Insiders’ Secrets to Onboarding Success in Banking

What happens in the days and weeks after a consumer opens their new account or gets a loan can have a massive impact on long term profitability. Banking providers that cross-sell more products and services and grow their bottom line are those that engage with consumers from the start of the relationship. Here's what the experts say you need to build an effective onboarding strategy.

How banks and credit unions interact with consumers in the first few days, weeks and months after account opening is a combination of both art and science. On one hand, you want to automate and streamline the onboarding process to make it as efficient as possible. On the other hand, the most effective approach to onboarding requires a high level of personalization — tailoring the experience and customizing communications.

The Financial Brand asked the banking industry’s leading experts on onboarding to weigh in on the biggest challenges banks and credit unions face in developing an effective strategy (hint: data plays a huge role) and the yardstick financial marketers should use to measure success.

What are the biggest onboarding challenges facing banks and credit unions?

Jim Dellavilla, Chief Content Officer at Catalyst: It’s a combination of fragmented processes and poor collection and management of consumer data. Banks and credit unions continue to function in product silos and don’t do a good job of looking at each consumer relationship. Consumers want and expect that their banking provider will speak to them based on their relationship and specific financial needs. By not doing this, financial marketers significantly decrease the likelihood that they will grow new relationships.

Tim Keith, Partner and Chief Strategist at Infusion Marketing Group: Consumers don’t have the same financial needs, yet most financial institutions fail to use data to understand the needs of new consumers. This results in one-size-fits-all welcome letters. The communications aren’t relevant to each consumer.

Adam Craig, VP/Digital Engagement at Deluxe Financial Services: Developing an effective onboarding strategy is dependent on a number factors, but one of the greatest challenges is how financial marketers approach the problem from a user experience perspective. Whether it’s a result of operational silos, legacy banking systems, or failing to focus on the customer journey, banks and credit unions often miss the mark on user experience. Instead what we see most often are experiences that are undifferentiated — the same for every customer despite their demographics, tenure or intent. Product and service cross-sell are often afterthoughts in the user experience, and not dependent on data or personalization.

James Robert Lay, Founder and CEO of the Digital Growth Institute: What holds financial marketers back? Bad data, no data, and/or the lack of data analysis. These three things most hamper the growth opportunities that effective onboarding can provide. For example, the onboarding process should identify cross-sell opportunities based on a new account’s credit report to provide additional value based on third-party loans/credit cards. In addition, by analyzing account activity over a 6-12-month period, banks and credit unions can deliver additional value-based offers.

Laurie McLachlan, Chief Marketing Officer at Digital Onboarding: The main challenge is a lack of focus. It’s not that difficult to solve the problem, but for years banks and credit unions have been narrowly focused on growing transactions and rewarding executives simply for acquiring new accounts, regardless of whether they become profitable. When accounts get opened, institutions call it a “win” and move on to the next transaction. But the real payoff comes when financial marketers motivate new account holders to adopt additional account-related services that drive both engagement and long term profitability. They must shift their focus and energy to onboarding — this is the lowest hanging fruit at every bank and credit union.

Michael Browning, CEO at Onovative: The biggest challenge that most financial institutions face in maintaining an effective onboarding program is making sure it gets the priority and attention it deserves every day. If financial marketers don’t have daily processes in place that build strong relationships with their account holders, they will find it much harder to improve key metrics like churn and products per consumer. Fortunately, software that allows them to set up onboarding programs that can operate autonomously and provide the benefits that used to require manual work are available.

David Acevedo, SVP/National Sales Director at 360 View: The biggest challenge we see is automation — not having a tool to automate the onboarding program. Frequently these programs are done manually, and there is no means to create a complex process. Many institutions may only be able to do a 2×2 program. With the right tool, financial marketers can have a more potent program.

Emilee Guderyon, Account Executive at ImageWorks: Most often, the biggest challenges we see are with budget and time. Onboarding is an important strategy that starts earning returns quickly, but you need resources upfront to make sure your strategy is both effective and efficient.

What is one thing that banks and credit unions can do today to improve onboarding success?

Laurie McLachlan, Chief Marketing Officer at Digital Onboarding: Shift your culture from sales to satisfaction, and change compensation policies from transaction-based metrics to utilization or NPS-based metrics. Recognize that acquiring a new account earns you the right to either forge a profitable relationship… or to lose money. Profitable relationships aren’t acquired, they’re earned, and focusing on a more customer-centric onboarding strategy is one of the easiest ways for banks and credit unions to grow their balance sheet.

Adam Craig, VP/Digital Engagement at Deluxe Financial Services: Banks and credit unions should leverage best practice experiences from leading customer-centric organizations such as Apple, Starbucks and Uber as they think about onboarding. Consumers expect those experiences from any company they work with, including banks and credit unions. Investments in this area can pay huge dividends in terms of onboarding success, cross-sell, tenure and profitability.

