| “More and more, customers expect the levels of satisfaction they receive from leaders such as Amazon, Apple, and Google – and they expect this from even the sleepiest corners of markets across all industries. Meanwhile, leading service providers also differentiate themselves through technology. Advanced analytics gives them rapid customer insights, so they can move with unprecedented speed and agility.”
– McKinsey |
Account Opening is the first point of interaction between a customer and their bank. It plays a decisive role in defining your brand. This interaction has the potential to ‘make or break’ the relationship. And, if executed strategically, it has the potential to be a brand differentiator!
Unfortunately, banks often do not realize the relevance of account opening in shaping customer relationships and the brand. According to The Financial Brand – “Today’s online account opening enrolment process must change. Abandonment rates are ridiculous – 40% or more, according to reports. Opening an account through the digital channel can often take more than 15 minutes, which simply doesn’t cut it for today’s consumer who won’t settle for anything other than a simple, streamlined digital experience.”
Many banks still treat online account opening as a process and not as an organization-wide, brand-defining strategy. Moreover, in many banks, the online channel is patched on to existing processes that were designed for branch- based and human interaction-driven scenarios.
Ironically, far from delighting customers, this results in substandard customer experiences and soaring customer abandonment rates. What many banks fail to gauge is that online behaviors require a different technological approach and the ability to carry context through the process digitally, without manual intervention.
In this article, we will discuss how banks can leverage online account opening to strengthen customer relationships and use it as a brand- defining strategy. We will dwell on the potential areas of improvement and the requisite technological capabilities that make online account opening truly ‘Digital’ and ‘Customer Centric’!
Table of Contents
Multi-channel Initiation – Freedom to Customer!
Anytime, Anywhere, Anyhow
| “A true omni-channel experience requires that you seamlessly integrate experience across various channels – social, mobile, web, or even at the branch. All interactions encompassing the account opening process, from lead response to funds deposition, must constitute a single unified experience across channels.” – Taming Abandonment in Online Account Opening, Newgen Software |
Many organizations consider social media integration and mobility as a means to improve their reach and enhance customer experience. While this is true if done well, usually it isn’t the technology used, rather the way these channels are integrated into the process that amounts to a delightful on- boarding experience. The ability to seamlessly apply for accounts through any channel available is essential. However, you must select the channel best suited for a given situation; be it mobile, web, social media platforms, SMS or email.
Further, customers should have the freedom to express their interest through any social media platform of their choice. They should be able to apply through mobile, capture details with a phone’s camera, complete the application on the web if convenient, and go back to mobile if required. The ability to save and resume in a cross- channel manner is imperative for a digital account opening process.
Agile Service Delivery – Account Opening in Minutes?
Reaching Customers Faster
Online Account Opening can be a complex and time- consuming process if handled manually. The lack of an integrated application process with straight- through processing affects speed and introduces inaccuracies and leakages. An ideal online account opening process takes only a few minutes. There are ample straight through processing opportunities that can be harnessed for a smooth on-boarding. Organisations must leverage the requisite technologies that allow for orchestration at the process level. They must support the ability to model and design the process. And, integrate with other backend and external applications for background verifications, cross-sell offers, identity management, document management and funding.
Further, an integrated business rules management system and a seamlessly integrated content management system play a crucial role. Straight through processing introduces automated tasks and processes in place of manual ones; thereby, liberating employees to unlock better productivity
Intelligent Assistance – Since You Know Your Customers!
Speaking to Customers in Their Own Language
Millennial customers expect more than just anytime- anywhere access. They expect omni-channel and intuitive interactions, personalized treatment and real-time delivery; sans errors. An online account opening technology capable of offering intelligent assistance leveraging digital sensing is an imperative to this end.
It should offer pre-population of form data from KYC documents and thorough integration with social media. It should offer automated AML, fraud and credit checks, along with the ability to save the application intermittently and continue later, on a different channel.
If they already hold an account in the organization in any of the businesses, it helps to pre-fill the information and assist with the requisite context. Further, any document linked to an existing account should be presented in the newly created context.
Once the context has been created, including the customer information and the relevant documents (identification proofs, signature specimen and so on), then the system should continue to hold them and make them available throughout the process.
Exception & Case Handling – Reducing Abandonment
Ensuring a Seamless Experience
Most cases of customer abandonment happen when the process encounters exceptions. Effective handling and speedy redressal of these is the key to taming customer abandonment. These scenarios may arise due to incomplete documents, inadequate qualification, or inaccurate data. While banks can automate most of these into business rules, some of these require expert intervention and swift decision making. Subject matter experts need to be involved timely and provided with contextual information so as to enable fast, consistent and correct decision making.
Exception handling is about knowledge worker empowerment, ad-hoc routing, and flexible processes. The ability to carry corresponding documents & media items, such as photographs, scanned copies, signatures through the process offers a significant advantage. Further, the delivery of timely customer communication throughout the process is imperative to keep the customer informed about the status as well as additional requirements of exceptional situations.
Effective Communication to Cross Sell- Offering ‘Sticky’ Products
Offering Targeted, Relevant and Useful Products
| According to a study of 8 large U.S. banks by BAI Research and MarkTech Systems International, 73% of the cross-selling takes place during the first 60 days with as much as 60% cross-selling during the first month and 13% during the 2nd and the 3rd month. |
An effective cross-selling strategy can empower a financial institution to pitch “sticky products” to customers. Sticky products are products or services that are of great value to customers, so much that they become tied down to them. According to a Harland Clarke report3, “An essential characteristic of a successful on-boarding strategy is its ability to engage account holders to utilize ‘sticky’ products and services when they are most willing to buy.”
Since new account holders are the most likely to defect and most likely to purchase additional products, offering them sticky products and services ensures their profitability across the product’s lifecycle and also reduces chances of attrition.
Financial Institutions need to leverage technologies that assist in leveraging account holder data captured during on-boarding to identify niche segments of customers, and their future product requirements; thus, maximizing their share of the customer’s wallet.
Sources:
https://newgensoft.com/resources/ebook-taming- abandonment-online-account-opening/
https://www.cbinsight.com/use-segmentation-to- enhance-your-onboarding-programs.html
https://thefinancialbrand.com/67869/6-online- account-opening-tips/
https://www.mckinsey.de/files/customer-experience- compendium-2016.pdf
