Are digital investments in Consumer Onboarding reaping enough success?

Is it too frustrating to wait for an outcome on your mortgage, credit card OR a personal loan application? New age customers, expect a ‘Near real time onboard and transact’ experience and don’t shy away from opting out of the application process if they experience excessive waits. Not to mention, this leads to high abandonment rates (~50-80% in cases) and poorer CSAT (customer satisfaction) metrics resulting from complicated application processes, multiple manual hand offs and paper based processing! Banks need to realise that a ‘Customer onboarding journey re-imagination’ effort can help unlock significant value while simultaneously delivering growth, cost and experience benefits

With changing customer behavior, most banks have invested heavily in various digital initiatives such as analytics, core banking platform upgrades and digitization of the customer facing channels. However, banks often adopt a siloed approach to solve for the immediate and tactical aspects (e.g. Responsible Lending in Australia) and miss out on the larger picture. This results in varied levels of process/digital maturity and a fragmented onboarding offering across their front, middle and back office functions.

Think of it - a highly matured product origination and customer onboarding workflow platform can certainly help reduce product origination timelines, but would be of little use if the banks cannot get enough new customers to visit the branch/website and apply for a product! Similarly, a seamless application capture process with an integrated omni channel offering would be of no help if the middle and back office operations have multiple manual hand offs

Case in point are the middle and back office functions which manually process applications for the Consumer banking asset class such as mortgages, personal loans and credit cards. While banks have most of the data for their existing customers, ‘New to bank’ customers have to submit all paper work including their address, expense and income proofs that leads more iterations (typically 3-6 per application), application processing costs and higher wait times (>5-6 days for Personal loans and >10-12 days for mortgages). This is one of the key reasons why there is a strong inertia to stay with the existing bank!

While the focus on making digital investments picks up steam, banks should look at directing their energies towards understanding the opportunities that will help drive top and bottom line growth through a speedy and hassle free onboarding experience. Banks should focus on designing their customer journeys such that they appeal to the digital citizens (which is increasingly becoming a major customer segment) and address ‘Revenue Growth Enhancement’, ‘Operational Excellence’ and ‘Compliance adherence’ realms.

Non-bank players such as Prospa, PayPal, Banjo and Avant offer a seamless personal and business loans origination experience wherein consumers can pick and choose the loan features and experience a significantly shorter turn around when it comes to application approval and disbursements.

Digital investments on new age technologies such as BlockChain, Machine Learning, Artificial Intelligence and NLP/NLG need to be put through the extensive ‘Use Case applicability’ lens so that banks can leverage them to transform their customer onboarding and product origination experience. An all rounded review of the existing offerings and transformation of the E2E customer journey (based on consumer behavior) right from campaign management, marketing analytics followed by seamless application initiation, compliance/credit checks, near real time application processing, fulfillment and enablement is the need of the hour for the banks to achieve a sustainable competitive advantage.

If banks don’t keep up to the ever evolving customer expectations, their customers may very well opt to switch to a competitor bank or even a Fintech! Do you agree?