Banking on the right experience: Transforming financial services onboarding journey

Customers often find bank application processes to be confusing, difficult, and cumbersome.
With new entrants competing for customers and outside digital experiences providing best practice, banks should evaluate how their internal processes affect customer experience.
Ensuring the business model maps efficiently to customer experience, to optimise and remove complexity is a great place to start to deliver satisfaction.

Have you ever tried to join a new bank and found the experience lacking? Your customers have.

In an age where fintech disruptors are ticking boxes when it comes to best practice onboarding, banks are finding themselves hamstrung by organisational design and legacy technology.

In a traditional bank structure, multiple teams need to be involved in customer acquisition. Marketing identifies and targets the right customer audiences, sales manages the products, other business support teams handle fraud, credit decisioning and so on. Product tracks the pipeline and pushes the application through the journey… and then, finally, operations processes the account.

For fintechs, with less staff and a greater emphasis on technological solutions to flex, good design can do the job of all of these areas. For instance, a longer ‘onboarding’ process can, counter-intuitively, provide a better match with customer expectations – by outlining steps easily, clearly and without the need to scroll pages or read lengthy disclaimers. It’s the perfect example to showcase the chasm of approach between disruptors and incumbents. And the gap is growing.

A disruptor difference in thinking

As new entrants enter the market with sleek mobile-native offerings, banks are finding that the competition for customers is heating up. Fintech disruptors are highlighting what customers want when it comes to digital services: the same easy experience that they encounter daily on their email, shopping and social apps.

Giving fintechs an even greater advantage is that many incumbent banks have legacy technology and organisational issues to solve. This is especially noticeable in customer onboarding processes.

With marketing, sales and accounts teams separated across organisations, their goals and tasks seemingly distanced from each other, work becomes siloed. This cascades into poorer customer and employee experience. Two things that suffer? Cohesive experiences and improvement mechanisms.

Fintech disruptors often provide customers with a more cohesive sign-up environment. The process of onboarding seems to flow, it ‘just works.’ Even with more initial input steps, a logical flow and ease of use mean the customer arrives at the goalposts much faster and with less friction. This is not always true for traditional banks where processes are broken out into sections to align to separate teams. The experience isn’t designed with the customer in mind, but the tasks the onboarding teams need to do. Importantly, it doesn’t matter how well each of these teams do that job – in the customer’s mind, the process has been disjointed and consisted of multiple hoops to jump through.

This is a significant pain point for customers, but unfortunately, with siloed departments, banks can have a hard time recognising its importance due to another issue: siloed data. When customer data and feedback is being retained in separate teams, the true story of how much an issue is concerning a customer can be hidden. If a customer has had an issue at one or more of the three teams that have helped them onboard, does the next team know? Is the cumulative effect of what might be, on their own, small failures, actually a much bigger customer experience problem?

When compared with the ease with which newer operators overcome problems, or sidestep them completely, these failures become less and less forgivable in the eyes of the customer.

…but what can be done about it?

Siloed teams can mean real disruptions for a business. But as traditional banks with good customer experience at heart expand their thinking on how they do business, some of these problems will yield. Fast-growing fintechs disrupting the market can be seen, in part, as an indication of how customers are responding to such impediments. So how can banks overcome what are ingrained, and complex challenges?

We see three paths:

Retain the status quo – Obviously, there is the option to just assume that fintechs will be unable to match the security, loyalty and reach of established banks. With no major changes, banks could at least try to encourage more internal communication/partnership to pave over the problems. This is the least optimal path, as it risks fintechs getting further ahead in the market and the potential for customer switching.
Attempt a temporary catch-up — Bridging the gap between teams and solutions by stitching existing tools together could, at least temporarily, put a fix in places that while failing to solve all experience problems, could at least mitigate some of the worst. There is the risk with this option that this could hamper eventual innovation down the road, for instance, by not addressing data debt now and finding it unfit for purpose to take advantage when you eventually do attempt a transformation.
Transform with a digital overhaul – In our experience, the best (and yes, sometimes scariest) approach, involves the most change. By transforming to a digital-first institution, updating/overhauling tech stacks and innovating by creating in-house disruptive technology solutions or adding to offerings via open banking, there is a much greater opportunity to keep customers within the bank ecosystem. Of course, such transformation would also require connected key performance indicators to encourage a collaborative work environment and cross-functionally across departments.

While it is imperative to get your journey right, a bank cannot forget its customers. New experiences should apply to all channels including the branch and call centre to ensure the entire customer base is satisfied and no one is left behind.

Putting the customer first

A rapidly growing regional banking client we worked with in the US was having a big problem when it came to customers completing the process of opening an account. Eighty-eight percent of applications never made it to completion, with customers either failing due to errors or abandoning the process as too difficult. The majority of customers who gave up did so at the very beginning – when they were asked to select a product and input their initial information. Given industry averages of a 30 percent application completion rate, we estimated the bank was losing out on $1.8+ million per year in revenue.

Analysis showed that the process was one-size fits all, was often clumsy and inflexible, had no differentiation for existing customers vs prospective ones, and was the same process regardless of customer risk-levels. The proof of the damage this was doing was in the numbers.

By implementing new digital solutions, the bank was able to understand and segment their customers, use targeted messaging and deliver personalised experiences. The application process was altered to be multi-product and differentiated for existing customers. Created dynamically online, customer input fields were instituted that were less prone to errors. A streamlined offline review process was put in place, as well as automation to detect threats and fraudulent accounts. Finally, the end steps were streamlined using third party plug-ins, giving customers dynamic, and risk-appropriate, funding options and limits.

The result? Better digital marketing allowed the bank to achieve an 80 percent decrease in cost per acquisition on target products and a 45 percent increase in online and mobile banking sign-ups for newly onboarded customers. The bank saw a 40 percent growth in balances with digitally savvy consumer segments. The transformation led to a 30-40 percent increase in application completion.

The new banking experience

The bank manager used to be one of the most trusted professionals in town and a lot of that was down to customer service. House calls, community events, personal attention. In a different world, digital experiences need to be just as trustworthy, and often they will be so because they are convenient, fast, seamless and easy.

By keeping the importance of digital experience at the heart of decision-making, and making the choices necessary to deliver on promises, banks can navigate a competitive landscape and deliver on their customer value propositions. The results speak for themselves.

^{With contributions by Christopher Miller.}

Banking on the right experience: Transforming financial services onboarding journey

A disruptor difference in thinking

…but what can be done about it?

Putting the customer first

The new banking experience

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A disruptor difference in thinking

…but what can be done about it?

Putting the customer first

The new banking experience

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