The traditional process of registering and onboarding commercial banking clients is lengthy and expensive. It’s typically an eight-step journey that can take up to 16 weeks. According to Deloitte, banks may end up investing as much as $20,000 to $30,000 to onboard a new customer. Automation can save up to 50% on this process.
In addition, automated customer service improves the overall experience and increases loyalty by making customers feel comfortable from the start. They only have to enter information about themselves once, and the service they receive is consistent and straightforward at every touchpoint, so they can easily apply for new services on any device. If your bank wants to increase customer acquisition, automating the registration and onboarding process not only makes sense but is critical to staying competitive.
Banking App Onboarding Automation Goals
Financial institutions spend a lot of time and money manually processing registration and onboarding entries for banking apps. Processes automation brings accuracy and efficiency, relieving your team of extra work. Take a look at the key goals of automation:
• Lower costs. According to Forbes, automation lowers onboarding costs by 70%. It allows banks to avoid data entry and correction errors, avoid non-compliance fines, and streamline the onboarding cycle, significantly reducing costs.
• Eliminated risks. By automating the entire onboarding process, banks eliminate the risk of human error during data entry. Banking app onboarding automation also reduces security threats and data breaches, keeping customer data safe and banks compliant.
• Scalability. Scaling manual processes can be quite expensive and difficult to adapt to frequent changes in KYC regulations, external threats, or internal changes. In contrast, AI-driven bots operate round the clock, easily adapt to changing requirements, and can be integrated into an organization’s infrastructure with little to no interference or downtime.
• Increased efficiency. Fully automated banking registration and onboarding allow customers to create a verified digital identity that can be checked immediately. Automated solutions don’t need any rest and run 24/7 with no downtime. This minimizes onboarding time and enables financial institutions to increase the total number of customers served.
• Better customer experience. Traditional banking registration and onboarding take about three weeks on average. With automation, you can do it in three minutes or less. The time saved is significant for both employees and customers, reducing bureaucracy and avoiding losing customers in the final stages of customer acquisition.
• Reduced employee workload. Automation eliminates the need for employees to perform repetitive tasks. That means they can focus on higher-risk cases, higher-value tasks, and customer-facing activities. The Forbes study found that 92% of the 302 executives surveyed said employee satisfaction has increased as a result of intelligent automation initiatives.
Issues to Consider in Customer Registration & Onboarding
In 2021, 68% of users abandoned the digital onboarding process for a financial product. It is undeniable that financial institutions need to apply banking onboarding best practices, making fintech onboarding more delicate and executed with attention to detail, in accordance with specific regulations and standards. It is also important to consider customers’ low financial literacy and their high expectations for ease of use and immediacy. We’ve compiled some registration and onboarding issues that require special attention:
• Customers expect immediate, seamless service. They want a fast application that is easy to understand and use. Registration and onboarding should take as long as it takes for the user to become comfortable with the app. It is also crucial to make the banking app’s UI simple and intuitive – if a user is presented with dozens of options before they are comfortable with a product, they may not want to look further into it.
• Customer expectations that are too high. Users want their banking application to meet their specific needs. Also, users’ financial knowledge varies widely, and you need to cater to customers who have limited knowledge of how to use banking applications. This means that a one-size-fits-all solution will not work.
• Stringent regulatory requirements. One of the biggest challenges banks face in smooth registration and onboarding is the increasingly stringent and complex requirements to comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. Banks must conduct thorough checks for money laundering and fraud before they can work with their customers’ money. Otherwise, they face severe fines. For this reason, customer identity authentication and due diligence are becoming more intensive and time-consuming.
• Lack of customer feedback. This challenge arises when you don’t take proactive steps. If you wait for a user to contact you because they have an onboarding issue, it may be too late. Some users will figure out how to resolve an issue. Others will simply ignore a particular problem with the product if they can continue to use the rest of its functionality without issue. In this case, you don’t find out what the problem is, and you lose the less patient customers.
Best Practices of Registration & Onboarding Automation for Banking Apps
According to The Fintech Times, banks may lose $22.75 billion due to slow onboarding. Overly lengthy processes, time-consuming authentications, and form-filling difficulties are the things you should avoid if you want to attract more customers. In this section, we’ll provide you with some insights on registration, online onboarding, and KYC automation best practices that will encourage your customers to keep using your banking app.
The first tip is to build trust with your user as soon as possible. The sooner you do this, the sooner you can guide customers through the bank onboarding process, create a positive first impression, and gain loyalty.
