Posted by Customer onboarding with digital account opening is the first and foremost element of any bank or financial institution. While there are still plenty of banks that follow the face-to-face, in-person authentication checks, a new wave of Financial Institutions (FIs) is investing in digital account opening.
Account opening experience of any given FI, whether digital or traditional, serves as the first impression to the consumer. The comfort and speed of account opening provided by banks can be a factor that determines the loyalty of the consumer. The financial world is increasingly leaning towards easy and fast business operations.
For instance, startups or small businesses often require emergency funds and will naturally choose FIs that provide a smooth and quick account opening service for a loan application. Some banks may offer a semi-digital experience wherein the customer might have to visit the branch for in-person authentications.
Such practices can lead to customers abandoning the process due to the added hassle of visiting the branch. With digital account opening, digitalization and technical prowess simplify the process.
Modern OCR technologies are able to auto-fill the customer details using document proofs, thereby speeding up the process. Automated back office verifications, in-person verifications through webcams and regulatory compliance enables all the necessary checks to be performed effectively. On top of that, a clean and simple interface makes it easy for users to interact with the application and open their accounts within minutes.
Ever since the pandemic has hit us and social distancing is becoming the new normal. Online account opening rates have spiked by an estimated rate of 15%. Extending a contactless digital onboarding experience is the key offering banks are opting for. For the purposes of safety and convenience, providing an end-to-end digital account opening service is essential.
According to a 2019 survey, over 50% of the FIs claim to be offering a digital account opening service. And the number has been increasing since the social distancing policies are in place. This indicates an obvious and urgent demand for online account opening services.
An estimated over 200 million people in India claim to have digital-only accounts. Technological innovations and digital experiences have changed the way customers seek financial services from banks.
Mobile-based contactless account opening can be a significant service to the consumers. Fintech companies are aiming for a flawless customer onboarding service for everyone, using just a mobile phone. As a growing number of transactions are taking place on smartphones, digital account opening can largely benefit from the same.
With such ease of onboarding customers, banks can focus on cross-selling other products to the customers with minimal process and duration. For instance, customers onboarded using online account opening can easily apply for loans, reducing the overall TAT (turn around time) from application to for loan sanctioning.
Enabling a digital account opening service, in a contactless, end-to-end manner can make you stand out and shoot up your customer onboarding rates. Moreover, banks can generate vital statistics regarding customer onboarding to help boost the numbers, like conversion rate, drop-off analysis, cost per onboarding, and more.
Remote working and social distancing are here to stay, hence going digital for onboarding customers is the go-to way to reach new consumers, especially the millennials. The competition in digital customer onboarding is a tight one, and FIs have to make sure they use the most cutting-edge technologies, user-friendly interfaces, speed up verification processes, and improvise the customer relationship experience to win the race.
Customer-focused applications that provide easy digital account opening can be a powerful tool to have. Pandemic has taken the digital world to a new height and the fintech world is rapidly making the most of the tech-based, smart processes. It’s after all the perfect time to modernize digital account opening for banks and onboard customers at a faster pace.
(This article is written by Praveen Paulose, MD and CEO – Celusion Technologies. The views expressed in this article are of the author.)