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How do you build a Robust Customer Onboarding and Origination Strategy?

Modern technology and digital behaviors have conspired to create a new generation of banking customers where easy has become the new loyal. Customers get that first impression about your bank during the onboarding process. This even plays a vital role in growing revenue. When customers realize the speed and convenience you operate during the onboarding process, they are likely to stay with you for a longer period. This is particularly true for the millennial segment aged 18-35.
If you are in the mindset of introducing a new digital onboarding and origination solution, here are a few questions you need to ask yourself, even before you start charting down the digital capabilities and functionalities.


What is the first year customer attrition rate in your bank?

 
An average of 20% to 40% is the average rate for top 100 banks. Here are some reasons your customers might leave you during an early stage:

 

  • Not explaining how your product/service works
  • Setting the wrong expectation of what the product/service does
  • Not giving them a reason to use the product/service frequently
  • Not explaining the real value


One of the commonly seen methods in the market that banks have started to provide is an in-built questionnaire that provides personalized recommendations based on age, financial preferences and many more attributes. Your customers will tell you this if you ask them. For example, 'What's the #1 outcome you need to achieve in our first interaction?' is a great opening question. Compose and analyze information provided by the new customer and recommend a set of products that is customized for them. This can further drill down to show actual information and comparison charts between other products and services instilling the trust factor that this is truly the right product for them.


What is the cost of acquiring a new customer?

 
Banks invest from as little as hundred dollars to 20,000 dollars for each customer, they onboard. To reduce acquisition costs, going digital is the most economical solution of all. Start with processes that require your customer to deliver or mail paper forms. Reduce the cost of onboarding significantly by introducing these procedures via a mobile and a desktop– the experience has to be continuous in such a way that a customer can start this procedure on a mobile phone at the coffee table and finish onboarding on a laptop at work (at their own convenience). Being simple to use is critical when it comes to acquiring a new customer.


What is the average time it takes to onboard a new customer?

 
Usually, the customer onboarding process takes a few days to even a few weeks. When the onboarding is confusing and takes too long, your customers will start looking for alternates in a jiffy. Insufficient insights and siloed customer data are major challenges banks face as they seek to improve their onboarding strategy. Being consistently present at multi-channels and an effort to avoid asking repetitive questions, can help customers view this as a single process. Also, the need to eliminate broken/disconnected processes and provide transparency in terms of the number of steps and documents required must be mentioned upfront. The key here is to fasten the activation and get a new customer to deposit money in the account, use a card or set up a direct deposit.


Where do customers begin to onboard from?


Flexibility must become the norm for banks to rebuild their new digital models. Offering to onboard customers via web, mobile, in-person or a call center can help improve overall satisfaction. Whatever the channel mix may be, the end goal is for the customer to sign up with the bank in a frictionless manner. In order to deliver a customer-first experience, a bank must clearly identify the key areas of friction using highly granular customer insights and deliver personalized onboarding communications based on customer needs at every relevant step.


Where do customers complete onboarding?


Ultimately, an effective onboarding strategy should be centered on an integrated, well organized, user journey flow that is more customer-centric than product-driven. What comes after onboarding? Instant online banking credentials? A new virtual debit card? Make sure getting to the next step is as seamless as your onboarding process. Drafting a set of adjoining integration services between your internet banking solution and customer onboarding solution adds value to the overall experience.


Success lies in setting your bank apart with advanced onboarding functions like mobile-enabled digital processing and the ability to gain insights into real-time customer data. Basically, when it comes to customer onboarding, you show them how easy it is to do business with your bank, that way the likelihood that they will join your bank is reinforced. 

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Comments: (5)

Ambrish Parmar
Blog group founder
Ambrish Parmar - Thought leader and Start-up Advisor - London 09 August, 2018, 13:25Be the first to give this comment the thumbs up 0 likes

Hi,

Thank you for posting this informative / insightful post to this group. 

I would be interested in your view in respect to colleague ('CX') and user experience ('UX'). Many thanks, Ambrish

A Finextra member
A Finextra member 10 August, 2018, 06:17Be the first to give this comment the thumbs up 0 likes

Thanks for reading Ambrish! Will try to put something together on the UX and CX front soon in my next blog. 

Ambrish Parmar
Blog group founder
Ambrish Parmar - Thought leader and Start-up Advisor - London 10 August, 2018, 11:32Be the first to give this comment the thumbs up 0 likes

Great,  I look forward to reading your next blog. Ambrish

A Finextra member
A Finextra member 13 August, 2018, 16:26Be the first to give this comment the thumbs up 0 likes

Hi Malvika, Nice article. Recently i had an onboarding experience with a bank in india, they had all the docs needed to open the account and also provided the initial deposit. The process to activate and have the balance available took way too long given this age of advance tech. I think the there were serious issues with the process. Simple matters should be kept simple and not be over complicated.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 13 August, 2018, 19:01Be the first to give this comment the thumbs up 0 likes

"An average of 20% to 40% is the average rate for top 100 banks." "Banks invest from as little as hundred dollars to 20,000 dollars for each customer, they onboard." Can you cite the sources for these claims? 

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This post is from a series of posts in the group:

Banking Strategy, Digital and Transformation

Latest thinking in respect to Banking Strategy, Digital and Transformation. Harnessing our collective wisdom to make banking better. Ambrish Parmar


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