Digital onboarding: a lever for commitment by bank customers
With some delay, the digital era has finally reached the whole of the banking sector, which is now able to offer the range of remote services long-awaited by its customers. But what about the customer onboarding phase? Challenged by neobanks and fintech companies with the availability of an entirely digital subscription process, traditional banks are now attempting to make up for lost time. In fact, in the space of two years the digital journey has gone from being something desirable to being a necessity. It is now one of the key factors for the acquisition and loyalty of new customers.
Digital onboarding, a challenge for competitiveness
According to a recent study by PwC [1], 20 to 25% of customers would prefer to open a bank account via a digital channel but are forced to do so in a branch. Customer onboarding in the banking sector, whether to grant loans or open an account, has in fact always proved to be largely dominated by visits to a branch. This is even the case in a partially digitised process in which subscribers provide their data to the bank beforehand via a digital form. Fully digital onboarding on the other hand enables prospects and customers to subscribe to any remote banking offer, when they want to and without ever having to enter a branch.
“Digitisation of onboarding necessarily involves the flexibility, simplicity and speed of the banking customer journey and the credit decision, without undermining the personalisation of the relationship or risk control,” explains Frédérique Boyer, Associate Director of Xloan by Open. The onboarding phase has therefore proved to be a major challenge for the sector: faced with the increase in the number of neobanks and after the arrival of online banks, so-called traditional banks must stay competitive. “And end-to-end digitisation of customer journeys inevitably favours the commercial success of banks, as it makes it possible to reach new prospects,” adds Frédérique Boyer.
Open banking: the key element for optimising the customer experience
The entry into force of the Revised Payment Services Directive (PSD2) in 2018 greatly favoured an improvement in customer experience as regards digital onboarding by banks. The PSD2 rules are in fact intended to force banks to give access to their customers’ data to all banks. But to improve the customer experience in the sector, it was also necessary to combine these rules which are favourable to open banking with the use of new technologies. “Bank aggregation APIs, platforms for secure data exchanges, make it possible to retrieve all of the banking data of customers or prospects, even if they have several accounts in different banks. By including this type of solution in a loan application journey for example, we can speed up the subscription process considerably and thereby improve the customer experience,” explains Angélique Renier, project manager at Xloan by Open. Furthermore, retrieval of data and documents by customers is very often a reason for postponing the commercial journey, or totally abandoning it. Thanks to bank aggregation, prospects no longer have the tedious task of finding proof of domicile and other financial information that requires effort, by downloading, scanning or taking photos.
Another factor based on open banking that favours the flexibility of the journey and an immediate response for customers: the refinement and automation of scoring. Thanks to the sharing of banking data, banks are no able to study, not only a larger amount of data, but also non-financial and recent data. As Stéphane Coutineau, Product Owner at Xloan by Open, states, “the use of scoring algorithms in connection with granting loans leads to faster and more accurate examination of the prospect’s situation, and therefore to a response by the bank within a short time limit”.
Conditions for successful digital onboarding
Clearly a bank onboarding portal must include all of the solutions required for a seamless customer journey that endeavour to remove elements that annoy customers at each stage. As such, the onboarding platform must make it possible to centralise all of the customer data, which in addition will be accessible to brands in real time in a web-to-store and store-to-web approach, as well as to customer advisers in a phygital journey approach. “Thanks to the automation of tasks and a seamless journey, the bank no longer needs to enter customer information several times and is able to provide a response much more quickly than traditionally” states Frédérique Boyer. According to the Associate Director of Xloan by Open, a fully digital journey even makes it possible to reduce the response time for customers to one day for consumer loan applications and a few days for a mortgage. Finally, to offer a seamless journey, the portal must necessarily be cross-media and meet the mobility requirements of customers who want to start onboarding on their smartphone, continue on their computer and complete it on their tablet.
Flexibility and simplification of the user experience must not however be acquired at the expense of transaction security. For Angélique Renier, “it is essential that a strong authentication process is used to access the onboarding portal (in line with the method imposed by PSD2 for payments). Similarly, each technical solution that helps to improve the user experience – bank aggregation, document recognition and electronic signing – must comply with the security standards required in the banking sector”. It should also be stated that a fully digital journey must not rule out recourse to an adviser, for example if the project is particularly complex. Finally, as is emphasised by Stéphane Coutineau, “the digital onboarding platform must allow customers to know exactly what stage they are at in the offer subscription process. What documents must they sign or fill in? Has the loan offer already been received?” All of these are key stages, about which customers must be clearly informed on the platform and by email or SMS.
The use of fully digital onboarding is therefore proving an important means for banks to increase their market shares while optimising customer journeys and the customer experience. And these are not the only benefits for financial institutions which can also count on a considerable improvement in their risk management and KYC.
