Embrace the future of customer onboarding in banking

Just two years back, very few could have envisioned the radical transformation that the banking sector has undergone today. The formerly conservative industry that was cautiously embracing digital technology was thrust into adapting a digital-first mindset to sustain the changing norms under COVID-19. From customer acquisition to customer interaction to re-defining sales models, a new game plan is being laid out in all aspects of banking operations to remain relevant. If you think these disruptions are just interim, you are still living in a bubble. These disruptions set the tone for an inevitable future predominated by two major factors: digitalization and customer-centricity.

That brings me to my final blog in the series of ‘digital customer onboarding in banking.

In the last few blogs (Blog 1, Blog 2, Blog3), we primarily looked through traditional banks’ lenses and highlighted the different strategies they should embrace to transition to the digital onboarding process.  In this blog, our focus is on the future of digital onboarding, keeping the digital customers and their ever-changing expectations in mind.

What will the future of onboarding look like? 

The post-Covid 19 way of life amalgamated with digital disruptions redefines the future for banking as it is for all other industries. Some of the most obvious trends include:

Reduced physical footprint: Mckinsey’s study shows that the use of online and mobile banking channels across countries has increased by an estimated 20 to 50 percent in the first few months of the COVID-19 pandemic. Between 15 and 45 percent of consumers expect to cut back on branch visits following the end of the crisis. Digital onboarding, therefore, no longer remains a choice but is emerging as an imperative in the future.

Replace personal relationships with digital innovation: Transitioning human to human relationships with a customer from the physical to the digital world is no easy feat. The Googles and Amazons of the world are continuously upping the ante with innovative solutions that make the customers comfortable and enable them to explore options that they could not even imagine. The banking industry cannot deny the same level of convenience to their customers at every touchpoint, not to mention the starting point of their journey during the onboarding process.

End to end and real-time digitalization: Onboarding can no longer remain fragmented. It has to be a seamless experience for customers across all digital platforms with well-connected channels and backend processes. Decision-making and approvals should be near real-time, ensuring instant onboarding without any time loss.

Increased use of AI technologies: AI will be ingrained as a core part of banking strategy. Today, the most commonly used AI technologies in customer onboarding include robotic process automation for structured operational tasks and conversational interfaces for customer service divisions. Future banks will potentially augment other AI capabilities, including natural-language processing, computer-vision techniques, AI agents and bots, and augmented or virtual reality in their core business processes. Optimally exploited AI technologies will accelerate the innovation cycle, enable higher efficiency and higher profit margins.

Embedded analytics:  A well-rounded digital stack cannot be complete without analytics. Analytics should be deeply embedded across the entire customer onboarding journey. It brings forth the priorities, deficiencies, exceptions, and approval requirements instantly, giving valuable insights to make the whole process much smoother.

To embrace the future, banks need to build a comprehensive digital framework keeping these trends in mind. Below are some of the key determining factors towards creating a seamless onboarding process for the ‘future banks.’

Customer experience:

A smooth onboarding process to a customer means fast, full transparency, control, and real-time banking. To achieve it, banks should consider customer centricity as the foundation while designing their digital interface. There are different layers of design that need to be considered to create a coherent customer experience.

• Device agnostic, 100% mobile: The fundamental of an improved customer experience starts with easy accessibility across all devices, particularly mobile. All onboarding processes should be 100% mobile-based that enables anytime, anywhere, access to customers. Global smartphone penetration is likely to grow from 78% in 2022 to 92% in 2025. That said, it should also be device agnostic and interoperable between devices so that the customer has the freedom to start the onboarding process in one device and finish it in another one.
• Intelligent automation on behalf of the customer: The next rudiment of a smooth CX is to reduce the time and effort of customers through intelligent automation. Simple steps like applying Optical Character Recognition (OCR) for automated data entry or auto-save and resume features significantly reduces onboarding time and make it effortless for customers.
• New normal in KYC: The success of digital KYC solutions is making the traditional process of physical or postal verifications redundant. Biometric-driven KYC will continue to gain prominence. According to a CACI study, 81% consider fingerprint authentication as the most preferred method, followed by iris scan (76%). Video identification though still nascent, will increasingly gain momentum as the remote operation due to COVID 19 measures continue to be the new norm. Blockchain-based KYC verification is yet another area that holds big potential for the future. The regulators across the world are evolving the KYC regulations and the guidelines to ease out the digital KYC solutions, and this shall be a leapfrog for the Banking and financial industry efficiency.
• Easy assistance: With remote operations being the new normal, the increased pressure on call centres will be taken off the edge with assisted / virtual channels. Channels such as chatbots, agent-chats will be more prevalent, empowering customers towards self-resolution. However, banks should circumspectly choose between self-service channels vs. human assistance, to avoid unnecessary frictions and disruption in resolving issues and ensuring seamless customer experience.
• Digitalizing Consent options: In an end-to-end digital onboarding process, banks need to instantly rethink their strategy to obtain legally binding customer consent and approvals. eSignature is a smart way to receive quick consent in contrast to the traditional approach of download, print, sign and uploading consent forms. Additionally, with Open Banking mandates as observed in a few jurisdictions, digital identity can be acquired as a service based on end-user consent (eIDAS certificates); this will be a sure gamechanger.
• Personalized offerings: Customer propositions can no longer be static and one-size-fits-all. With AI-powered technologies, banks get valuable insights to provide intelligent and tailored services and offerings that can create a paradigm shift to the whole customer experience.

