Traditionally overloaded with paperwork and slowed down by manual procedures and time-consuming “in-person” interactions, customer onboarding in banking can now be improved by integrating digital technologies into daily work practices.

For banks and other financial institutions, digital transformation has made it possible to streamline and improve the customer experience while simultaneously increasing operational efficiency. By leveraging cutting-edge technologies such as artificial intelligence, data analytics platforms, and automation, banks are in a position to develop a smooth, convenient, and secure onboarding process. From creating an account to verifying identity, from sending documents to developing personalized offers, each of these activities can be accelerated and simplified through the adoption of digital solutions.

Before delving into the practices and tools through which digitization improves customer onboarding in banking, let’s start by clarifying what we mean by digital onboarding in banking.

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The main driver of customer onboarding banking? Digitization 

In a historical period that has been characterized by rapid technological advances and evolving customer expectations, digital transformation is the fundamental force that can reshape the way banks operate, interact with their customers, and deliver their services. In particular, digitization has significantly impacted onboarding, the process by which new customers are welcomed to the bank and informed about the opportunities it offers.

In the banking sector, digital onboarding can be defined as the automated process that provides customers with access to financial products and services. It includes many operations that until a few years ago were inevitably analog, such as opening a bank account or applying for a loan.

A new notion of accessibility 

Geographic constraints and time limitations often prevent customers from physically visiting a branch, causing friction and delays in the onboarding process. Digital transformation has redefined the notion of accessibility in bank onboarding: through online portals, mobile apps, and virtual interactions, banks can now interact with customers no matter where they are, ensuring that they can initiate onboarding when, where, and on the channel they prefer. In banking, customer onboarding, by speeding up account creation through automation, adapts to the typical digital lifestyle of the contemporary consumer, helping to increase their overall satisfaction.

A deeper and more nuanced understanding

The benefits of digital transformation in onboarding go beyond convenience and opportunity. Advanced data analytics capabilities enable banks to gain a deeper understanding of their customers’ preferences, behaviors, and needs. This articulated knowledge enables financial organizations to offer personalized services and targeted recommendations in upselling and cross-selling. This communicates a message of care and attention to users: the bank recognizes each of them individually and for the value they represent.

Greater trust

When we talk about technological innovation, security and trust are always issues of paramount importance, and this is all the more so in an industry like banking.

Banks that invest in digital onboarding prioritize safeguarding their customers’ sensitive data. Encryption, multi-factor authentication, and biometric verification are all robust security measures that can protect personal and financial information. In an environment of increasing cyber threats, this helps strengthen customers’ trust in the bank.

The benefits of digital onboarding are enormous, as we have seen, yet some resistance and critical issues still persist.

The mismatch between expectations and reality

Digital customer onboarding in banking, which is designed to be fast, easy to execute, and secure, is conducted exclusively online, but still has to comply with the same laws and regulations that apply offline. Also, despite tremendous progress in recent years, many banks and credit unions continue to approach the digital customer experience in a sloppy and superficial manner, contributing to a substantial disconnect between consumer expectations and the reality of what is offered to them.

Take the case where a person has finally been convinced to sign up for a new product or service and expects a quick, simple, and entirely digital onboarding process. In many financial institutions, onboarding still requires customers to enter a branch or brick-and-mortar location to complete the process. According to the Digital Banking Report, identity verification and signatures are the two most common steps involving “physical” interaction.

The same is true for banks that enable only a few digital steps of onboarding. Again, for consumers, this tends to be a poor experience that simply takes too much time compared to what they are used to.

A large survey conducted by the European ID technology provider Signicat found that as many as 68% of people have abandoned the digital onboarding process of a banking product by 2022 (in 2020 it was 63%). The trend of completely abandoning a process that does not work as expected is particularly worrying when we consider that many of the respondents belong to Generation Z and are therefore digital natives. The fallout from such complicated, and cumbersome customer onboarding processes affects the overall perception of the experience with the bank and has negative repercussions in terms of financial results. Digital onboarding is a key moment for financial institutions, and if marketing investments fail to successfully engage all users at this stage of their journey, the loss of money—severing the relationship with the bank as a result—is likely to be considerable.

In addition to the critical issues we have highlighted, compared to traditional interactions in a physical bank, digital onboarding is faster, cheaper, and more scalable. This is why new banks and fintechs have built their entire business model on this practice. It’s also much more convenient for customers, especially younger customers who have grown up in an increasingly natively digital economy. Less friction and 24/7 availability is the real success factor for Gen Z and Millennials, who tend to prefer web banking to traditional banking.

Customer onboarding banking: what changes come with digital transformation?

