It’s not often I am surprised by the results of surveys on financial services. However, our recent research involving top-level U.S. banking executives turned up some unexpected findings.
More than 100 executives representing senior decision makers – including chief experience officers, vice presidents and directors – took part in the research, whose results revealed a concerning disconnect when it comes to banks’ onboarding processes, technology investments and customer satisfaction.
It’s widely known that the onboarding process is one of the most challenging for banks, due to the increasing complexity of anti-money laundering, Know Your Customer regulations and legacy system constraints that create barriers to seamless customer identity authentication and due diligence. But customer expectations continue to rise, fueled by fintechs that can more easily bypass these challenges and offer more seamless digital experiences.
The survey confirmed this opinion, but a third of respondents said it still takes more than a week to onboard new customers at their financial institution, and sometimes it takes months. Not surprisingly, almost half of executives confirm they want to accelerate onboarding and a third want to improve it. Yet it ranks low on their list of priorities for 2022.
Customer onboarding is a key income generator, so high abandonment rates reflect a huge lost opportunity for new customer acquisition, retention rates and revenue. Peter Wannemacher, a senior analyst at Forrester, reported in a webinar that abandonment rates for online banking applications are at 97.5%, an all-time high. Think of the money that has walked away from your bank.
When asked which aspects of customer onboarding challenge their people, processes and systems, 40% of respondents said their biggest headache isrelated to identity validation and verification, and slightly fewer said lack of visibility.
It’s obvious that financial institutions must make smarter investment decisions when it comes to the latest technologies to address these challenges. For example, banks can find a better way of completing ID validation and verification through using artificial intelligence, liveness detection and facial-recognition technology.
There’s also proof-of-identity technology, which can quickly extract data from ID documents (driver’s licenses, passports, state/county IDs, etc.), supporting documents (utility bill, income statement, birth certificate, etc.), verify the documents, and verify that the person applying matches the ID card through biometrics. This process validates that someone is who they say they are, which protecting your financial institution from inadvertently onboarding a fraudster.
The second surprising outcome of our survey is that more than a third of banking executives aren’t sure if they are getting good return on investment from their digital transformation investments. That’s despite the fact that more than half of respondents saying they will spend more on automation next year. Does this mean they’ll be throwing more money at tech that they don’t know is working?
Unfortunately, many financial institutions don’t do conduct the proper due diligence before embarking on a digital transformation project, and outcomes like what we see in our research are the result. By doing a proper, data-centric analysis, using process mining and discovery solutions, financial institutions can pinpoint exactly where and how to automate their processes and have a real-time view of performance after implementation to discover their true ROI.
It seems that management may not be investing in the right innovation to help their key challenges, and that this is ultimately causing this disconnect. For example, only two-thirds use robotic process automation, fewer than half of respondents use AI, and a mere 10% use process intelligence technology.
Financial institutions’ day-to-day operational processes may become unnecessarily complex, adding time and cost to routine tasks and impeding the delivery of responsive customer service. Intelligent customer onboarding automation using process and content intelligence can help enhance compliance, speed up processing and improve customer satisfaction, while increasing revenue. It’s just a matter of investing in the right tech.
Cheryl Chiodi is the director of solution marketing, financial services, at ABBYY.
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