For banks and financial institutions, the stakes are higher than ever. Digital onboarding is a critical moment in the customer experience, and it doesn’t come cheap. It’s estimated that it costs banks more than $14,000 to onboard each client. Yet, according to the data, most customers fail to complete the onboarding process, which can diminish the ROI on your onboarding efforts.
That also means that financial services institutions may lose customers to competitors that have created a more streamlined experience that aligns with high customer expectations. This can drive up business expenses and make it harder to compete in an increasingly crowded industry.
So, how can you create the digital customer onboarding experience that customers crave? Below, we go over a few best practices for customer onboarding in banking.
Why is client onboarding in financial services important?
Your digital customer onboarding process is a make-or-break moment for your bank or financial institution. If you don’t create a positive onboarding experience, you’ll likely see a higher customer churn rate. In fact, research shows banks lose six out of 10 potential customers due to poor onboarding experiences.
The consequences of poor onboarding go beyond increased customer rage or frustration. Negative onboarding experiences can also lead to:
- Higher customer churn rates
- Increased customer acquisition costs
- Loss in revenue
- Lower customer lifetime value
- Lack of trust in your brand
The takeaway? Your digital customer onboarding process is key to boosting metrics such as your customer retention rate and your company’s bottom line. That’s why you want to ensure the process is as frictionless as possible. This also means that if your bank gets this right, you have an opportunity to differentiate yourself from the competition.
What are some best practices for customer onboarding in banking?
Your digital onboarding experience is your first impression. You want to make sure it’s a good one. Below, we go over a few tips for streamlining the financial customer onboarding experience.
Simplify the process as much as possible
More isn’t always better, and that’s especially true for client onboarding in financial services. Onboarding processes that require more forms and longer completion times are likely to fail. That’s because over half of customers will abandon the onboarding process if it exceeds five minutes. Additionally, lengthy and complex onboarding processes can affect your net promoter score (NPS), which refers to a customer’s likelihood to recommend your brand to others.
So, how can you streamline the digital customer onboarding process? First, put yourself in the customer’s shoes. Instead of thinking about onboarding solely from the business perspective, get inside your customer's head. Walk through the onboarding process as if you’re them and identify any friction points.
For example, if you’ve just had them upload a form with personal information, do you really need to have them enter it manually on the next page?
Do you have them start filling out forms online and then require them to come into a physical branch to complete the onboarding process, as many financial institutions still do? All of these are examples of steps in your process that can create friction.
Once you’ve identified these areas, focus on simplifying onboarding by paring down to essential steps. For example, ask customers for personal information only once, rather than multiple times. Or allow them to save their progress and return later. All of this can make a huge difference in ensuring onboarding completion and minimizing frustration.
Ensure support is easily accessible
Even if you have the best onboarding process in the business, customers are inevitably going to have questions. Make sure that help is easy to access from the beginning.
One way to do that is to implement digital banking self-service so that customers can skip lengthy call center queues and access instant support. For example, you could provide links to interactive tutorials to give customers step-by-step guidance throughout the digital onboarding process. Or consider leveraging customer service chatbots to answer customers' frequently asked questions.
Good automated customer support is critical for improving the onboarding process. 96% of customers leave a business after a single bad support experience. That means the quality of your support is critical to reduce customer churn. It can also help reduce business expenses since you don't have to hire staff to work overnight to answer customers' questions. At the same time, it ensures all customers can access the support they need at any time of day.
The bottom line? Ensuring customers can access the support they need can help reduce the likelihood of abandoning the onboarding process.
Harness the power of in-app customer support
Finance in-app customer support is critical for your onboarding process. It helps ensure that you can easily scale to meet the needs of a growing customer base. It’s also critical for meeting customers where they are. Mobile banking isn’t just a passing trend. It’s arguably the future of how your customers will carry out their banking activities.
More than eight out of 10 customers use finance apps. Additionally, 55% of Americans prefer to conduct banking activities via a mobile app. That means if you’re not leveraging apps for digital onboarding, you could risk application abandonment.
To avoid losing customers, make sure your onboarding process is mobile-friendly. For example, ensure you use a responsive design so that the necessary forms fit within a mobile screen. Also, make sure you follow fraud prevention best practices to keep your customers’ information secure. As the use of mobile apps increases, unfortunately, so does the risk of fraud or cyberattacks. Ensuring the safety and security of your customers' information and financial assets is paramount to success. Institutional trust is a leading factor in the rise of mobile banking. If your finance app prioritizes speed over security, customers may go elsewhere if it compromises their finances or personal information.
Personalize the onboarding experience
Personalized customer experiences are critical for onboarding success. More than three-fourths of customers expressed frustration with the lack of personalized interactions with businesses. That means that if your financial institution can create the tailored experiences customers crave, you can potentially distinguish yourself from much of the competition.
However, unlike other businesses, banks and financial institutions have to strike a careful balance between personalization and data privacy. The financial services industry has a lot of oversight regarding how institutions collect and use a customer’s data. That means a critical first step to personalizing the banking customer experience is helping customers understand how your institution collects data and for what purpose. Then, make it easy for them to opt in or out of what data is collected by your bank.
You might also consider leveraging multilingual support so that customers can receive answers to their questions in their preferred language, rather than the dominant language of their country or region. Or leveraging omnichannel support to deliver a consistent experience across channels to foster trust and minimize frustration, whether customers are interacting with your bank through a mobile app, your website or in a physical branch.
The key takeaway? Personalization is becoming a necessity for all businesses. However, as a bank or financial institution, you must strike a careful balance between personalized interactions, security and regulatory compliance.
Take the digital customer onboarding experience to the next level
Your onboarding process can make or break the customer experience. Banks that fail to deliver an exceptional onboarding experience may see higher application abandonment or lose prospective customers to the competition.
Banks that want to distinguish themselves from competitors should consider investing in an onboarding experience that is easy and balances personalization with security and regulatory compliance. By following some of the best practices suggested here, your bank or financial institution can streamline the onboarding process and begin the customer relationship on the right foot.
Now that you’ve read about digital onboarding best practices, you know how important it is to provide customer support end-to-end. Next, read about how you can transform your support interactions and provide the robust app emulations your agents need to solve issues with confidence. Download our one pager today.
