The Onboarding Process

Onboarding is the term used to describe the process of incorporating anyone into your system including customers/clients, end users, employees, vendors, etc.

The basic process unfolds like this:

• The onboarding request. This can be as simple as a customer requesting to open an account or more complicated (such as loan applications). The request is received by the bank and the new customer is put into the system.
• Data capture happens. This includes the information entered into the application form by the customer, any documentation they provide, and identifying information. In most cases this includes pictures, and in modern times it can also include biometrics.
• Due diligence. The bank checks the person is who they say they are, does background checks if need be, etc.
• Account set up. The customer is put into the system and their account(s) are set up for their use.

However, digital onboarding is not without its challenges. There are a few potential pitfalls that can cause problems. One of the most common is incorrect or incomplete data capture. This can happen if the customer provides inaccurate information or leaves out important details.

Another potential problem is security breaches. If the digital onboarding process is not properly secured, it could allow hackers to access sensitive customer data. Finally, digital onboarding can be slow and cumbersome if the process is not well designed.

Despite these challenges, digital onboarding is a powerful tool that can help businesses improve efficiency, accuracy, and the customer experience. When done correctly, digital onboarding can help businesses grow and thrive.

The Benefits of Digital Onboarding

The most obvious advantage to digital onboarding is efficiency. The process takes place online and can be completed remotely, removing the need for customers to come into the office or wait for snail mail. Digital onboarding is more efficient than traditional methods, both for the customer and for the business.  Let's explore some additional benefits of digital onboarding in more detail:

Meet Customer Expectations

Customers today expect to be able to go to a bank's website, click on "Open account" and initiate the process. Meeting this customer expectation is vital; many customers who discover they have to come to a branch will simply go find another financial institution that offers digital onboarding. In today's digital world, customers expect a fast, easy, and seamless experience. They aren't willing to fill out long forms or submit extensive documentation. Digital onboarding delivers on these expectations.

It also means that your employees have time to answer customer questions and handle their concerns. Customers are less likely to be stuck on hold because your employees are dealing with routine onboarding matters.

Provide Efficient Service

Digital onboarding is typically much faster. There's no need to worry about schedules, no need to wait on the mail (which can be slow and carries the risk of document copies being lost and having to be re-sent). Many customers are in a hurry to get their account opened, and cannot wait until this lengthy process is complete. It is also much faster for the institution.

Increased Customer Acquisition and Retention

Digital onboarding allows you to provide an on-the-go experience for your customers, which in turn improves lead conversions. Not only does this help streamline the process of getting new clients signed up and ready with all their information needed, but it also provides a better experience. A quick and easy sign-up process sets the tone you need. Potential customers are more likely to go through with registering. They are also likely to tell their friends how easy it was to work with you, potentially giving you vital word of mouth referrals.

The positive experience can also increase retention rates. By kicking off the relationship with a good impression, and continuing to provide a positive experience, customers are less likely to leave for another bank or credit union. Many people will stay with the same bank for years as long as they are treated well, but the days of bank inertia are long gone. You can no longer assume that you have customers for life.

Increased Efficiency

Traditional methods such as paper forms and signatures take time and cost money. Even the cost of printing forms can rapidly add up. Handling everything digitally saves time and makes the process faster and more convenient.

The ability to automate certain tasks also lowers costs by reducing the need for manual input. There is no need to hire clerks to do data entry or have employees stay late to finish it.

Digital Onboarding and Banking

The digital revolution is changing the way we bank. As more and more banking activities move online, digital onboarding becomes an important part of the customer experience. In fact, online only banks have become sufficient for the needs of many customers.

Improved Customer Experience

By making the sign-up process quick and easy, digital onboarding attracts new customers and encourages them to stick around. In addition, it might automate certain procedures, increasing efficiency and freeing bank employees to focus on more essential tasks such as enhancing customer service. This leads to improved operations as well as a far stronger connection with clients.

Fraud Reduction

It might seem as if digital onboarding would increase the risk of fraud and make it easier for a new client to not be who they say they are. However, a proper digital onboarding process provides more tools to check the person's identity, such as livecheck, online interviews if needed, etc.

Increased Effectiveness

Nobody wants to spend time on paperwork. With digital onboarding, bank employees can devote themselves to more important tasks.

Also, customer data goes straight into a centralized database that can easily be accessed by staff as they need to, whether they are in the branch or in some other location. Finding everything becomes easier and faster.

Reduced Branch Locations

Some banks don't even have branches but have a deal to give customers access to ATMs. As society becomes more and more "cashless" even that becomes less important. This reduces costs substantially. Representatives can work from home, which increases your access to first rate talent.

Alternatively, branches can be converted into more attractive "lounge style" space for handling business in comfort. But for most banks, reducing locations is a good idea, especially if locations have become redundant after a merger or sale.

Improved Compliance

Reducing errors in the onboarding process helps with compliance with regulations, and modern encryption ensures that you are up to date with FFIEC encryption and information security requirements. Compliance issues can cause massive fines and customer loss. Manual entry processes often have inconsistent or ineffective internal controls.

Improved Agility

A digital onboarding process allows you to adapt to changing regulations and shifting market demands, including rolling out new products quickly. We no longer live in a world where banks can sit on a few core "traditional" products such as checking accounts and mortgages. You can also target customers to increase awareness of new products they might find useful.

Given customer expectations, rapid change, and the overall move away from brick and mortar to handling more and more of our lives online, banks that don't do digital onboarding are going to be left behind.

Although digital onboarding is vital, not all banks or credit unions have managed to find the right solution to achieve a smooth digital onboarding experience. Many have siloed digital channels such as online banking, mobile banking, and call center digital support. Others are still relying on a fax or an email to send account opening paperwork to the customer. Still others are providing digital experiences that are disconnected from the overall customer experience.

So what do you need to consider when designing your digital onboarding process?

Need Help With the Onboarding Process?

The onboarding process is the first impression your new customers have of your financial institution. It's critical to make it a good one. In today's digital age, your customers expect to be able to sign up quickly, without jumping through excessive hoops, and without leaving their computer or phone.

This is where Cotribute can help. Cotribute is a digital customer acquisition platform for credit unions and banks. It's designed to offer you instant account opening, digital loan application, improved analytics, automated cross-selling and streamlined commercial banking services. We help you compete with neo-banks and online services to acquire new customers.

If you are interested in digitizing your onboarding process, or are unhappy with your existing digital onboarding solution, contact us to schedule a demo today.

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