In light of what we have written so far, it seems clear that, in order to improve the customer experience in banking, one of the most forward-looking choices that companies can make is to adopt digital onboarding processes. Introducing an approach that favors all-digital and hybrid operations and modes of communication not only simplifies the customer acquisition process, but also brings numerous benefits, both to customers and banks. In fact, digital onboarding is reshaping banking on at least three fronts: it reduces printing costs, integrates different touch points with business systems, and makes it easier for customers to understand products and services.

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Simplify the onboarding process: say goodbye to printing costs

Traditional customer onboarding involves time-consuming paperwork, repetitive tasks and, above all, huge amounts of paper forms to be printed and filled out. Digital onboarding has completely transformed this process, making a major contribution to reducing operational costs in the banking industry. As customers move from traditional physical channels and branches to online platforms, the need for physical infrastructure decreases. By prioritizing online forms and interactions, banks have been able to significantly reduce printing costs. The decreasing use of paper is not only in line with environmentally friendly practices but also contributes to significant cost savings. This allows financial institutions to reallocate available resources on customer experience innovation. This transition has resulted in leaner operations, reduced overhead, and improved overall efficiency. Cost savings are evident not only in terms of real estate and personnel, but also in the reduction of physical document requirements and administrative tasks, ultimately resulting in a more streamlined and efficient onboarding process.

Get to know your customers better to create personalized touch points

Digital onboarding opens up great opportunities for banks to better understand their customers. Through online forms, responsive sites, and personalized and interactive videos, banks can collect data that provides insight into individuals’ preferences, needs, and behaviors. This information can then be used to create touch points, content, and offers that meet the specific needs of each customer. For example, banks can use their data to suggest financial products and services tailored to and in line with a customer’s specific financial goals. If a customer shows a penchant for travel, the bank might recommend services to facilitate currency exchange or credit cards that build points that can be redeemed for rewards such as flights, hotel stays, car rentals, and more. By leveraging such information, banks improve customer engagement and build stronger, longer-lasting relationships.

Integrate different touch points for a seamless experience

Modern customers expect a seamless experience that goes far beyond the initial registration. Digital onboarding enables banks to achieve this by seamlessly integrating different touch points into its ecosystem. For example, once a customer’s data is securely stored in the bank’s system, subsequent interactions become more seamless. Whether a customer is applying for a loan, setting up a new account, or seeking financial advice, their information is easily accessible, and there is no longer a need to send redundant data. In addition, integrated systems enable banks to offer omnichannel experiences: customers can start their onboarding journey online and easily transition to in-branch interactions or vice versa, without any interruption. This level of continuity enhances customer satisfaction and strengthens the bank’s reputation for being perceived as technologically advanced and customer-centric in an increasingly competitive market.

  • New upselling and cross-selling opportunities. The integration of processes within digital onboarding creates new opportunities for upselling and cross-selling. As customers engage in the onboarding process, customized content can be created for additional banking products and services that are in line with the customer’s financial needs and goals. By analyzing customer-provided information and transaction history, the system can offer targeted suggestions by fostering customer engagement from the very beginning of their banking journey.
  • Comprehensive and timely support. Another key aspect of integrating different touch points into the onboarding experience in banking involves digital customer care processes. With real-time chatbots, artificial intelligence-based support systems, and automated communication management platforms, customers can be guided throughout the onboarding process. This integration ensures that any questions, concerns, or problems that arise during onboarding are resolved quickly, testifying to the bank’s commitment to providing comprehensive and responsive support.
  • A holistic view of the customer journey. Seamless integration of the digital onboarding process with the bank’s application ecosystem, including Customer Relationship Management (CRM) and problem-solving systems, provides a holistic view of each customer’s journey and a coordinated approach to meeting customer needs and monitoring their progress. By mapping customer interactions and requests, the bank obtains detailed information on pain points and areas for optimization, which, in turn, improves overall process efficiency and customer satisfaction.
  • Optimized points of contact. The digital onboarding process provides banks with greater flexibility in optimizing existing touch points and implementing new ones. As customer preferences and technology evolve, banks can adapt their onboarding process to include emerging digital platforms and channels. This flexibility allows banks to stay ahead of the curve, reach customers where they are most active, and experiment with innovative approaches that enhance the onboarding experience while maintaining consistency across touch points.

In conclusion, digital is revolutionizing customer onboarding banking by eliminating printing costs, fostering deeper customer understanding, diversifying business touch points, and effectively integrating them into the IT infrastructure. This transformative approach not only benefits banks by simplifying processes and reducing operational costs, but also provides users with a convenient, personalized, and secure onboarding experience. As the digital landscape continues to evolve, the banking industry’s adoption of digital onboarding demonstrates an ongoing commitment to improving the customer experience.