Over the last few months, banks and financial services providers have witnessed unforeseen challenges due to the response to the COVID-19 pandemic. The industry is rethinking the future of digital banking, through rapid adaptation measures and a stronger focus on their digital presence as customers go online to access critical services. Business leaders are gradually recognizing the tremendous potential of digitization, and digital customer onboarding has been the buzzword in the sector. In fact, ‘digital onboarding’ attained peak all-time popularity as a search term in the context of financial services,
Fragmented customer journeys are suffering
Organizations are now noticing a myriad of challenges that underlie the traditional new client onboarding processes, their demerits in tomorrow’s market conditions. Changing policies are also signaling towards a revolution in the BFSI landscape. A recent statement issued by the Chief General Manager of RBI states that “the Reserve Bank has decided to permit Video-based Customer Identification Process (V-CIP) as a consent-based alternate method of establishing the customer’s identity.” In the era of neobanks and disruptive technologies like AI, the BFSI sector is beginning to realize the viability of operating not just normally, but better despite the current challenges.
The response to COVID-19 has amplified two major categories of demerits in traditional onboarding. The first set pertains to customer experience. Traditional processes tend to be slow, repetitive, and complicated. Low speed of delivery can cause up to 40% abandonment rate in mobile onboarding, and almost 7 out of 10 millennials demand a seamless integrated experience for services across all channels. Smooth omnichannel customer journeys are therefore becoming the norm rather than a differentiator. The second set of demerits affects the organization’s workflow internally in the following ways. Traditional onboarding:
- Involves multiple stakeholders and therefore makes processes time-consuming.
- Causes reduced field time of the sales teams, lower employee engagement, and several repetitive tasks are performed by a large fraction of the workforce.
- Can cripple service delivery and expansion efforts in today’s restrictive business conditions.
Adapt to the new normal
Digital onboarding solves some of these long-standing problems of the traditional onboarding models in the BFSI sector. It enables companies to remotely onboard new customers faster through seamless customer journeys.
This is how digital onboarding in banking solves some of the major challenges mentioned earlier:
- Automate repetitive tasks such as data entry, verification, and credit checks using RPA. This increases employee efficiency and their field time.
- Deploy AI to use data for improving workforce performance, making automated product recommendations, and delivering faster service resolution.
- Deliver unified customer views across the organization, improving the speed of service delivery which results in a faster lock-in and greater retention.
- Build-in analytical capabilities that allow managers to assess real-time performance and identify weak and critical areas of service delivery.
Moreover, leaders are now shifting from a vocabulary of ‘crisis’ and ‘post-crisis’ to phased lockdowns, in recognition of the new normal that they must adapt to, and fast. Amidst dynamically changing policies, digital onboarding equips organizations with the agility to respond to changes at the speed of information. Organizations using these solutions can sign up their customers, open their bank accounts, complete a loan procedure and their KYC within a few minutes - a process that previously took days to complete.
For banks and financial service providers where legacy onboarding processes dominate the workflow, implementing digital onboarding can be an operational challenge. This is exactly why organizations must act now, to prepare for the future. As business resumes, organizations will have to work alongside a recovery strategy, where both downtime and employee inefficiency will have an undesirable impact. Early adopters are already writing their success stories and redefining the baseline for customer expectations. This calls for a sector-wide response, and with smart solutions like digital onboarding, the BFSI sector might change forever for good.