By FintechOS · January 05, 2022
5 minute read

How to build a better digital onboarding journey

How to build a better digital onboarding journey

Lessons from banks, fintechs and financial institutions on how to win new customers in a super-competitive digital landscape 

Key takeaways:  

  • Good onboarding can welcome new customers in large numbers, whilst bad onboarding can scare them away
  • Retail banking is “in the fast lane” in Central and Eastern Europe with financial institutions across the region “progressing well” in their digitization programs.
  • Onboarding customers digitally, securely, and seamlessly is non-optional, because failing to do so puts banks’ future at risk

New customers are the lifeblood of retail banking and it’s never been easier to win them… or lose them.  

Consumers now have more choices than ever before, and the advent of digital onboarding has made it unprecedently easy to try out new banks and bank-like services.  

So what makes for a good onboarding? What lessons can we learn from digital innovators?

To answer these questions, we investigated onboarding in Central and Eastern Europe (CEE), highlighting best practices and celebrating great ideas. We have set out four steps to great onboarding and set out some of the ideas being pushed forward by forward-thinking financial trailblazers including Unicredit, Tatra Banka and Luminor Bank.  

One lesson is clear:  banks need to digitize or they will decline. This is true of incumbents, but also challengers, because one day even the young, fresh innovators will be disrupted by new innovation.  

Context: why we are focusing on CEE 

Banks in CEE have been investing heavily in digitization for many years, whilst there is also a thriving fintech scene bringing new products and solutions to market.  

In a report published in May 2021, S&P Global said retail banking in CEE was “in the fast lane”, with financial institutions across the region “progressing well” in their digitization programs.  

The combination of digitally savvy workforces, widespread access to technology and “sound income” buffers has allowed banks in CEE to accelerate digitization to a speed that “outpaces many European peer countries,” S&P continued.  

But although the analytics firm praised the sector’s embrace of mobile-first and digital-first services, it had a warning for both incumbents and challenger banks.  

“All banks will need more digital investment over the next few years to keep up with rapidly rising customer expectations, in our view,” it wrote.  

“For digital frontrunner banks, this means safeguarding their competitive edge, while for laggards, the viability of their business models is at stake.” 

This is a lesson that all financial institutions should heed. Although most banks had at least made a start on the digital transformation journey before 2020, the pandemic forced them into an urgent fight for survival.  

One giant leap for banks 

The pandemic has pushed forward digital development by several years, with plans – which were already in existence but not prioritized or funded – brought forward at the same time. This period of change offered opportunities for trailblazers, as well as traps and pitfalls for slow movers. 

In November 2020, Keith Jordan, VP of Mastercard Labs, said that the pandemic sparked a huge jump forward in both “technology and thinking” that resulted in up to 15 years of progress taking place in little over six months. 

“If you’re not digital-first today, you’re pretty much going to be dead in the next few years,” Jordan concluded during a talk at the 2020 FintechOS Annual Summit.

The situation may sound alarming, but in fact it is a huge opportunity for incumbents to take a leap forward before neobanks exploit their head start. Customer onboarding is one of the most important aspects of any digitization drive. If a bank does this right, it will be able to bring on new users and gain measurable ROI. Which is building great onboarding experiences is non-optional. 

Research from the digital identity firm Signicat suggested that individual banks are losing an estimated €5.7 Billion each year due to poor onboarding, with 63% of Europeans reporting that they abandoned a bank sign-up process in the 2020. This is the worst figure since Signicat began their research in 2016 and an increase of 23% from 2020.  

Asger Hattel CEO at Signicat, said: “As a result of the pandemic, onboarding customers digitally, securely, and seamlessly is vital for organizations to continue doing business. Billions are spent on clever marketing and compelling products every year by the smartest people in the business and it works, with millions of potential customers starting applications for financial products.  

“Yet it is vital that the industry takes note of where they can improve the onboarding experience, in order to turn these applicants into actual customers. 

FintechOS is dedicated to enabling banks, insurers, fintechs and other financial institutions to build cutting-edge experiences, including world-class end-to-end onboarding journeys. In this paper, we explored the state of digital onboarding in retail banking across CEE and set out lessons that can be applied not only in the region, but the rest of the world too. 

The future of onboarding lies in building customer-centric, data-driven and easy-to-use journeys which make signing up for a bank account as easy as opening up a social media profile.  

FintechOS is here to help any banks that want to get started on their own journey to better onboarding.  

Click here to read the paper and learn more about great onboarding.

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