Five Ways To Assess Your Bank’s Onboarding Capabilities
The questions banks need to ask when signing up new customers
Digital technology makes it unprecedentedly easy to win new customers – or lose them forever. Modern consumers now expect a sophisticated, streamlined experience when signing up for any online service. Which is an opportunity for banks with well-designed onboarding processes, as well as a trap for those which fail to offer prospective clients a clear, effective and engaging journey.
During the pandemic, millions of people around the world started banking online – many of them for the first time. In the UK alone, an estimated six million people switched to online banking during the first month of lockdown. In the US, 35% of respondents to a poll said they were now using online banking more than before.
Research from the digital identity firm Signicat suggests that individual banks are losing up 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 past year. This is the worst figure since its research began in 2016 and an increase of 23% from 2020.
It’s time for all banks to focus on onboarding, whether they’re challengers or neobanks stepping up to meet the demands of digital-first customers or venerable institutions undergoing digital transformation.
To help you work out if your onboarding process is shipshape or sinking fast, we’ve set out five questions you should be asking about signing up new customers.
1. Is The Process Personalized?
The era of stock letters headed with the words “Dear New Customer” is well and truly over. When people sign up to online services, they expect personalization starting from the moment they first make initial contact right the way through their onboarding journey and then onwards into day-to-day banking.
Banks need data to personalize, which can be gathered in a variety of ways. They could take the simple option and ask questions of new sign-ups, for instance, to assess their needs or collect metrics allowing them to offer specific products. A customer’s IP address can be telling, indicating where they live and therefore offering clues into their financial situation. As well as location, time and context can be important ways of assessing customers. People who log on from work or those who launch onboarding late at night are also giving away information about themselves which can be useful to banks.
Personalization should continue throughout the onboarding journey and beyond. This could include small interface tweaks, such as autocomplete so that customers don’t have to answer the same questions. Or it could be as simple as showing a message saying “hello” using their first name whenever they log on. The future is personalized and any bank that’s failing to provide the human touch in automated systems could be at a disadvantage.
2. Is KYC effective?
There’s no getting around Know Your Customer (KYC) routines, which allow banks to prove the identity of new customers. But this process can be a huge pain for onboarding clients if they have to submit endless paperwork or repeatedly try to upload a passport picture to an ineffective photo scanning application.
KYC processes can take weeks for retail banks, leaving new customers frustrated. Corporate onboarding is even more protracted, with one study finding that the process lasts an average of 31 days.
New technology can help KYC run smoothly. If you’re going to scan passport images or other government-issued documents, make sure the system is working effectively and is robust enough to cope with poor-quality images or other imperfections.
Digital identity is also becoming a great way of performing KYC. Government-run electronic identification systems like eID in Estonia or Aadhaar in India can speed up onboarding, as can services provided by private companies like the credit score company Experian. Magic links are also extremely useful, because they offer the ability to undergo authentication just by clicking on a link sent within an email.
KYC is non-optional. But it doesn’t have to be a non-starter. Get it right and you’ll win more new customers.
3. Is the onboarding process physical?
When people sign up for a Spotify account or join Netflix, they don’t expect to have to visit a physical shop to verify their identity or pay a subscription fee. Likewise, digital consumers will be put off if they are forced to spend a long time typing details into onboarding forms and uploading identifying documents, only to be told they need to head into a branch.
For neobanks and challenger banks, this often isn’t a problem because they are digital-first companies. But for established financial institutions, this can make the difference between winning a new customer and losing them. Friction is the enemy of onboarding, so allowing the process to be completed without a visit to a physical branch is extremely important.
4. Are You Meeting Modern Customers In The Right Place?
Banks around the world are realizing that customers must be allowed to use banking services right inside the apps or ecosystems they use every day. In India, for instance, ICICI Bank offers five mobile applications for various customer segments as well as a service on WhatsApp, allowing users to check their balance, see details of recent transactions or even organize loans and extend credit cards limits. Onboarding can also be carried out using IciciStack, a banking platform made up of more than 500 individual banking facilities including customer signup journeys.
Anup Bagchi, executive director, Icici, said: “Our retail customers can execute a host of their banking requirements on their own, without visiting a branch. The services are instantaneous and secure. With the growing prominence of social media in everyday life, we believe that this would add immense convenience to our customers, as it allows them to bank while they are on social media.”
Wise words. Apply these to onboarding and the lesson is clear. Meet your customers on the platforms they use in their day-to-day lives and you’ll make it easier for them to sign up for a new account.
5. Does The Process Speak To The Customer?
To smooth the onboarding journey, it is important to allow customers easy access to assistance. This could be in the form of a chatbot in the first instance or a call centre to deal with more complex concerns. Chatbots can be particularly effective because they can answer up to 80% of questions, but must always be backed by humans in case new customers get into difficulties that cannot be solved by automated responses. It’s important to get this balance right, because it’s extremely frustrating and even infuriating to get the same stock responses from a bot when asking questions.
Dyring the onboarding process, it’s best to avoid any strong emotions such as anger, because customers will impulsively abandon the process if they feel upset or annoyed. Onboarding should be as gentle as possible, with as few obstacles to get in the way of the journey. Making sure customers knows there is someone there to help them can make the experience more pleasant and therefore push them to complete it.