7 Steps to Improve Customer Onboarding

Onboarding should be as flexible and frictionless as possible. When customers see the speed, ease, security and convenience you demonstrate during onboarding, their positive perception of your brand — as well as the likelihood they will become a customer — is reinforced.

In the banking industry, customers are at the center of business disruption, and financial services organizations are scrambling to meet their demands. It’s easier than ever for customers to shop for competitive offers, and surveys show an increased willingness to switch among bank and credit union customers.

Your customers now expect the same convenience and contextually relevant communication from your institution that they enjoy in other areas of their lives. They hold your organization to equally high standards for premium digital experiences.

Success lies in setting your organization apart with advanced onboarding functions like mobile-enabled digital processing and the ability to gain insights into real-time customer data.

For the four consecutive years, the Digital Banking Report has published a benchmarking study on the current state of new account opening and onboarding. For this year’s study, sponsored by Kofax, a survey of financial services organizations worldwide was conducted to determine the extent to which organizations have leveraged digital technology to improve online and mobile account opening and multichannel onboarding.

The 74-page Digital Banking Report, 2017 Account Opening and Onboarding Benchmarking Study provides an in depth analysis of how well banks and credit unions are doing to support the open and onboarding of new accounts using online and mobile channels. The report also provides a road map for narrowing the gap between what customers want and what financial institutions are delivering. Here are some excerpts from the report, discussing ways to assess and improve your institution’s onboarding process.

Maximize Your Onboarding Investment

Many banks use multiple core, legacy platforms in their struggle to deliver more consistent customer experiences, but these outdated an disconnected platforms just can’t keep up. Perfecting the onboarding experience requires more than just rethinking your business processes. In order to succeed, your underlying technology must support continued innovation of front, middle and back office processes. Improving these processes makes it possible to provide the experiences customers want.

In addition to end-to-end bank process improvement, the onboarding solution you choose must have the flexibility to integrate with existing systems.

7 Ways to Assess Your Current Onboarding Capabilities

The best place to start to improve your onboarding process is to assess where your organization is today. Use the iquestions below to see how your onboarding process compares to banking industry benchmarks within this report.

If you don’t have the answers to some of the questions, that’s okay. You’ll likely gain valuable insight just from gathering the information described below.

What is Your Attrition Rate? The average first-year attrition rate for the top 100 banking institutions is 20%-40%. What’s the first-year attrition rate at your organization?

What is Your New Customer Acquisition Cost? Acquisition costs for banking customers vary widely. Financial institutions can invest anywhere from a few hundred dollars to more than $20,000 for each client they onboard. What’s the average cost for your organization to acquire a new customer?

What is the Average Time to Onboard a New Customer? Onboarding new banking customers can require hours, days or weeks, depending on process capabilities. On average, how long does your onboarding process take?

Read More: Emphasis on Digital Banking Demands Changes to Onboarding Rules

What are Your Business Bottlenecks? People, processes, underlying systems or data cause business bottlenecks. Prioritize who or what causes bottlenecks in your organization, with 1 being the most likely cause, and 4 being the least likely cause. Is it the people, process, systems, data, or don’t you know?

Where Does Your Customer Start Their New Account Opening? Primary channels for banking onboarding include a mix of computer, mobile, in-person and paper. What channel do most of your customers use to begin their onboarding process – the computer, mobile, in-person, paper or a combination of the above?

Where Does Your Customer Complete Their Onboarding Process? Now, it’s time to determine what channel is used by most of your customers to complete their onboarding process. Is it the same or different than where they started?

What is Your Customer Satisfaction Rating for Onboarding? On a scale from 1-10 (with 10 being high), how would you rate your organization in its ability to assess customer onboarding satisfaction? Getting an accurate measurement of customer satisfaction is a key goal for most financial institutions. Leading financial organizations use analytical tools such as a net promoter score, straight-through processing rates, and not in good order (NIGO) resolution to measure customer satisfaction.

