New Customer Onboarding in Banking

Katherine Manning January 20, 2022 Banking

customer onboarding in banking

A new customer onboarding process is a highly effective way to strengthen relationships. If your bank or credit union does not have a well-defined onboarding procedure, it misses significant growth opportunities.

Break down the traditional customer onboarding strategy

If your bank or credit union has a well-defined onboarding process, it misses enormous growth opportunities. It is a widespread but false belief that contacting new account holders too frequently can irritate them and push them to quit your organization. Receiving irrelevant communications adds to the customer’s annoyance.

This process includes Know Your Customer (KYC) procedures, data collecting, identification checks, document collection, and, on occasion, face-to-face interviews with prospective clients. The onboarding process must be completed before a new client may open an account or conduct business with the bank. Banks must adhere to onboarding regulations while making the process as pleasant as possible for users.

Previously, several forms had to be completed, documents submitted, manual compliance checks completed by hand, and face-to-face identification checks conducted at branch offices. Even though advances in technology, such as online form completion, have simplified this process in recent years, it remains a lengthy process.

Procedures and touchpoints for onboarding in banking are highly disjointed

Globalization and stronger regulatory laws have shifted the emphasis away from customer experience and toward institution protection, resulting in several points of contact, complicated procedures, and frequent consumer questions about the same topics.

Unfortunately, many banks lose a sizable proportion of corporate clients due to onboarding challenges. To begin unraveling the tactics that tend to sabotage your efforts to improve customer experiences, you must first identify the root of consumer dissatisfaction.

For instance, commercial clients need an effortless onboarding process to feel heard and understood. On the other hand, traditional banks are frequently hampered by outmoded back-end operations.

Study how new customers perceive your onboarding process

Is it necessary for new accounts to be created in person? Today’s business clients want to begin transactions with you whenever it is convenient for them, whether online or in person.

Your departments may be submitting an abnormally high volume of data requests. However, you will lose consumers if you require them to repeat information they have already provided to your bank.

Have you considered that perhaps you’re attempting cross-selling before determining your consumers’ identities? A client is more than a name and a picture on a wall. It’s no longer profitable to market services that are irrelevant to your clients in today’s digital-first world.

Further, client interface issues are only a symptom of underlying operational issues. It is crucial to begin rethinking how your teams operate by examining why you are encountering onboarding process difficulties.

When a new client joins a financial institution or bank, numerous departments, including credit, operations, compliance, legal, front-office risk, and tax, must collaborate to ensure everyone is on the same page. According to Forrester Consulting, onboarding new clients utilizing inadequate onboarding solutions that focus exclusively on the most fundamental process components can take two and twelve weeks. Consider the challenges banks currently encounter with new client onboarding.

New customer onboarding can be too time consuming

Onboarding a new customer requires time and a great deal of documentation, and there are multiple contact points along the process. The true challenge for banks is manually keeping these papers without errors after they are received. Consider a bank with three divisions: Retail, commercial, and insurance. Individuals or businesses may become customers in any of the three categories. Three times, the consumer would have to go through the onboarding process.

Banking regulations are amended often

Banks are frequently, if not regularly, subject to new limitations. As a result, banks must keep their systems current to comply with the requirements. Any changes must be communicated to customers, and updates must be made throughout the onboarding process. Also, banks must examine their current systems and practices due to an evolving regulatory landscape.

Services for mobile banking are highly popular

Thanks to banks and financial institutions adoption of cutting-edge technology, customers of banks and financial institutions are increasingly expecting all services to be provided in real-time. Due to the epidemic of COVID-19, the average customer no longer visits a bank and expects to manage all of their financial needs through a smartphone. On the other hand, many banks rely on archaic technology, making it challenging to provide their clients with seamless digital experiences. Each connection with a consumer is critical in today’s competitive market since it aids in creating a lasting impression.

In the future, customer onboarding will be automated

Financial institutions and banks rely on cutting-edge technology to boost their efficiency and address the issues mentioned above. It enables them to accomplish two objectives concurrently, as they may satisfy regulatory requirements while also offering a seamless experience to their consumers. As we go toward open banking, we may see more of these kinds of onboarding activities.

The future of new customer onboarding

All client interactions should be based on a single repository of customer data. For the customer’s data to be imported automatically, a single source must be connected to all apps. Thus, the front and back offices can benefit from an automated process that avoids data duplication, ensures data integrity, and corrects data irregularities.  

Validation, due diligence, identification, operations, regulation, and compliance all rely on precise definitions of data points. Banks must agree on essential data points for commercial customer documentation. In addition, all customer attributes must be handled appropriately, and risk profiles must be separated from general, transactional, and business information. Both the bank and its customers benefit significantly from this method of onboarding.

Picture a more effective approach to onboarding in banking

It is critical to have a well-defined and rigorous procedure to give excellent customer service. To avoid misunderstanding and inefficiency, the onboarding process should be tailored to the specific needs of the new hires. Standardization is necessary for global financial institutions that service international corporations. Using a global model augmented by local versions, the onboarding team’s productivity and compliance risk may decrease. 

For example, a comprehensive approach to onboarding necessitates a rationalization of the current application ecosystem. No matter how many channels a company has available to communicate with customers, it is critical to avoid duplicating tasks throughout onboarding applications. Additionally, the bank’s application portfolio strategy must be clearly defined and tied to the application’s adoption goals.

Customer onboarding should become an example of an automated use case. To illustrate, banks collect the essential information and check the appropriate boxes to qualify new customer applications. Hence, intelligent automation can aid in the seamless onboarding of new clients. Imagine automating new commercial accounts, and having the ability to use a 360-degree dashboard to monitor multiple new client onboarding processes.

Also, different systems and processes can be connected via automated systems and processes. Only the bare essentials should be required, and the remainder of the registration form should be completed. When the following interaction with a consumer is necessary, bots may inform them and initiate dialogue.

On the other hand, intelligent process automation provides several advantages and speed. Several other benefits include the following:

  • As a result of increased regulatory compliance, banks can reduce penalties significantly.
  • Improved service results in increased client satisfaction and loyalty.
  • Augment the accuracy of data collection techniques to prevent repeating phases in a process.
  • Enhanced onboarding process analysis assists in identifying and removing previously unnoticed workflow issues.
  • Banks have the option to focus on other objectives while remaining competitive and profitable during a period of slowing banking growth and new difficulties by automating crucial customer onboarding procedures.

To summarize

By automating new customer onboarding processes, banks may facilitate the process of creating long-term relationships with clients. Consequently, they will be better equipped to deal with a variety of new business and technological challenges, enabling them to remain competitive today and long into the future.

Request a Demo

    Consent to the Privacy Policy By checking this box you consent to ProcessMaker's Privacy Statement.



    Privacy Update
    We use cookies to make interactions with our website and services easy and meaningful. Cookies help us better understand how our website is used and tailor advertising accordingly.

    Accept