The onboarding process for new customers is an integral component of a financial institutions’ compliance procedures. Generally speaking, customer onboarding involves gathering vital information about the prospective customer and conducting identity checks in order to comply with Know Your Customer (KYC) regulations. Financial institutions, such as banks, face the challenge of providing an excellent customer experience while meeting regulatory requirements and operating efficiently. As a result, the client onboarding process at a company will have a major impact on variables such as customer loyalty, experience, referrals, and financial success.
Customer onboarding is one of the best ways to improve customer relationships, especially when combined with other customer experience effects. It is likely that your bank or credit union will miss out on substantial opportunities for growth if it does not have a well-defined onboarding procedure. In spite of the common belief that contacting customers frequently can irritate them and make them leave your company, in reality, it is unnecessary communication with no personal value that adds to the customer's frustration that makes them leave. Since the recession of 2008, an increasing number of Americans have become distrustful of the banking system. Many people are aware that banks are becoming wealthier by using their money to create loans and realize that they are paying back said loans with alarming interest rates, which equates to losing thousands of dollars annually.
Many people, as a result, have turned to other means of investing and saving their money without involving banks, except when it is absolutely necessary. There are many people who are wary of dealing with financial institutions because they believe that they only look out for their own interests (no pun intended). Since many financial institutions (FIs) like banks and credit unions make up operational costs through deposits from the people and generate interest rates from loans to consumers, banks need customers just as much as people need a place to store their money, ultimately making it their duty to educate customers about their products and services during onboarding and continuously after to main these relationships. Customers want to trust banks and the onboarding process offers a golden opportunity to do so.
However, we have found from research that many banks are struggling when it comes to communication with their customers. A lack of communication among FIs and customers leads to a myriad of problems when it comes to onboarding new clientele. Majority of FIs reward their sales reps based on the number of accounts that they sign up, the number of loans they provide, etc, while the client is oftentimes left to fend for themselves once their business has been acquired.
The customer onboarding process does not end once a customer has paid for a product; there is a need for continuing educational programs that assist customers in better managing their finances. Fairly speaking, banks and other FIs are not solely responsible for all the unsupportive onboarding processes customers encounter. They also face a tremendous amount of challenges from the government through fast-changing policies and regulations. Regardless what the case may be though, commercial clients want to feel heard and understood by an effortless onboarding process.
As the onboarding process is the first experience that a customer has with a financial institution, it is actually a very common occurrence in the financial sector that 63 % of customers become frustrated and do not complete the onboarding process for a variety of reasons;
- The application process may be extremely complex and lengthy without adequate guidance or assistance.
- Poor communication and insufficient transparency in the application process which results in trust issues.
- Due to fragmented requests for documentation and multiple data entry, even by existing customers, there is a considerable amount of frustration from having to repeat information.
- Outdated legacy and inefficient paper-based processing methods.
- An excessively long onboarding turnaround time which impacts transactions and cash flow.
- Failure to appropriately assess and personalize products and services, which leads to customers switching brands.
- An absence of a strong omni-channel application across multiple customer interaction channels, resulting in poor first impressions.
Using business text messaging to overcome customer onboarding challenges
Building an exceptional customer experience requires banks to implement a transparent and customer-centric client onboarding process. Are new accounts still required to be created in person? Business clients of today expect to be able to conduct transactions with you whenever it is convenient for them, whether online or in person. A financial institution or bank has a number of departments that must work together to ensure that everyone is on the same page when a new client joins. These departments include credit, operations, compliance, legal, front-office risk, and tax. The Forrester Consulting Group estimates that onboarding new clients using inadequate onboarding solutions that concentrate solely on the most fundamental process components may take from two to twelve weeks. Let's examine the current challenges banks face with regard to onboarding new clients.
- Regulations are evolving and laws are stricter, resulting in a more complicated onboarding process.
- A longer onboarding cycle results in missed cross-sell and upsell opportunities during the initial engagement of the customer, when there is a high likelihood of additional purchases.
- Front-line workers are negatively affected by customer frustration due to delays, convoluted processes and bureaucracy.
Through the last five years, business text messaging software has seen phenomenal growth, fuelled by the popularity of messaging apps such as Facebook Messenger, WeChat, and WhatsApp. As a result of these texting solutions, businesses are able to connect with their customers in new ways, offering a new channel for customer onboarding. If you had the option to register for a membership or account via your messaging application on your mobile device rather than having to complete a web form without live chat assistance, would you take advantage of it?
An intelligent conversational text bot has the ability to authenticate the customer, respond to the customer's intent, retrieve necessary information, automate the journey, and send reminders or updates in response to rapidly changing regulations and policies in the finance industry. Communication solves all of the onboarding customer pain points mentioned above and simultaneously helps banks alleviate theirs as well. Banks can quickly reach out to customers on new regulations, shorten onboarding cycles by offering prompt notifications and front-line works can be met with positive attitude and feedback from customers. A texting software is only as effective as the overall customer experience strategy already in place. Both have to work together simultaneously.
Customer requests can be handled according to their pace and in their own timeframe utilizing their preferred messaging channel. Texting platforms, such as Statflo, when coupled with a CRM with omnichannel capabilities, are available at any time, remember the previous interaction or activity, and can pass on the message to a human agent or initiate a channel switch. By supporting communication through a customer's preferred channel and facilitating a seamless onboarding process, banks can improve convenience and improve customer experience as well as build trust by keeping clients informed throughout the buying process. It can also help businesses onboard customers faster and more efficiently, thereby removing many of the challenges both banks and customers face.
Relationships between banks and customers can often prove to be difficult and tense. Due to this fact, it is critical to provide a positive first customer experience and to be able to sign up customers in a transparent manner, as soon as possible and on their terms before they either change their mind or lose interest. The use of text messaging platforms provides customers with rapid response times without the delays that can be experienced with customer call support. It is also possible to automate the process so that customers get started more quickly, for example by giving them access to essential documents or information at the point of crisis.
In addition to utilizing text messaging, you can proactively engage with your existing and new customers by sending them reminders and encouraging them to return to the onboarding process so as to complete it. Book a demo to learn more about how Statflo can assist you with your onboarding challenges.