Digital onboarding – accelerating customer acquisition
If you’re working in a bank, chances are your bank may not have switched over to a digital environment and customer onboarding is still a ‘good to have’ discussed in meetings, and yet to actually make a mark. But you’re not alone. Digital banking solutions, while increasing rapidly in the banking industry, are still slow to be adopted by several banks. And when digital banking platforms are not yet leveraged, customer onboarding is one of the first services that suffer.
Did you know that when Peter Ramsey, the founder of Built for Mars conducted a test on the time taken for opening a bank account he found these astonishing numbers?
- anywhere between 24 – 120 clicks to just open an account
- anywhere between 8-36 days in some banks to just make an account active
Speed and seamless onboarding is a must
In the age of speed, intense competition and the digital age, customers everywhere want a seamless, convenient and less time-consuming service offering. Digital onboarding of customers means several things for your bank:
- reducing the complexity of onboarding with easy upload of documents for KYC for instance
- using smart future-ready technology such as OCR, Liveness detection and facial match for a quicker and more accurate verification process
- decreasing time-to-onboard from weeks and several clicks to minutes
- safer onboarding processes that are compliant with bank regulatory requirements
- creating a frictionless onboarding environment that is more customer-centric
Adopting a digital onboarding process like the one that Modefin provides as part of its solution bouquet, to banks, in need of making the smooth transition from the conventional to new-age banking, is the most logical and necessary step. Without digital intervention today, banks are at risk of losing customers to their competitors and are looking at stagnant growth rates. Banks must also weigh the risks when switching to digital onboarding vs continuing to go the traditional route. The table below advances the argument that digital onboarding today is far safer, essential and an imperative for banks to continue to grow.
It is believed that customers stay with their banks for as long as 15+ years. What does this mean for banks? Banks have to devise strategies for new customers as the numbers of their loyal customers may be stagnating. If you add complex, cumbersome and tedious paper-based onboarding processes, it will only add to the slow speed of customer acquisition and retention and impair the chances of healthy growth YoY.
When banks adopt digital onboarding, the speed of identifying, processing and approvals are exponentially faster than traditional modes of onboarding, it reduces:
- loss of revenue for banks
- procedural and processing costs
- eKYC errors, for instance, can save time and millions paid in penalties for non-compliance
- risk of fraud with the adoption of robust technologies such as OCR, biometrics, liveness detection
- onboarding time from weeks to minutes
Opening bank accounts from a device is the preferred mode
For many of the top bank executives, digital onboarding is a critical initiative that is the topmost priority. In fact, in a survey conducted by OneSpan North America, an authentication software firm, 8 in 10 customers said they prefer opening a bank account on their phone or any other handy device. In fact, 6 in 10 bankers agreed that a poor onboarding process is one of the key reasons for customers abandoning onboarding mid-way.
Imagine if Mrs. Smith or Mr. Khan walk into your bank to open a new bank account. Would it be wrong to say that there is every likelihood of either of them being overwhelmed by the maze of counters, the complicated process, the several documents needed for approvals and the sheer time it takes to onboard and activate an account? Now imagine if your bank had adopted Modefin Digital Onboarding which is driven by AI at its core! You would have been able to provide your customers with:
- > 95% accuracy in data extraction
- fraud and exception handling
- intelligent document classification
- 3-tiered review process
- eKYC process that reduces 90% of physical verification costs
- unparalleled onboarding experience from data capture, extraction, verification, approval and e-signature completed in minutes
It is therefore extremely important for banks to realize that adopting digital banking technologies is now an imperative that you cannot just ignore. With the advent of quicker, safer and more convenient onboarding services provided by digital banking platforms, banks can look forward to an increase in customer acquisition, which in turn translates to a bank’s growth and success in the long-term.
If you’d like to understand more about how to make your bank digitally savvy, do connect with us.