The Keys to Successful Digital Onboarding for Banks

Some of the best customer experience-driven companies have mastered the art and science of digital onboarding, including personalized, ongoing follow-up to make sure the customer stays engaged with the brand. Research shows almost half of banks and credit unions ignore onboarding. Done right, it begins before account opening, and creates huge revenue potential.
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A few months ago, I went to sign my kids up for our community baseball league. In order to make the teams even, there’s an evaluation procedure where the kids go through a series of booths to demonstrate their skills. When we arrived at the facility, there were kids running around everywhere and I was wandering aimlessly, unsure where to begin. Luckily, I found a person I knew, and he was able to orient me in the right direction.

It would have been really great to have a sign that said “Start here” and then step-by-step instructions from start to finish. Even better would have been someone meeting me at the entrance with, “Welcome, Mr. Willis. We’ve been waiting for you. I know you have two children to enroll today, and I’m going to walk you through the process.”

We’re talking about a youth nonprofit baseball league, so I understand they don’t have the resources for that kind of service. But the experience is a good example of the importance of a good onboarding process.

Let’s begin by defining onboarding in a nonbanking context: Onboarding is the process of making a product or service operational. Consumers have these types of engagements constantly.

Now let’s apply onboarding to financial institutions. We’ve all heard the stat that you have about 30 seconds to make a positive first impression. In the digital banking world, it’s even less than that. So it’s critical that those digital interactions are intuitive and relevant to your customers (and potential customers).

Customer Onboarding Still Lags at Banks

During our recent webinar, “Keys to a Successful Digital Banking Onboarding Process,” Jim Marous, co-publisher of The Financial Brand, and CEO of the Digital Banking Report, shared that he doesn’t think there is any more important element to the communication and marketing programs of banks and credit unions than onboarding. I couldn’t agree more. (In fact, I believe that onboarding should begin at the shopping stage of an interaction, but more on that later.)

In our discussion, Marous noted that the Digital Banking Report research shows that, over the last ten years, just over half of financial institutions say they have an onboarding process. Another 32% to 33% say they’re going to have one within the year, and the rest say it’s not in their plan right now.

“Those numbers haven’t moved in ten years, which means that, every year, around 30% of organizations say they’re going to create an onboarding process but never follow through,” Marous explained. “Can you imagine going to any retailer, any company, any organization and not getting a ‘Thank you’ after you’ve made a purchase?

Frankly, no, and that’s what banks and credit unions are doing when they fail to design and implement a digital onboarding experience that demonstrates a deep understanding of each customer’s unique needs.

And Marous noted that research shows that, even when financial institutions have an onboarding process, it’s not as effective or as efficient as it could be. Many organizations just touch base once or twice after a customer opens an account and then go silent. That’s a missed opportunity.

Q2 onboarding in the digital age

Relevance and Repetition

There is no magic number of times a financial institution should reach out to a customer. The key is relevance. As long as the message is relevant, connect as often as possible. If we’re giving them timely and useful information and use cases, they’re going to respond positively.

We want to increase the perceived value of a product or a service that we’re offering and help the end user understand what they’re going to get out of it, while decreasing the friction of obtaining that product or service. And we want to do it in a way that’s profitable.

For example, only about half of newly opened accounts survive past 90 days and only a subset of those are active and profitable. But capturing the direct deposit in a newly opened account relationship turns it from potentially unprofitable or inactive to active and profitable.

Stark Reality:

How many newly opened accounts survive more than three months?
50%

If you’re doing it in the right way and showing the value, you can reach out to the customer and say, “We noticed you just got a new job. Why don’t we move your direct deposit to your new account?” That’s actionable. It’s going to drive profitability.

You can take the same approach on the credit card front. If you know a customer subscribes to Netflix and recently got a new credit card, you could reach out and say, “You have this card with a great rewards program. Why don’t we set up automatic payments for your subscriptions?” It’s opportunistic, it’s relevant and it benefits the customer.

The interchange fees that the bank or credit union will get will drive value. So, if you take these principles — relevance, showing the value and decreasing friction — you can present opportunities to your customers, and those opportunities drive profitability. Everybody wins.

Personalization and Profitability

Now let’s go back to our original definition of onboarding. Marous and I agree that the definition must change to include the shopping stage. The average abandon-rate for new deposit-accounts openings is more than 50%, according to research conducted by Cornerstone Advisors.

Many consumers give up on the process because it takes too long or is too cumbersome. Seize that opportunity. A human should reach out to them as soon as they abandon the process and ask how the bank or credit union can make the process easier for them. If you do that, the person’s going to stay engaged. Then, once that person has opened an account, keep communicating directly with them. That’s successful onboarding.

Don’t Stop Short:

A bank marketer can’t assume that just because a consumer opens an account, the job is done. Onboarding is much more than the initial sign-up.

“Every one of these stages increases the revenue potential but, more importantly, increases the customer’s knowledge that you’re looking out for them,” said Marous.

At Q2, we’ve seen really strong results with that approach. Some of our clients are reaching out with a simple follow up to consumers after an abandoned account opening, and they’re reporting a 30% to 40% reclaimed rate. They’re turning these abandonments into active accounts and engaged customers.

The next step is to continue that onboarding process through every interaction. Think about how you engage with Instacart. Every time you engage with them, they’re collecting data to gain more insight into how to interact with you in the future, and so on. Same thing with frequent travelers and hotel brands. Every time you check in, you’re asked what kind of pillow you want or what your preferred room temperature is, and that data is used for your next visit. All of these companies are personalizing your experience and personalization creates stickiness.

The amount of effort that’s going to be required for someone else to get to know you makes it prohibitive for you to leave that service.

Data and Delivery

There’s a tendency to make this harder than it needs to be, but there are a few simple things that drive high profitability. The concept of relevant and targeted campaigns is fundamental. If you have relevance through the entire journey, that cross-sale won’t feel cheap or like a money grab to the customer. It’ll feel like you’re offering something they need, which will inspire them to move forward.

To do this successfully, you need a platform that enables you to collect, mine and store data on your customers — and then make it actionable. Such a platform can bring basic onboarding capabilities that are data driven, simply and easily.

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