
Traditional onboarding process involves a lot of paperwork both for the customer and the staff such as form filling, manually verifying paper files and in-person ID verification. These tasks are time consuming, lead to errors and definitely not secure. Fortunately, in recent years digital technologies have helped to optimise these processes and reframe onboarding methods for a great customer experience.
Drawbacks in Traditional Onboarding in Banking
- Visiting a Bank Branch
Asking customers to visit a branch in person. It is time consuming and needs appointment scheduling at times . A lot of setbacks with a painful experience. - Human Verification
With human verification cannot spot fraudulent transactions and becomes less reliable. - Paper Documentation
Filling forms manually is time consuming and an inefficient task. At times customers are required to answer multiple times for the same questions. - Delayed Access
Compliance checks need to be done, which delays the entire process. Many times this process is managed by third parties. Customers often have to wait for hours to end up using the service.
Challenges in Digital Customer Onboarding
- Lengthy and complex onboarding process
As per a survey millennials find traditional banking to be outdated and least interested to take up any product or service offered. The major reason for this seems to be below average customer experience.
Also the improper transition between branch-led and digital led operations impacted a smooth client experience across multiple touchpoints.
Although banks who support the digital onboarding process are not able to onboard new customers without collecting some physical documents or delays. Similarly, banks offering multiple services need to go through these complex processes multiple times for these services.
- Growing demand for 360 degree banking services access
Customers have huge expectations of getting the full range of banking services at the tip of their hand. Specifically on their laptops and mobile for 24/7. Majority of the customers would consider banking with a completely branchless and digital first bank.
- High customer churn rate
Customer churning rate is always the biggest issue for banks and fintechs when signing up new customers through the digital onboarding process. They left applications due to lengthy processes or were deterred by too many detailed requirements.
A lengthy application process is one of the leading reasons behind customer churning. For digital focused customers with less patience and a short attention span, this can lead to poor client experience.
- Continuous regulatory changes
As a result of the 2008 global banking crisis, banks are now needed to comply with frequent changes in financial regulations and policies designed to protect banking customers.
Although banks are focused on providing good client experience, they also need to modify their onboarding process to be in line with the new regulatory framework. In such cases, banks need to quickly adopt changes into their existing process.
How Banks Can Implement the Onboarding Process
How do banks execute the digital onboarding process to overcome these challenges?
Highlighting some key elements of an effective customer onboarding process:
- Align customer data for better customer experience and cross selling
Banks need a single framework that saves all customer data automatically and integrates with all applications. Automation in this helps in reducing data repetition and resolving inconsistency issues. Also a centralised DMS can do a lot more in managing KYC documents and align with regulations. Based on the offered service and location, banks can store the relevant documents in the central database and integrate them with the onboarding process to make them available as needed.
- Optimize the onboarding process
A perfectly designed onboarding journey can provide a seamless customer experience. Understand your customer interests and preferences before designing the process. New potential customers could be millennials whereas commercial customers will be from different demographics, having different interests. Make sure to balance compliance and the customer experience. No double work needs to be promoted.
- Mobile first approach
Despite a significant rise in online account opening, a very few banks provide account opening options using their mobile phone. In addition a mobile first strategy must be adopted to give a better customer experience. Customers are appreciating various digital channels to get their queries solved. Banks must be able to integrate this approach with human interaction at various touchpoints.
- Governance and Regulations
Banks require end-to-end governance that can spread across leadership levels. Committed teams can manage onboarding activities including KYC and SLAs. Measure parameters like conversion and churning rate, onboard timing and conversion rate post skipping at different levels.
- Automate customer follow ups
Customers often need support and it may be harder for them to get the process done. New customers will often seek important information that the onboarding process carries. As a solution, banks must automate the customer follow up by providing them details about new product features, offers and discounts.
Finally, perfecting the onboarding system through market testing and validating. A well designed testing method can help in filtering out what needs to be double checked from the onboarding process.
Conclusion
As more and more fintech companies disrupt the traditional banking model, the future of banking depends on how they can strengthen their customer relationships through an effective onboarding process. Seamless onboarding can be achieved only through customer focused processes.
Trust Survey by Innovatrics even suggests that 63% of customers abandon digital bank onboarding. It is also hinting at biometrics as the solution. Digitap is providing a full-fledged customer onboarding suite containing all the different possible solutions.
Perfect Customer Onboarding Suite
Digitap is providing a well designed onboarding suite which could help you with various solutions such as Aadhaar based KYC, Video KYC, OCR and validation, Digital signature solution and Facial recognition.
To learn more about Digitap’s Customer Onboarding Suite Click here
You can also Book a Demo or write to us at sales@digitap.ai to get started.