James Robert Lay, Founder and CEO of the Digital Growth Institute: Onboarding must go beyond the traditional “welcome” and “check-in” messaging to include opportunities for new customers to rate their experience, gain early feedback, and gauge their feelings. During the “advocacy” period of the onboarding process, banks and credit unions must encourage, or even incentivize, new consumers who are happy to leave an Amazon-like rating or review about their experience on their website or social channels like Facebook, Google Places or Yelp to positively influence other buyers in the consideration stage of their buying journey. Consider paying out $100 each to both the referral and referrer to fuel continued future growth as people trust their friends and family more than they will ever trust a financial brand.

David Acevedo, SVP/National Sales Director at 360 View: Start measuring and reporting on your results so you can continuously improve your process. You need to be able to monitor and make changes quickly based on real data. Having an automation tool will help you to make these changes quickly. Also, if you set a plan in place, follow through with it. It’s easy to drop the ball and not complete what you set out to do due to time or budget constraints, but you can’t measure and improve what you did not do.

Michael Browning, CEO at Onovative: Make sure the entire organization understands how important it is to prioritize an onboarding program, and how the existence of that program relates to the institution’s ability to grow. Without effective communication, every relationship deteriorates. The connection between an institution and its account holders is no different.

Emilee Guderyon, Account Executive at ImageWorks: Get to know your consumers. Each financial institution is different, so make sure you know how to communicate efficiently and consistently. Just because one financial institution is having success with a program does not mean yours will – onboarding programs should be specialized to your bank or credit union.

Tim Keith, Partner and Chief Strategist at Infusion Marketing Group: Segment and sequence to answer the key question “What is the most financially relevant thing is I can say to this customer at this particular point in time?”

Jim Dellavilla, Chief Content Officer at Catalyst: Do an objective evaluation of your current process with the intent and willingness to make changes to improve the process. Map the entire onboarding process and experience from the consumer perspective. This process is only valuable if those involved start with no limitations. Those organizations that do this correctly will see a significant increase in depth of consumer relationship and will also have more satisfied consumers.

What are the critical KPIs banks and credit unions should use to measure onboarding success?

Elyse Richmann, Professional Services Manager at 360 View: Banks and credit unions should focus on success measurement for each touchpoint by defining what is successful, the ROI, new consumer retention and cross sell and product usage. Instead of simply tracking products sold, it’s much better to track the usage of that product.

Adam Craig, VP/Digital Engagement at Deluxe Financial Services: Some banks and credit unions measure onboarding results, but it’s generally a backward view of what happened historically, and not measured against goals or targets. One of the reasons for this is that most banks and credit unions don’t have anyone who has goals and objectives tied to onboarding success…generally, there is no one at the bank who is responsible for onboarding.

James Robert Lay, Founder and CEO of the Digital Growth Institute: It is best to view onboarding as a set of steps or processes with each step having distinct KPIs. For example, at a high-level, KPIs include activities such as email send volume along with open and click-through rates for onboarding emails. It is also possible to measure outgoing call volume along with trends of call activity — talk to vs. left a message. There is also an opportunity for almost all banks and credit unions to increase emotional intelligence by measuring the feelings and emotions of new consumers as part of the onboarding process. This goes beyond measuring NPS, which is nothing more than a vanity metric, by making ratings, reviews and referrals part of the onboarding process and experience. As a result, banks and credit unions can head off trouble if they find their new relationships are lukewarm at best.

Jim Dellavilla, Chief Content Officer at Catalyst: The most important KPIs focus on account and relationship growth, including number of accounts and services and balance size. Most banks and credit unions do a poor job of accurately tracking from initial account to year over year relationship growth. Those that do track these accurately now can forecast potential future growth as well as likely attrition.

Laurie McLachlan, Chief Marketing Officer at Digital Onboarding: While institutions might know that it costs $300 or more to acquire a new checking account, many cannot immediately report on the profitability of their relationships over the longer term or even performance on the account activation metrics that lead to lifetime profitability such as online banking adoption, debit card usage, and direct deposit enrollment rates. Institutions should track not only adoption rates but also the speed of adoption. If a consumer actively uses a checking account, it is very likely he or she will go to that financial institution for future needs.

Michael Browning, CEO at Onovative: Metrics like churn, which is the percentage of consumers that stop using a product within a given timeframe, are more critical than traditional KPIs. Also track how happy each consumer is with their relationship to the institution. Surveys sent after account opening provide excellent information on how your account opening process is succeeding. Producing something like a global Net Promoter Score is valuable. However, we think the best way to use questions like, “How likely would you be to recommend us?” and use the response as a gating mechanism to put them in a different communication plan.

Emilee Guderyon, Account Executive at ImageWorks: Banks and credit unions should be measuring what the value of a new consumer becomes to them. The main point of onboarding is to cross sell, so financial marketers must be tracking the additional products and services opening in the first 90 days and putting a value on that to easily measure KPIs and ROI.

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