The Intersection of Financial Institutions and Technology Leaders

Rethinking Digital Onboarding for Customer Acquisition and Retention

By Paul Provenzano

Onboarding is among the most important interactions a bank will ever have with its customers. When done right, it has the power to drive significant returns on investment, boost customer acquisition and reduce churn. It becomes a catalyst for positive change, benefiting both customers and the bank.

In today’s fast-paced digital world, consumers expect a seamless and convenient experience. However, many traditional banks fail to provide such an experience. Onboarding processes are often cumbersome, paper-intensive and time-consuming. This is where fintech providers can step in, armed with innovative technologies that are reshaping the landscape of digital onboarding and account funding.

The Art of First Impressions
The onboarding process plays a vital role in establishing the first impression of a bank and its customers, establishing loyal and enduring relationships. It is essential that the first interaction leaves a positive, lasting impression.

Studies show that potential new customers abandon the process due to complexity (30%), lack of access to identity documents (38%), lengthy application time (21%) and extensive information required (21%). In its newest report, The Digital Onboarding Report 2023, ebankIT highlights that 90% of financial institutions report digital abandonment, resulting in potentially millions of dollars in lost business. Customer abandonment is a significant challenge banks face during the onboarding process.

In an era of rising competition and technological disruption, it is necessary that banks provide their customers with a seamless and convenient digital banking experience, from account opening and funding to adding new products or services.

The Road to Better Digital Onboarding
Digital onboarding offers convenience to customers and reduces operational costs for banks. However, optimizing this process can be a challenge for banks without the partnership of fintech providers that offer solutions to overcome this challenge.

1. Speed
Speed is paramount in reducing onboarding churn; customers expect to be able to complete the onboarding process in a matter of minutes, not days. It is crucial to streamline processes that provide customers with all the necessary tools to complete their journey effortlessly.

2. Streamline identity-checking processes
New customers expect prompt verification when they upload their identification and may find delays caused by manual checks to be unacceptable. Financial institutions that prioritize robust and automated KYC processes and invest in quick and accurate identification verification technology can reduce customer abandonment risks and establish a positive relationship from the start.

3. A secure and seamless process
Offering effortless biometric authentication methods like fingerprint or facial recognition makes customers more likely to complete the process, reducing churn. Additionally, the inclusion of e-signatures expedites the overall process, allowing customers to conveniently sign documents anytime, anywhere.

4. Automate, reduce manual work
According to The Digital Onboarding Report 2023, institutions that automate processes can reduce their costs by 50%. Banks should look for ways to minimize manual data entry and embrace automation wherever possible. Thanks to automation, financial institutions can eliminate the need for manual work and allow their employees to focus on more challenging tasks.

5. Human touch
Digital customers still require access to human assistance when needed. The human touch involves more than just employing staff at the right times during onboarding. Humanized digital technology, including chatbots, can help banks meet clients’ needs and improve onboarding. Combining humanized tech with easy access to human support through chat or voice calls is a reliable way to reduce abandonment.

As banks venture into the realm of onboarding, they must prioritize five fundamental characteristics to truly excel in this ever-evolving landscape. First and foremost, speed is crucial in our fast-paced digital world. Customers expect a quick onboarding process, sparing them from days or weeks of waiting. However, speed alone will not suffice. A customer-centric approach is equally important. The onboarding solution should revolve around meeting customers’ evolving needs, ensuring satisfaction and fostering loyalty. Moreover, it is essential for the onboarding process to seamlessly integrate across different channels, minimizing any obstacles while automation improves efficiency and fosters customer satisfaction. Lastly and perhaps most importantly, by incorporating a human touch, banks can create tailor-made experiences that build stronger, lasting connections.

Paul Provenzano is vice president of market development, with ebankIT.