Successful digital onboarding is not just about enabling a customer to sign up for an account through a mobile phone in 5 minutes. What if the customer is forced into a cumbersome verification process after sign up? What if the customer needs advice on the best account that suits her or his needs or is confused about the details of a loan? If the process is inconvenient or little or no guidance is provided, the onboarding often goes into a state of limbo or is abandoned altogether.

In the often intangible and complex world of financial products, banks must reexamine ‘point of purchase finance’ by going beyond digital sign up and focusing on the entire onboarding and originations journey. Customers must be offered personalized and contextual advice and guidance whenever needed. Successful onboarding also requires an easy and streamlined process right through. Banks that can provide this enhanced experience throughout the entire onboarding process can prevent abandonment and outperform competitors.

Abandoned Opportunity

Onboarding and originations are one of the most important processes in banking and are a key driver of customer satisfaction and revenue growth. According to McKinsey, there are typically fifteen or so journeys that matter most to customer satisfaction which include account opening, mortgage applications, customer onboarding and debit and credit card applications.

The importance of onboarding and originations has driven significant investments in improving the way customers sign up for financial products and services. Banks have tapped new channels and user friendly processes to enable unprecedented ease in registering or signing up for a product or a service through simple processes that capture information, documentation and biometrics.

However, abandonment during the onboarding and originations process continues to plague the banking industry. According to research by 11FS and Signicat, 63% of consumers in Europe have abandoned a digital application to a bank in the past year, up from 40% in 2019. Key reasons attributed to the increase include lengthy processes and too much information required. Significantly, a lack of clarity and advice, especially for more complex products is also cited as an important driver of abandonment according to research from Oliver Wyman.

Onboarding Success

It is clear that the two key customer requirements for successful onboarding and originations are:

• Convenient, simple and easy onboarding and originations processes
• Personalized guidance and advice on products and services

Successful digital onboarding therefore requires a two pronged strategy. The process must be short and simple. And the experience must be personalized with contextual advice and guidance provided whenever needed. The key to implementing this strategy at scale across the banking enterprise is by investing in capabilities that:

1. Enable customers to onboard themselves whenever and wherever they want.
2. Enable bankers to provide relevant advice and guidance and enhance assisted engagement.

Needless to say, digital self-service has been a top priority for a while. A lot of resources have been invested in enabling customers to initiate and the onboarding process with augmented self-service channels that maximize customer convenience. Onboarding self-service processes and UI are increasingly simple, intuitive and convenient. For example, customers today initiate the onboarding process from multiple digital channels and third party touch points.

However, there is scope for further streamlining of processes. Post sign up, customers must not be burdened with cumbersome requests. The same information must not be requested for multiple times. For example a customer is asked to enter his address into a form and is again asked to upload a document which proves it. Instead, customers should be asked to upload documents just once and all possible information is automatically extracted from the documents, saving time and effort.

Engagement Focus

While a lot of focus and investment in onboarding and originations continues to enable better customer self-service, there is a strong need to invest in delivering better and more personalized advice and guidance in the onboarding and originations process. Many banking products and services have complex structures and significant financial implications. Customers want and expect advice and guidance on what products and services are best suited to their needs and goals and are willing to switch if they don’t receive it. A lack of focus and investment in this critical aspect of onboarding and originations often leads to confused and dissatisfied customers who then abandon the onboarding journey.

This need for better advice and guidance presents a huge opportunity for banks to differentiate customer engagement and improve the overall customer experience. Assisted engagement can also help banks establish competitive advantages over pure play digital banks. Meaningful guidance and relevant and contextual advice establish a much needed personal touch and sets the stage for a stronger bank – customer relationship.

Enhanced customer engagement can significantly decrease abandonment and prevent hidden defection. Hidden defection is when a customer purchases an additional banking product from a competitor and can be as high as 49% of additional products bought, according to research by Bain. It also establishes a critical base on which bankers can cross and up sell of products, increase the lifetime value of a customer and ultimately drive revenue growth.

It is critical for banks to ramp up investments in capabilities that drive an enhanced assisted onboarding experience. The onboarding process must have an option where customers just need to express interest in a particular product and the bank then takes the lead in driving the onboarding. New capabilities can help bankers understand each customer on an individual basis and provide them with the best advice and guidance that suits their needs and circumstances.

• Insights: Next generation analytics and insights are critical to scaling the ability of bankers to understand every customer at a personal level. Complete customer 360 degree views of the customer that also extend beyond the individual to include households and families, help bankers understand customers better and enable them to provide better advice and guidance. Additionally, embedded next generation capabilities like machine learning algorithms can unlock new insights from data and generate predictions and insights. Machine Learning can categorize customer profiles with certain behavioral characteristics into clusters, predict a more accurate lifetime value of a customer and suggest the next best product to be offered to a customer.
• Experience: Easy to manage product catalogues enable bankers to easily explain the intricacies of a particular product and advise and guide customers on what would be best suited to their needs and wants. Systems must allow for easy creation of product bundles to improve cross and up sell relevant products. Capabilities that ensure the capture of information and data only once and not repeated during the process enhance the experience and speed of onboarding significantly for both customer and banker. Flexible and easy to configure workflows help design optimized onboarding and origination experiences for both customers and bankers.   

Streamlined processes and enhanced engagement driven by new insights and resources can transform the entire onboarding and originations journey. By re-examining ‘point of purchase finance’ and focusing on the entire onboarding journey, banks can minimize costly abandonment and improve customer stickiness, setting the stage for a value driven relationship between customer and bank.