Customers today expect a streamlined, efficient, and personalized onboarding experience whenever they choose to do business with a new company. Financial institutions are no different. However, antiquated technology, lack of coordination across business units, and the need to comply with regulatory requirements prevent many financial institutions from delivering a thoughtful, integrated onboarding process. Instead, they struggle to start customer relationships on the right foot. As a result of frustration and lack of feeling valued, many new customers leave as quickly as they joined.
Financial institutions that get customer onboarding right can improve customer satisfaction, lower churn, and gain better insights into customer preferences and desires, all while reducing costs and enhancing regulatory compliance.
At many financial institutions, the customer onboarding experience is actually harming the brand. An organization may invest heavily in marketing materials, promotional offers, and other messaging to attract new customers. Yet as soon as the customer joins, this brand-defining experience may stop abruptly, replaced by stacks of paperwork, overnight mailings, and redundant data requests. Compare this to industries where onboarding is as simple as downloading an app, inputting a name and email address, and clicking “accept” for terms and conditions. When their new financial institution compares so unfavorably, they can't help but wonder how else it will fail to meet their expectations.
Financial institutions often cite regulatory requirements as the main reason for complicated and cumbersome onboarding processes. Although these requirements pose challenges, we see opportunities for many improvements. Indeed, regulatory mandates can provide the business case for improvements that satisfy compliance requirements while also enhancing customer experience.
In the first six months after the account is opened, financial institutions should proactively communicate with the customer, offer preferred customer and loyalty programs, and provide interactive tools to help the customer continue to engage. The financial institution should also proactively apply a needs-based approach to help identify which other products or services will benefit the customer.
In order to transform the client onboarding experience, financial institutions should assign clear accountability for and ownership of the onboarding process. In our view, each of the following eight components has the potential to make a significant impact on the onboarding process: governance and organization, experience design, process, risk, compliance, digitization and automation, data integration, and analytics.
In this paper, we discuss our observations of onboarding processes across the industry, some of the common challenges that impede progress, and our approach to overcoming these obstacles and achieving success.
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