Challenges in Banking and Finance – Customer Onboarding
Customer onboarding is a critical phase where even the slightest obstacle can cause a potential customer to drop out. That’s why it’s crucial that the process runs as smoothly and seamlessly as possible. For companies in the banking and finance sector, this phase becomes even more critical because it often involves a large amount of information, documents, and paperwork, which are also subject to regulatory requirements. Erik Juhlin is the Business Area Manager for one of our business areas, Digital Solutions, and works daily with organizations looking to streamline their customer processes. Here, Erik highlights three major challenges that companies in the banking and finance sector face when it comes to onboarding customers.
1. AUse digital channels 100% of the time
One of the main challenges is to use digital channels in 100% of cases. As things stand today, companies in the banking and finance sector offer digital channels and BankID authentication for onboarding the most common types of customers. But when it comes to special cases, it is more difficult to digitize the entire process. Special cases may involve, for example:
- a business customer that requires multi-signature authorization because it has multiple authorized signatories
- a customer who is interested in several different types of products or a combination of products during the onboarding process
- a customer who wants to apply for credit at the same time
- a power-of-attorney procedure if the account holder is a minor
- a customer who is liable for tax in another country
- other discrepancies in AML data
The challenge here is that the customer is redirected away from the digital channel—for example, they receive a message stating that they need to provide additional information, fill out and submit a PDF, or that customer service will contact them to request additional information.
2. AAutomate ongoing feedback
Another challenge is automating the ongoing feedback during the onboarding process.
Cumbersome processes, administrative delays, and complex regulations result in long lead times, which often cause customers to wait unnecessarily. Much of the communication also involves manual steps.
Even if the customer has to wait during a certain part of the process, it should always be clear that the process is underway and when they can expect a response. A large part of this outbound customer communication can be built into the system and automated, but this is done far too infrequently. Instead, a great deal of time is spent automating communication to win the customer back into the process when it becomes apparent that they have lost interest due to long lead times or manual intervention.
3. AAutomate as much of customer administration as possible
Companies in the banking and finance sector spend an incredible amount of time managing and handling information, documents, and records related to regulations, and organizing them in back-office systems and archives. For a bank, this might involve, for example:
- that the customer must be registered in one or more systems
- to open accounts
- to post powers of attorney
- to file documents, such as saving the KYC (Know Your Customer) form
- to assess risk
- to verify the customer against sanctions lists
- to verify that a company is authorized to sign on its behalf
- to verify the guardianship of minors
In conclusion, an onboarding process can always be improved, and it’s best to do so in stages. As a company grows and evolves, it’s important to continue reviewing and refining the process. This requires IT tools and an organization that effectively supports your automation and digitalization strategy. It should be simple and quick to implement the changes you’ve identified to streamline the process and deliver an improved customer experience during onboarding. At Releye, we take a long-term approach, starting with the challenges our clients face, to find the best way to create an effective onboarding process that generates customer value while reducing the burden on internal resources. If you’d like to learn more, please feel free to contact me, Erik Juhlin, or any of my colleagues in Digital Solutions. We have both the tools and the expertise to help you.
Are you interested in the tools that we and our customers use for automation? Learn more atsweetsystems.se
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