When it comes to onboarding new customers, taking care of their needs should always be the priority. But while customer needs have generally stayed the same over the years — account set-up, due diligence, and risk assessment — the way to meet those needs has changed.
A growing digital world has evolved our expectations around even the simplest tasks. Ordering groceries, getting around town, socialising, and doing business is easy and efficient with a simple tap on a screen. Why should we expect anything less from our banks? In fact, the argument can be made that banking needs to stay at pace with customer expectations, or even ahead of them, in order to keep customers satisfied and keep themselves competitive.
But how can a bank better serve the modern corporate banking customer? What are their priorities? A recent report entitled The State of Corporate Banking Customer Onboarding 2020 asked corporate customers about their experience in opening business accounts across global, local, and digital banks. Overall their expectations align with doing business in a fast-paced digital world — but their experiences still encountered a lot of friction.
Speed of Account Set-Up
We say the world’s gotten quicker, but that’s only because we’ve found more efficient ways to complete tasks faster and with less friction. Yet while some banks are keeping up with digital initiatives and new technologies, some are falling behind. It is no surprise that the speed of onboarding affects the customer experience. According to the report, the expectation for fast account set-up has caused customers to actually stop the process of opening an account when they felt the onboarding was taking too long.
The report showed 88 percent of customers were up and running with their corporate account within a week — 15 percent were up within 24 hours, 42 percent within one to three days, and 31 percent within four to seven days. This is certainly a fine timeline, but in this digital world could certainly be improved upon. Many of those accounts were indeed set up within 24 hours, with the majority open within one to three days. But banks that are taking longer than that (customers reported having to wait up to a month for set-up) need to ask themselves how could they make the process much faster to keep up with quicker banks and customer expectations?
Physical Locations and Hard Copies
For a long time, going to the bank to stand in line to make a deposit or wait for a representative to speak to was always on the list of weekly errands. That need to visit a branch has reduced in the past few decades with the introduction of online tools and apps, and with the shift away from cash. Yet the report revealed 40 percent of customers were still required to go to a physical location to open their account. Is this making the best use of a customer’s time and providing them with a good onboarding experience? In a similar fashion, the report notes 44.5 percent of customers still had to print out and sign physical copies of their account creation documents.
In a world where major tasks from applying to college to applying to a job can all be done online — and where the COVID-19 pandemic has forced businesses to come up with creative ways to conduct business without needing a physical location — why would nearly half of the customers surveyed still be required to make the time to go to a physical location or print out physical documents instead of submitting them digitally? This again points to a misalignment in banking practices and customer expectations. Digital tools are already available to create an online-only and speedier onboarding process, and banks should be using them.
Call-Backs for More Information
Business owners have a lot of work to do, and customers expect that setting up a bank account should be a simple act. But during the set-up process, half of the customers surveyed in the report were asked to provide further information — sometimes up to five different times. For those banks requiring location visits, that meant taking time to travel as well. This issue was the biggest point noted by customers in the report around how banks could better improve the onboarding process. Customers would prefer the bank to ask for more information up front so they don’t have to keep sending information later.
This shows that additional friction can arise between the customer expectation for a faster process and requests for information that slow the process down. It also surfaces questions around how banks approach their onboarding process. Does going back to customers for additional information mean that banks are not utilising the right Know Your Customer (KYC) tools, and are going back to customers because they’re checking outdated information? This again points out areas where banks need to reassess and re-envision their onboarding strategies.
Reducing Friction
How can banks change their tactics to help better serve customers, and better align with current customer expectations? The report suggests that digital banks are embracing and utilising technology to bring banking into the current era. Digital banks allowed customers to open their accounts online, fill out paperwork online, and had the least amount of asks for additional information. Additionally, 75 percent of digital banking customers had their accounts within three business days.
What does this mean? Banks who use digital technologies to streamline their onboarding processes are better at meeting their customers’ expectations when it comes to fast, thorough service with less friction. If banks truly want to serve their customers and keep a competitive edge, they’ll understand the importance of evaluating and updating their processes moving forward.
