Successful customer onboarding in banks

Despite constant investments in technology, European banks face a 68% abandonment rate in customer onboarding, according to digital identity company Signicat. This costs more than €5.7 billion each year in wasted expenses.

A huge number of banks are experiencing the Red Queen effect in relation to digital onboarding. It’s the idea that no matter how hard you work, you’ll stay in the same place.

Customers are used to the simple, fast, and entirely digital onboarding experiences provided by social media and retail websites. Banks, however, operate in a heavily regulated industry. They need to gather a lot ofinformation and documentation, which makes onboarding a complex and time-consuming process.

The cause of the complexity

The issue lies primarily with fraud. Banks must use siloed point solutions to meet ever-changing regulatory requirements intended to combat fraud and protect customers.

In 2022, nearly half (44%) of financial services organisations surveyed by PwC had experienced customer fraud. Fraud can come in many forms, such as falsified or stolen details, forged currency, and the manipulation of customers to access funds.

In addition, new forms of fraud are appearing with the expansion of digital tools. One example is ‘fraud as a service,’ a troubling indicator of unified fraud operations on the dark web.

To safeguard and facilitate the verification of customers’ identities, banks have invested in multiple point solutions, each geared toward a specific area of onboarding. Because these tools are predominantly disconnected, digital onboarding becomes a maze of rigorous checks where anti-money laundering (AML) and “know your customer” (KYC) processes abound.

On top of this, banks need a large volume of customer data—physical documents included—to meet constant regulatory compliance checks. It’s easy to understand how the process can quickly become frustrating and why many people abandon their applications.

How can banks move faster?

Behind the scenes, most banks have multiple teams using various IT solutions to manage different parts of the onboarding process. In other words, those teams rely on disjointed, siloed customer data and drawn-out operating models that need to be connected.

For example, many client lifecycle management (CLM) tools are handled by at least three teams. Between them, they deal with information reviews, data processing, and management of regulations and sanctions. The time these teams spend coordinating can extend customer onboarding from a few days to several weeks.

A more efficient way to operate is to consolidate these siloed tools, processes, and data across a single workflow platform. A unifying workflow solution can connect processes and tools, help banks eliminate silos, and give onboarding teams a 360-degree view of customer data in real time.

The benefits of this are many. Being able to use onboarding data from anywhere in the enterprise increases resource efficiency, saving money on overall operating costs. Connected systems allow security alerts to be fielded by the appropriate teams in real time. Ultimately, smoother and faster onboarding can help lower the rate of customer abandonment.

Seamless customer onboarding experiences

If your organization has fallen victim to the Red Queen effect, consider integrating your siloed tools into a single platform, such as the Now Platform. A more streamlined approach will simplify the way you manage data to create a clearer view of it and ultimately result in more successful customer onboarding.

A fully connected platform provides:

• Simplification: A streamlined platform means an easier onboarding experience, increasing the rate of completed onboarding journeys.

• Efficiency: Connected tools and data points automate manual processes, giving your teams the time and resources to prioritise other areas for better customer experiences.

• Transparency: A 360-degree view of one system can ensure quick access to data and IT alerts, helping to prevent fraud and making compliance far simpler.

Find out how ServiceNow Financial Services Operations can help connect your entire organization with one platform.

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