The Campaign for Community Banking Services recently reported that bank branch closures are at an all time high this year. Those that remain face mounting pressure from disruptors like virtual currencies, digital banks, digital financial advisors and peer-to-peer
lending advisors, not to mention the challenges they face in trying to remain compliant. This isn’t helped by outdated processes and weak IT infrastructure that makes both supporting customer demand and getting new customers onto systems a real struggle.
Whenever you onboard a new customer or add a new product to an existing customer, this creates an impression. If this onboarding process isn’t done well, then this can lead to all sorts of issues, including the customer not going through with the application
process, the bank being at risk of regulatory fines and, ultimately, damage to reputation.
According to the results of a new global client onboarding survey from Forrester, over 64% percent of banks report lost deals and revenue due to problems in the current onboarding process with more than 20 percent of respondents indicating they’ve lost
between 26 and 50 percent of new business opportunities as a result of issues during onboarding.
What’s more, the report highlights the negative impact current onboarding processes have on overall customer experience at global banks. These are driven by processes that take too long and do not provide a comprehensive view of the process for the customer.
Nearly nine out of ten survey respondents believe the onboarding process impacts lifetime customer value. In fact, the study finds all phases of the onboarding process are riddled with manual workarounds and lack basic workflow automation. When it comes to
customers dropping out of the process, many banks put this down to speed of credit decision.
We’re in the age of the connected customer and this has put pressure on banks to update their onboarding initiatives. The customer experience is a collective interaction that includes more than just the customer service department. Claims, order fulfilment,
payments, as well as other back-office functions also impact the customer’s interactions with an organisation. While many banks responding to the survey indicated that “client centric” onboarding is a goal, they also acknowledged customer experience to be
their top challenge. Banks state that the Know Your Customer (KYC) initiatives and related processes are the main pain point for customers and banks today.
The study indicates that banks “need to develop optimal future-state business architecture, focusing on those services that deliver value to customers, and then organise end-to-end processes that reach the back-office systems.”To execute on this vision,
many banks will need to address digital innovation improvements required to move beyond spreadsheets, ad hoc email communication, and sticky notes that are still used to keep track of relationships that may be worth millions of pounds.
Anything less than a flawless onboarding experience puts banks at risk to lose clients and future business. It also puts banks at risk for regulatory fines and brand damage. Banks need to address the technological divide that exists between how they have
traditionally done things and the need for digitalisation that will provide them with greater transparency and process efficiency while at the same time providing a platform to wow the customer.