Digital customer acquisition and onboarding. A must-have for banks in times of social distancing.

Customers and businesses are adapting to the Coronavirus pandemic. Almost overnight, we've seen a seismic shift from the high street to online banking and other financial and professional services. It's also been a huge change for bank employees, with many now working from home.

At first glance, digital-only banks may seem better prepared for this change. But, traditional banks often have strong, trusted brands. This familiarity can be a big advantage at a time when customers are seeking reassurance and stability. On top of that, traditional banks have significantly larger resources on hand.

As more customers are switching to digital channels to interact with their banks, the future of customer acquisition will be decided in the online space. Banks are quickly realizing that, to remain competitive, they must offer fully digital customer onboarding. And, to attract new customers they need to build relationships through digital advertising and social media channels.  Taking a page from the retailers marketing handbook, proactive banks are redefining their approach to customer acquisition and communications. They are replacing or supplementing generic brand and product advertising campaigns and leveraging customer data to design personalized offers. They are also creating digital content focused on informing, reassuring and educating.

The future is here and all banks need to be ready

The COVID-19 crisis is accelerating the re-design of the banking customer experience. Traditionally, opening an account meant face-to-face meetings and signed paper documents. That is no longer an option.

Your new customers are spending much more time at home and online. And now, more than ever, they need your support to manage their finances and ease the financial pressure. Banks need the full range of digital tools to acquire and care for all their customers; not just those who are used to digital banking but also those who would previously have preferred to use a branch.

Digital onboarding defines your future customer relationships

Attracting new customers isn't easy nor cheap. Banks need to find new ways to reach them, draw them in and create an opportunity to sell new products and services. Customer onboarding sets the tone for the entire on-going relationship banks have with their customers. It's essential to get this "first journey" right and avoid wasting significant customer acquisition cost.

Just as many people around the world have switched to home working, they also want to bank from home. They may well be using some of their lockdown time to review their banking arrangements and try out new services. For those who decide it's time to switch to a bank with a more attractive digital offer, the process needs to be easy, secure and stress-free.

Customers want the experience to be fast and flexible with no frustrating delays. Even if they choose to use different channels, they don't want to answer the same questions multiple times. Nobody likes a lengthy onboarding, customers want to be able to start banking as quickly and as simply as possible.

Here are five digital onboarding steps banks must get right.

1. The initial application   

When customers need to open an account (either online or via a mobile banking app) they expect the process to be straightforward. The user interface should be clear and easy to use. For example, they should only have to input details, such as name and address, once – and input only the minimum amount of information needed.

They will also expect to be able to use their mobile to take a picture of their ID and other necessary documents. Uploading them should be quick and easy. There should never be any need to mail or take any of them to the branch.

2. Identity verification

Technology can ensure KYC checks are both secure and smooth. Combining document capturing with biometric facial recognition means banks can now offer selfie-based onboarding or video call-based onboarding while retaining the full documentation for regulatory purposes.

PSD2 gives the option to both verify the identity and connect other existing accounts immediately, while Near Field Communication (NFC) scanning and hologram recognition help to confirm the validity of the IDs used.

3. Approvals and decisions

Pre-screening options and quick decision-making capabilities built into the system are a huge time saver for customers and a must for banks.  By implementing predictive models and a risk-based approach, banks can master real-time decisioning and streamline customer interactions or recognize potential fraud cases. This way, they can offer fast and secure KYC checks that allow customers to instantly open a new account from the comfort of home. In case of a potential fraud, they can redirect them to call centres or other channels for more interactive verification methods.

Fast and frictionless interactions will help to ease financial anxieties during this difficult time. Those first few hours of the customer journey play a significant role in building long term customer loyalty. The speed and invisibility of all the decision-making processes going on the background is the key ingredient here – it all needs to happen within seconds and not slow the signup process.

4. Keeping it all paperless – including signatures

Digital account opening builds an expectation with customers that this digital process will continue smoothly. That must include e-signatures. Removing the need to physically sign documents reduces the onboarding process from days or weeks to minutes. The simple inclusion of modern one-time-password elements through mobile number and SMS also simplifies and secures the process.

5. Product flexibility

Many bank customers will need multi-product onboarding capabilities. For example, a retail customer may want a credit card or savings account. A small business owner may need a loan as well as a deposit account. These options need to be easily available; a saving account should be literally one click away.

To fulfil this expectation, a fast real time approval process should also be put in place for additional products, such as credit cards or loans. With PSD2 account information, real time access to creditworthiness and predictive analytics, banks can approve a credit card or a starting loan immediately. Clients should be able to open multiple products during the first interaction – literally within a few seconds.

VeriPark's VeriChannel and VeriTouch platforms give banks omni-channel capabilities for digital customer onboarding and on-going customer communications. This means customers can choose mobile and/or online banking channels and enjoy a frictionless and engaging end-to-end onboarding journey. And, banks can continue to onboard customers easily, cost-effectively and securely.

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