Taking the friction out of Digital On-boarding

Almost every bank is trying to put together the digital onboarding transformation jigsaw in bits and pieces. This is no longer an item for the wish list, but a necessity. Many banks such as Barclays and DBS have made significant investments in their digital onboarding processes. Some banks are leading the curve, while others are yet to catch up.

While almost every bank provides digital application options, large numbers of retail customers are still more comfortable in opening new products at physical branches. Inefficient digital onboarding processes are creating friction for customers – and that encourages inertia and continued use of branches.

An article I recently came across also raises concerns as to why digital onboarding is yet to become the customer's preference.

“55% of respondents said they would be more likely to apply for new products or services if they could complete the entire application online” – Internationalbanker.com

To overcome process friction, it is crucial that banks design the process keeping in mind the following two factors as fundamental expectations customers have from digital onboarding:

a)     applications should be less time consuming and

b)     the process should be less complex.

By failing to deliver better experiences, banks risk customers dropping out, reverting to the more expensive branch channel or moving to a competitor. On the contrary, banks can significantly increase digital onboarding if the process is streamlined involving a few simple steps. 

Leveraging modern digital technologies is crucial. Here are few examples:  

1) Unique Customer Identity (by using cookies, ad identifiers & 3rd party data) – used to create a single customer view by bringing together data of an individual across channels and devices throughout the total customer journey. Connecting different online & offline data sources whether it is CRM, marketing and ad platforms, or e-commerce software into a single customer profile allows banks better understand and target customers. 

2) Gamification – applying game principles and mechanics to engage and motivate customers to perform specified activities or change the behavior of a target group. For example, Emirates NBD (a bank with $122 billion in assets) created a feature where customers had to open a special fitness account with the bank’s mobile app, synchronize it to compatible fitness devices and achieve daily goals in number of steps. With 12,000 steps per day, customers could earn a 2% interest rate. This managed to bring $4.37Mn in savings. 

3) Artificial Intelligence (AI) can help provide seamless customer experience especially in the concluding steps by analyzing the inputs and proactively providing appropriate information and recommendations. It can help prevent dropouts by pre-emptively identifying the appropriate support channel when needed. AI can even provide predictive analytics to trigger early warning in targeting customers in need of activation help after fulfilment. 

4) Identity Document Validation Technologies (IDVT) for identity authentication – using smart devices like card readers, smartphones, webcams etc. It typically involves a four step process:

a) obtaining picture of the id proof document

b) obtaining a picture of the applicant

c) matching the applicant with their id document

d) ensuring  information on the document is authentic and not fraudulent 

5) Optical Character Recognition (OCR) and Natural Language Processing (NLP) integrated document-reading apps – helps reading printed and handwritten texts, symbols, barcodes, machine readable zone (MRZ) codes, signatures etc. from multiple sources  (like an ID-card, bankcard or driving license ) with a smart device (like mobile phone, digicam) and then capturing the data digitally. This well-established technology is continuously finding new uses and adding new features with recent innovations. 

6) Dynamic Knowledge Based Authentication (Dynamic KBA) – provides a high degree of assurance in identity proofing that new and otherwise unknown individuals are who they claim to be. Here "out-of-wallet" questions are compiled real time from public and private data sources (like a customer data agency) such as marketing data, social media, credit reports, transaction history etc. This typically helps in case of applicants with limited credit histories such as younger customers. 

7) Virtual / Augmented Reality (VR/AR) – a virtual bank or virtual banking officer with the ability to interact like a real branch. Employees can assist in account openings, loan application processes or investment advisory services presented through digitized visuals and simulations, personalized with AI to fit the customer’s specific needs. For example, an AR app from Australia’s Commonwealth Bank uses real estate data to enable potential homebuyers view detailed properties for sale profiles as they pass by them in a street. An added loan calculator can help connect the potential buyer immediately and help onboard him digitally.

The relevance, ease and simplicity of the initial experience drives application completion rate significantly and help banks build a digital relationship with new customers. To stay ahead in driving digital adoption and save customers from the need to visit physical branches, marrying the right technology with the right strategy is crucial.  

What do you think?