Digitalization is transforming banking services, so why not onboarding?

Re-approaching onboarding for Banking in this digital-first world.

Customer onboarding is like a first date, it sets the stage for where this relationship is headed in the future. Onboarding needs to be a simple and seamless process. If the customer feels that your process is lengthy and complicated they are very likely to drop out.

While online banking services has made banking a hassle-free and convenient experience for all of us. It has also created a situation where people have started holding financial institutions to the same standard as they do companies like Amazon, Facebook, Whatsapp, etc. Everything is expected to be real-time and since onboarding in banking is very complicated and regulated it causes these institutions to lose customers.

As stated in the 2017 account opening and onboarding benchmarking study, the negative impact of a lost customer is at least $400 based on the sunk cost of acquisition and the revenue potential of a new customer.

The major challenges that customers face with existing online onboarding processes are:

• The online process redirects you to manual processes:
  The entire onboarding process from registration to identifying who one is often required to be done manually/in person without making the most of available technologies.
• Being asked for the same information multiple times:
  In this globalized economy and heightened regulations, the emphasis has shifted from customer experience to protecting the institution, which leads to multiple touchpoints and complicated processes.
• The delay in verification and access:
  Manual processes that banks are not only time consuming but the time it takes to verify after the user has provided all required information can also be very unpredictable. Although banks have large teams focused on just onboarding, the lack of automation causes backlogs that result in customer’s dropping out.

Challenges that banks face in addressing these concerns:

• Lack of structure in current processes:
  Banks have multiple departments and each one of them has their own definition of compliance which leads to multiple processes.
• Changing regulations:
  Regulations around the financial sector change so often that it becomes very difficult for banks to comply while also automating and simplifying their services.
• Culture:
  While the messaging banks always put out shows their intention in getting close to the customer and making things convenient for them, underinvestment in understanding the customer’s changing needs and innovating accordingly shows a gap in the culture.
• Access:
  Users hold financial institutions to the same digital standard as they do companies like Amazon, Facebook, etc. Everything has to be real-time. Since banks have to comply with so many regulations granting access in the way that these companies do becomes impossible.
• Time-consuming:
  Every process is banking is very disconnected from each other. Multiple touchpoints require multiple authentications which are unnecessarily time-consuming from a user’s point of view. Existing processes that are mostly done manually just don’t match up to the demand.

This creates backlogs and delays access for users.

Some might argue that opening an account in the bank is better and customers have higher satisfaction in a face to face interaction. But, the reason for that could also be that the existing online processes are not efficient and lack simplicity. The solution is not going back to old manual processes which were time-consuming and unreliable but what banking industry needs are a digital transformation of its onboarding processes.

As per Mckinsey, for every one-point increase in customer onboarding satisfaction on a ten-point Net Promoter Score (NPS) scale, there was a 3% increase in customer revenue.

Now that banks are seeking to improve digital banking satisfaction, reducing costs while simplifying processes for the consumer; an ideal solution for banks is an omnichannel which is:

1. Simple for the user
2. Easy to integrate
3. Has improved capabilities to detect fraud
4. Saves time and costs otherwise being spent on manual processes.

The acceptance of technology with a customer-first mindset is what banks need to improve onboarding in this digital-first world. Verizy is built to address all the points mentioned above.

Verizy combines OCR with AI technology bridging the gap between user experience and compliance which helps organizations meet compliance regulations, prevent fraud as well as simplify onboarding. It is as simple as taking a selfie for the user and reduces the verification time to seconds which appeals to their expectations of everything happening in real-time.

While making processes efficient for end-users, Verizy also makes things simpler for the organizations. It only takes a single line of code to integrate and is adaptable to most platforms.

Make smarter business decisions by leveraging machine learning for user verification and reduce your manual KYC costs with VERIZY.

References:

2017 account opening and onboarding by Digital Banking Report.

Putting customer experience at the heart of next-generation operating models by McKinsey.