Better Onboarding Isn’t Just a Perk. It’s Critical
Self-service isn’t just for consumers. Small business owners increasingly want the ability to open accounts on their own, without annoying hurdles. A streamlined, low-friction process is essential to making a strong first impression and building lasting relationships.
By Caroline Hroncich, Contributor at The Financial Brand
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Smartphones are now essential for shopping.
About a third of Americans make at least one purchase online via their phones per week, with usage rising to nearly 50% among people in their 30s and 40s, according to Pew Research Center. If something can be bought, chances are consumers want the option to do it on mobile. That expectation carries over to banking — but for many institutions, opening and onboarding a business account is still a tedious, complex and largely manual process.
This is especially important among small businesses, which do at least 75% of business lending at smaller financial institutions, a report from Goldman Sachs found. But creating a digital experience that’s user-friendly — while also addressing the unique complexities of regulatory, KYC and compliance requirements — is a significant challenge for smaller banks and credit unions.
Neglecting the onboarding experience for small business customers risks alienating a crucial client segment that often prioritizes local banking, says Jessica Pinkston, senior director in the delivery channels practice and practice leader of treasury, payments and operations at Cornerstone Advisors.
“There still is a desire for local small businesses to want to bank locally either with a local bank or a local credit union, but technology is going to become a big role in that,” she says. “Anything that financial institutions can do to make the daily tasks of banking easy, seamless and intuitive is going to help to retain and deepen those business relationships.”
So what are the best practices for streamlining and simplifying the crucial first hours and days of a new business banking relationship? It can be a complex process that requires a deep understanding of technology, user experience and customer relationships that many banks are navigating today.
Understanding the Needs of Small Businesses
To more effectively serve small business clients, banks have to find the sweet spot — somewhere between the high-touch world of corporate banking and the consumer account opened in five minutes during a subway commute.
“We have a tendency to think of them as consumers and if we do that, then we underestimate their business needs,” Pinkston says. “Or we think of them as if they are large and complex businesses, in which we overcomplicate their business needs. We really have to marry the two together.”
Business owners are busy managing their businesses, they don’t want to manage their bank, she added.
“Their most precious asset generally is time, most business owners are in time poverty,” says Mike Walters, president of business banking at KeyBank. Understanding how a small business collects from its customers is crucial — accelerating that process improves cash flow and strengthens the business’s financial position, he says.
“You have to understand the psyche of your client base,” says Walters. “They are experts at their trade, but when it comes to running their business, oftentimes they are not doing it as efficiently as they could.”
To truly meet the needs of small business clients, banks must design experiences that respect their time, simplify their financial lives and support their growth. That means building onboarding and service models that are as intuitive as consumer banking, yet robust enough to handle the nuances of running a business.
Focus on Automation and Customer Service
One of the most important ways to improve the onboarding experience for both businesses and financial institutions is to automate as much of the process as possible, says Sonja Kostron, director of business banking at Narmi.
Manual data entry often involves multiple steps, increasing the risk of errors and creating inefficiencies. Streamlining these processes with technology — especially by enabling users to save progress and return later — improves accuracy and eliminates redundancy. It also makes the experience smoother for both clients and employees, Kostron says.
Dig deeper:
- How to Close the Gap Between Potential and Reality in Tech Implementation
- Why the Universal Banker Model is Still a Work in Progress
- How Banks Can Build Revenue Engines from Customer Data
“It’s probably one of the most critical factors, it’s to get that relationship,” Kostron says. “If it’s a painful process, they may just choose to walk away.”
Another key priority for small business owners is the ability to easily connect with a knowledgeable bank representative — without needing to visit a branch in person. Navigating long hold times or impersonal customer service call centers can quickly become a point of frustration. Business owners want fast, efficient access to support when questions arise — whether through live chat, a direct phone line, or a dedicated relationship manager.
“If the business customer can’t get their questions answered, it doesn’t bode very well for their confidence level in how that business is thereafter going to support and service them,” she adds. “It’s like with all of us in any interaction that we have, if we have a bad interaction to start with anybody, it doesn’t make us look forward to the next one.”
Consider the Entire Financial Journey of the Customer
Onboarding is a critical first touchpoint in a client’s relationship with a bank — but it’s only the beginning. It sets the tone for the broader financial journey, one that should be supported with consistent, thoughtful service at every step.
Nikhil Lele, Americas consulting banking and capital markets leader at EY, likens onboarding to stepping into a luxury store or upscale restaurant — the feeling of being welcomed and valued leaves a lasting impression. In contrast, a poor first experience can stick with a customer, influencing how they perceive every future interaction with the bank. The overall environment and experience matter; if a client doesn’t feel confident in their decision to entrust their business to a bank, they’re unlikely to expand the relationship.
“It’s the equivalent of walking into a store and basically being told to leave,” he says. “It leaves a lasting impression on all things that follow.”
Financial institutions have made significant progress in streamlining these traditionally cumbersome processes, Lele adds. Tools like DocuSign and virtual identity verification have helped reduce friction, making it easier for clients to complete key steps without unnecessary delays. As digital innovation accelerates, improvements are happening at a rapid pace — but integrating these diverse tools into a cohesive, seamless experience remains a key challenge banks will need to address in the years ahead.
While these technological advances have eased some of the traditional pain points in onboarding, the ultimate goal isn’t just a faster process — it’s a more connected, intuitive, and value-driven experience. That initial impression shapes the client’s perception of the bank and sets the stage for deeper engagement down the line.
“They are going to remember how that bank made them feel,” Lele says. “Onboarding is just the starting point of a much much larger journey for the client. That journey extends into how you can use the onboarding process to guide and advise clients on all of the different capabilities that the bank is able to offer.”