Now that you’ve answered the questions above, you should have a good idea of where your organization is on the journey to digitization. Use the seven steps in this section to start developing a successful digital onboarding strategy.

Step 1: Curb Customer Attrition Rates

Research reveals a global increase in overall customer willingness to change banks. This is particularly true for the Millennial segment, who have only known a digital world. They understand how easy it is to switch loyalties and don’t see any reason they should treat your bank differently than another service provider.

Given this pressure to reduce attrition rates, the onboarding process is that much more pivotal. Studies show that when your customers decide to leave, it’s usually early in the relationship. In fact, 43% of those who had low satisfaction during new account opening indicated they will “definitely or probably” switch banks as a result.

It’s important for your customers to see onboarding as a single process, no matter how many channels they use. To avoid losing customers, your onboarding strategy must offer leading-edge experiences that:

  • Are consistent across multiple channels
  • Avoid repeatedly asking customers for the same information
  • Are near-real time and reliably accurate
  • Keep customers informed

Give your customers the choice of interacting via any channel, at any time. Customers who experience “anywhere” onboarding with consistent information across channels are reassured that this convenience will extend to their day-today experience.

As our research found, financial institutions still require duplicate entry of information, even when a customer is buying a new product from the same financial institution. To reduce frustration, customers should never have to enter information more than once, especially when switching from one channel to another.

Large financial organizations struggle to arrive at “one version of the truth.” Ensuring information is up-to-date and in sync across channels reassures customers that they have anywhere-access to always-accurate data.

Step 2: Reduce New Customer Acquisition Costs

Onboarding costs can vary widely from bank to bank, but there’s no doubt that reducing these costs can make a big impact on your bottom line. Customers are more likely to stay once you acquire them. But to get
there, banks often spend anywhere from several hundred to thousands of dollars for each customer gained.

Although many bank legacy systems function well, other systems tend to be inefficient, inflexible, and expensive to support. A recent report shows that up to 90% of technology budgets is being used to support these aging systems. That’s a big investment for a solution that may not be able to meet future technology needs. In addition, manual onboarding can cost up to twenty times more than automated systems.

If you want to reduce new customer acquisition costs, begin by digitizing your paper-based processes. Start with those processes that require your customers to deliver, fax or mail physical paper forms. Reduce the cost of new customer acquisition even more by providing:

  • A single-vendor, integrated platform that flexes to meet new requirements without disrupting customer transactions
  • Multichannel onboarding capability (especially mobile) that provides pocket-friendly banking
  • Onboarding transparency that reduces the need for customer support calls

The other side of cost reduction is boosting revenue as a result of onboarding. For example, when you provide an easy way for customers to switch to your bank from other banks, average new account profitability can increase by as much as $212 per year according to research.

Read More:

Step 3: Accelerate Average Onboarding

When onboarding takes too long, your customers will seek other solutions. In fact, at some banks customers abandon up to 90% of new account applications prior to their completion.

So what slows down onboarding enough to frustrate customers? You guessed it: legacy systems that still require manual intervention and paper based interactions.

You can reduce the time it takes to onboard new banking customers by:

  • Eliminating disconnected, manual processes in favor of integrated, automated processes
  • Offering customers their choice of onboarding channels
  • Providing customers with process transparency

The first “easy win” for shortening onboarding time is to use automated, versus paper-based, processes. This change alone greatly reduces onboarding time for your customers. For best results, your automated processes should leverage an integrated platform instead of multiple, separate tasks and apps.

When your customers are enthusiastic about making a purchase or submitting an application, the last thing you want to do is make them wait until they’re in front of their home computer to complete the necessary steps. Consider ways to make it easier for your customers to exit the process from one channel and enter from another, picking up where they left off.

Any-channel access to application status and timely, relevant updates are must-haves for consumers accustomed to full transparency in other digital experiences. Once onboarded, customers also expect to receive relevant communications as they begin a relationship with your bank.

