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Trends in Digital Customer Onboarding
To begin with, let’s look at the current trends related to eKYC and digital onboarding. Below, you’ll find the most important information you need to know.
Digital Customer Onboarding in Banking Is on the Rise
First of all, digital customer onboarding is on the rise—customers are more likely to opt for it than for traditional procedures. This is rooted in several events that together pushed the clients toward the digital, such as:
- The 2020 COVID-19 pandemic and the remote boom.
- The ongoing Great Wealth Transition which caused a shift in the age of clients using wealth management services.
- The growing technological literacy.
As such, you need digital onboarding in your bank to reach out to a wider audience—it’s no longer an asset; it has become a must!
Digital Customer Onboarding Is Often Ineffective
As mentioned in the introduction, the abandonment rates in digital onboarding are still quite high, reaching up to 63%, depending on the year the statistics were collected. This shows that, although clients want this procedure to be digitized, a lot has to be done to achieve the desired results.
This is further strengthened by data from other sources. For example, the 2020 Digital Banking Report from The Financial Brand[2] showed that for many customers, online reporting still takes too much time, reaching over 10 minutes for 27% of the clients. This is more than enough time to lose their attention span, hence discouraging them from choosing your bank.
Automation and AI
Innovative technologies also play a crucial role in trends concerning digital customer onboarding in banking. Artificial intelligence (paired with biometrics) can automate the process, making it faster and simpler for clients. We are bound to see an increase in this particular use of AI in banking in the near future.
Best Practices for the Digital Customer Onboarding Process
Knowing the trends, we can focus fully on the best practices regarding customer onboarding. How do you improve this process to eliminate inefficiencies, and turn it into a competitive advantage rather than a source of unclosed leads? Here are our tips and tricks:
Make It Fully Digital
A digital customer onboarding process that isn’t fully digital is an ineffective one. Forcing your clients to visit physical branches several times during such a process (naturally, depending on the type of onboarding, the margin gets larger) will make your clients significantly less keen to complete it. Therefore, you should ensure that the non-remote interactions are reduced to a minimum.
For that, you’ll need to use several strategies and technologies, namely:
- Digital authentication (preferably with the use of biometrics and AI).
- Effective remote communication methods, such as video banking.
- The possibility for the users to pause and resume the process.
Add Account Aggregation Modules
According to the previously mentioned Digital Banking Report[2], most customers opening accounts in physical branches start with a balance of over $100. On the other hand, only 29% of clients kick off with such a balance after digital onboarding. This makes it much easier to abandon their account, decreasing your retention rates.
How to battle this issue in the digital customer onboarding process? Include instant transfers and account aggregation in your process. This way, you’ll ensure that more clients remain with your bank after setting up an account.
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Make it Short
The shorter your digital onboarding process, the more likely a client is to complete it. Hence, don’t make it more complex than absolutely necessary.
Monitor Your Digital Customer Onboarding Process
Finally, one of the best practices for digital onboarding is constant monitoring of the process, with a particular focus on the clients. This will help you locate bottlenecks—stages at which clients are most likely to abandon the process. With that knowledge, you’ll be able to come up with a solution to them and hit low abandonment rate KPIs in banking!
Digital Customer Onboarding in Banking: The Takeaway
Perfecting your digital customer onboarding process is the key to more effective, cheaper customer acquisition. Therefore, don’t hesitate to invest in upgrades and better tech—it will pay off quickly!
You might also read: The Value of LiveBank
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