Fintech companies are subject to strict regulations and collect sensitive information. Before users can sign up and use your services, they need to know that your app (and brand) is reliable. Here are three ways to prove that your app is trustworthy:
• Allow your customers to use the app first without having to register for an account. You can hide some of the deeper features behind a sign-up form.
• Add security measures to make users feel more secure. For example, send notifications to confirm that a purchase was made through the app.
• Speak their language to explain why you need to collect personal information and how you plan to use it.
Fully Mobile Banking Solution
With the widespread adoption of digital ecosystems like Uber or Amazon, customers everywhere expect an instant and seamless experience, and finance is no exception. A banking app must be accessed quickly and at any time without any additional effort. This means that any solution designed to facilitate onboarding automation for banks must take a mobile-first approach to all steps of the customer banking journey.
The entire onboarding process should be started and ended by a simple text message to the user’s cell phone. When a customer clicks on a link in the message, a secure portal opens for interaction and completion of all onboarding steps. The customer doesn’t need to be distracted by the requirement to print, sign or upload documents and send them via email.
Simple ID Verification
Changing AML and KYC requirements are always a challenge for both banks and their customers. Potential customers must submit documentation and pass identity verification, which requires personal presence or the tedious process of scanning, uploading, and emailing documents. Both methods are cumbersome and leave room for human error.
An advanced ID verification and authentication solution used for the modern onboarding process should include fully automated KYC, where a customer can use a smartphone to take pictures of their face and driver’s license and submit them for approval. In this way, onboarding time and fraud risk are significantly reduced, and the most stringent identification and verification requirements are met instantly.
Personalized Customer Journey
Customer data may change, but the key steps in the customer journey are likely to remain the same. By creating personalized messages that are timed to each of these steps, you can provide your customers with an experience that feels tailor-made for them. You need to have content that answers all the onboarding questions and deliver it at the right time and in the right format. It’s also one of the onboarding best practices to track onboarding metrics that indicate whether a user is succeeding or dropping.
Do not forget to deliver these messages through a secure TCPA, PCI, and HIPAA-compliant channel that’s still easily accessible to customers.
Smart eForms and eSignatures
In contrast to fintech onboarding, during the traditional process long and complicated PDF forms must be downloaded, filled out, and then scanned or uploaded again, requiring numerous touch points. In addition, errors and omissions cause delays, and service representatives on the other end have difficulty reading handwritten fields.
Smart eForms are mobile-optimized, simplified in their presentation, and ensure that the form is completed in real time. Then, eForms can be submitted instantly from any device. Basically, eForms save time, improve completion rates, and enhance the overall customer experience.
Banking applications should allow banks to obtain legally binding consent from their customers instantly and from anywhere. With the click of a link in a text message a customer receives on their smartphone, they can access and sign a secure document. This process is simple and fast, allowing banks to close more sales and reduce cycle time and compliance risk.
Real-time Customer Support
Dozens of different steps, forms, rules, and intricacies in traditional bank support centres create confusion and frustration for customers. They either have to go through multiple touchpoints with the bank to complete the process, or they refuse to proceed at all. Either way, banks lose out through higher administrative costs and lost revenue.
Automated, real-time customer support allows service representatives to help a potential new customer with the onboarding process. The customer can see the application on their phone while talking to a staff member who has the same screen view and is advising them.
Why Use Custom Software for Registration and Onboarding Automation?
For 8 years, Itexus has been providing custom banking automation services to banks and financial service companies, enabling them to complete repetitive tasks more efficiently, eliminate human error, and streamline interactions with their customers. Take a closer look at the benefits of custom banking automation software:
✔️ No licensing costs. A custom solution is a one-time investment – you become the owner of the source code, which can be modified later.
✔️ Fully customized & scalable solution. We deliver automation solutions tailored to your needs and equip them with new technologies to give you an edge over your competitors.
✔️ Added security. We know that financial applications require bulletproof security. Our engineers apply the zero-trust and “never trust/always verify” approach, testing every aspect in terms of data protection and customer trust multiple times before handing over the project to the customer.
Customers demand convenient end-to-end service in real time, accessible from anywhere. Without realizing it, they also expect this experience from banking services. Automating bank registration and onboarding is the first step to preventing customer churn. For more information on your specific automation case, contact our team. We will be happy to assist you.
By Itexus Team