Digital sales channel:

With digitalization being established as the future of banking, entire customer service life cycle also needs to be digitized giving more precedence to digital sales channels in lieu of traditional ones. Banks need to reimagine each step of the customer lifecycle journey in the digital landscape to address their needs through different sales channels.

Moving away from traditional channels to new channel experience:

From traditional hotlines to self-service to digital assistants

The traditional hotlines or contact centers meant to address customer queries, resolve issues, or register their complaints will increasingly be replaced with AI-driven technologies. Self-service channels or digital assistants, designed as human- like formats reduce cost-to serve, but also empower customers to resolve specific issues by themselves.

Thrusting push marketing vs. Giving control to customers

Banks typically send push notifications and emails to update customers on new product offerings, schemes, etc. However, flooding of push marketing efforts without personalization causes frustrations among customers and sometimes leads to completely blocking it off. The future path is to empower customers to gain greater control of the type of notifications or emails they would like to receive through proactive in-app messaging that provides in-context insights instead of flooding their inboxes.

Rethinking physical contact centers:

With the lockdown in force, many traditional banks are rejigging their branch locations by reducing the number of locations or increasing their partner location footprints. Few digital banks do not even have any physical location. This trend is likely to continue in the future. Banks will continue to optimize the few open locations and focus on re-skilling employees to target experiential customer needs.

The increasing prominence of new channels:

Digitalization opened its gate to a whole set of new channels, which will continue to be the driving agents in the future. Like chatbots, some of these are intended to empower customers to self-resolve problems. Others like Live-agent chats aid hotline agents with AI-driven context-sensitive information, reducing their time to search response. Others, such as In-app voice calls, enable seamless conversation flow from AI-driven chat to hotline agents without repeated authentication. The Video KYC process also holds great potential for the future.

Besides digital technology, banks are also tapping into social media for account servicing or information dissemination. Community forums are likely to become more popular as a medium to share feedback or ideas or even promote community engagement in banking.

Besides partner locations, the trend to tap into partner ecosystems and platforms will also rise. Making specific banking services available at other channel platforms ensures higher customer engagement and usage. ICICI Bank in India, for example, embedded basic banking services on WhatsApp and scaled up to one million users within three months of launch.

Unified channel experience

As we have seen above, customer onboarding has evolved into a multichannel experience. If these channels are trapped in silos, they will fail to provide customers a single source of truth and cause frequent disruption in customer experience leading to high error rates, poor refresh rates, and hard to access. All offline and online channels and apps should be integrated into a single/unified channel for customers that is accessible from all devices. This will also help banks be more cost-effective and scalable and improve analytical capabilities across the customer life cycle.

Scalability of IT processes:

While digital onboarding may appear as a customer-facing front-end process, but for digital technologies to reach their full potential and make onboarding seamless, banks need to embrace a full-scale transformation of IT processes.

Today, fragmented IT infrastructure and processes stand as the biggest hurdle towards digitalization. The complex legacy systems at the back end come in direct conflict with modern digital technologies. While most banks find a way to optimize their front-end mobile and online banking platforms to enhance interface experience, the core backend infrastructure remains starved for modernization, impeding digital transformation to unfold its full potential. This increasing gap results in patchwork at the backend, which in the long run not only threats innovation but increases the likelihood of the entire system crumbling altogether.

Analytics:

Customer centricity as the core of digital offering can only be successful if analytics forms an integral part of the complete customer’s journey, starting right from the onboarding process. From obtaining real-time information of the customer’s journey from different channels to performing sentiment analyses based on consumer behavior, product recommendations, and personalized service, analytics deliver a 360-degree view of the customer’s journey and identify pitfalls at every stage. While metrics such as conversion rates, click paths, abort rates will continue to be the key performance indicators for analytics; the real-time data will increasingly be used to create customer profiles for effective services and even control sales.

The above factors are strategic imperatives for banks to be future-ready, though they can be customized depending on their market position, size, and customer base. Banks need not build all capabilities by themselves. Lack of talent or a risk-taking or investment appetite may prevent the full-scale transition.

Partnering with a technology specialist will give banks a freehand to build a platform by exploring, testing, and refining applications to assess the potential risks and subsequently decide which technologies to deploy at scale. So, what’s your hold up to be future-ready!!

Reimagine how you deliver value when onboarding banking prospects with a single digital platform, explore our services more.

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• BFSI