Step 4: Identify and Eliminate Business Bottlenecks

Many organizations don’t have visibility into where bottlenecks exist or what’s causing them. Without full visibility, you can’t see the gaps in your onboarding process. Leading onboarding platforms help you pinpoint processes and tasks that need to be streamlined.

For example, nearly one in four customers says it’s too difficult to transfer their other accounts, such as mortgages, to their new financial institution. When your onboarding process gives them easy ways to add other accounts and services, they are much more likely to become active customers who use your institution as their primary bank.

Though it may be tempting to put client onboarding in the “important but not urgent” category, this is a mistake, because onboarding can be a make-or break moment in every customer relationship.

To eliminate a bottleneck caused by people, review each person’s role and responsibilities. Meet as a group to learn where process gaps are and get the team to agree on the specific changes that need to be made to correct the problem.

If it appears that the process is the problem, view the entire process from the outside-in, starting and ending with the customer experience. This way, you’re not forcing customers to comply with the limitations of existing processes. Instead, you’re showing them what could be.

For an issue related to systems, implement a flexible, scalable IT platform that supports more than just onboarding. Systems stay in sync and you can customize the user experience to keep up with customer expectations.

Finally data issues are usually caused by legacy silos. Housing information in multiple silos usually ends up with different versions of the same document (and data). Consider creating a single place to store client data and let everyone know this is the single, reliable source.

Step 5: Let Customers Choose Their Channels

When customers have positive experiences engaging with your organization, they tend to buy more of your products. Therefore, you want to make it easy for them to bank anytime, using any channel or device, in the ways they prefer.

Offering multiple channels – such as PC, mobile, in-person, paper and call center – helps you increase customer satisfaction and grow your business. Based on recent surveys, the vast majority of customers stated they used multiple channels at least weekly:

No matter what the channel mix may be, frictionless onboarding is the goal. That means giving customers the flexibility to set aside their onboarding process in one channel and subsequently pick up where they left off in another channel.

Read More: The Right Balance of Digital vs. Physical Banking Channels

Step 6: Measure Customer Satisfaction During Onboarding

A critical measurement of onboarding success is completion. Most financial organizations see a completion rate of about 30% for new account opening and 10% for loan applicants. This is even worse for mobile completion rates. Streamlining onboarding can improve completion rates, as well as provide other insight into customer satisfaction.

To measure and monitor your onboarding process, you need a platform that provides information not only about past performance, but also about current processes and how to improve them. Look for:

  • Customizable dashboards that provide key performance indicators and metrics
  • Reporting and analytics that are tailored to facilitate faster, more informed decision making

In this way, you can engage and learn from your customers in near-real time, using their feedback to continue to refine the onboarding process.

Step 7: Gather Resources and Compare Solutions

Customer onboarding is just one part of a company’s effort to digitize from end to end. Plan ahead to make sure you have the best platform in place, as well as the team support you need to improve the onboarding experience for your customers.

Identify individuals within the organization who have the capability, time and talent to help you develop and implement your plan. Make sure to include management from relevant business groups in your onboarding team. Leverage this team to help you trace where problems tend to occur, where SLAs exist, where corporate governance comes into play and where fines have been assessed.

Ask management these questions:

  1. What innovations to the onboarding process would be helpful to our business?
  2. Where can our business make more money (such as new business ventures)?
  3. Where does our business need more visibility and advanced warning of service level risks?

Download the Report

The Digital Banking Report, 2017 Account Opening and Onboarding Benchmarking Study provides an analysis of how well institutions engage with consumers throughout the entire customer journey using digital tools. By analyzing how well banks and credit unions are currently able to open new accounts, onboard new customers, and continue the selling process using online and mobile apps, we hope to establish a benchmark for future analysis and success.

The report includes the results of a survey of more than 200 financial services organizations worldwide. The report has 78 pages of analysis and 43 charts/graphs. Most importantly, the cross-tabs by organization size and type allow a comparison of peers.

You can download an executive summary of this Digital Banking Report by clicking here. Subscribers to The Digital Banking Report and those wishing to purchase the complete report can access it immediately by clicking here.

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