Opening an account can be an emotional experience for all concerned. Which is why Peter-Jan Van De Venn Strategic Director at Mobiquity, is studying the onboarding processes at European banks to inform those future ‘first kisses’
Digital consultancy Mobiquity was given a blank canvas by Bahrain-based Bank ABC when it called in the experts to help create Ila, the first Cloud-based, digital-only bank in the Middle East.
And with a brief to target the more than 100 million tech-savvy Millennial in a region where half of all business owners are aged under 35, two things were immediately crystal clear – the neobank had to deliver groundbreaking levels of technology and the customer experience (CX) had to be seamless.
Mobiquity’s development team subsequently conducted detailed research of the target market in Bahrain to understand people’s goals, struggles, fears and ambitions, analysing some 30,000 user reviews.The results demonstrated the need to provide holistic personalised financial solutions built around customer needs and aspirations, and aligning products and services around their lifestyles – in short, going beyond banking.
Vitally, that all had to be under-pinned by a future-proofed technology infrastructure. Backbase was chosen for Ila’s software platform and Jumio’s artificial intelligence (AI)-powered face biometrics software selected for identity verification. Jumio’s technology enables the bank to verify online customers in minutes by having them first capture a picture of their government-issued ID with a smartphone and then take a selfie, with certified liveness detection functionality.
This process ensures that the customer is who they claim to be and are physically present during the onboarding process, thereby keeping Ila compliant with strict local know your customer (KYC) and anti-money laundering (AML) mandates. As Bank ABC expands its digital operations globally and in the MENA (Middle East and North Africa)region, Jumio will be able to support that growth with its ability to verify IDs digitally across many different geographies.
And why is such slick onboarding so important? Peter-Jan Van De Venn, strategic director at Mobiquity, which itself announced a partnership deal with Jumio last May, believes it is now vital to successfully growing a business. That’s even more true as digitisation is rapidly accelerated across more areas of our lives, fuelled by changes caused by the COVID-19 pandemic. The quality of that ‘first kiss’ with potential customers has never been more crucial than it is right now.
“Customer experience is key and so it’s very important that banks are able to cope with the high expectations of today’s digital customer experience. That means that they need to have a frictionless onboarding process,” Van De Venn explains, “otherwise, what you typically see is that people will just ‘drop off’. Onboarding is the process with the biggest drop-off rate in banks, so the better and easier yours is, the more clients you will get. It’s a big challenge to do it well, though, because it is still necessary to get a lot of information, so the easier you can make it for clients, the better.”
Indeed, research shows that more than 40 per cent of potential customers will abandon the onboarding process if faced by cumbersome and time-consuming steps in setting up accounts.
The huge differences in the ease and speed of opening accounts at 12 UK banks, including neos and incumbents, were also the subject of a study earlier this year by app experts Built For Mars.
It found that opening an account with digital challenger Revolut took 24 clicks but it took 120 clicks to do the same at internet and mobile-only First Direct, which is owned by HSBC. There were also stark differences in the times taken for accounts to be operational, with the definition being able to use a PIN and a card, as well as having online access to the account.
Barclays, Monzo and Starling took two days, Lloyds, Metro Bank and Revolut took three, while the slowest were First Direct at 15 days, Nationwide at 22 days, and HSBC at 36 days. Another recent survey of European banks by digital identity verifier Fourthline found that there was a widening chasm between consumer demand for a fully digital experience and legacy bank processes that do not meet customer needs nor adequately prevent fraud.
European financial institutions – specifically traditional banks – must reconsider their onboarding models to accommodate rising consumer expectations for a simple and smooth, fully digital experience, Fourthline concluded.
A real case for digital
Mobiquity has also been doing its own research into the levels of digitisation of onboarding processes at banks in the UK, the Netherlands, Belgium, Germany, Switzerland, France and Austria. It defines digital onboarding as being able to open an account for a new client without the need to provide any physical documents and/or to visit a branch.
Giving a sneak preview into the study’s findings, Van De Venn reveals that small and medium-sized enterprises (SMEs) were particularly underserved by the banks. And he warns: “Banks need to take a human-centric approach to digital onboarding, to speed up their digitisation process for SME clients – simply because their customers expect them to. These clients have high standards when it comes to digital servicing. In their daily lives, they have frictionless customer journeys and effortless customer experience when they use big tech services like Google.
“Furthermore, personal digital banking standards are quite high, so SMEs’ customers expect similar experience in business banking. The competitive pressure is mounting as well, brought on by the challenger banks, like Bunq, Holvi or Revolut, which offer high levels of digitisation and onboard their business customers fully digitally.”
But still, many banks have yet to offer that – a fact that somewhat perplexes Van De Venn.
“I still don’t know the full answer,” he confesses. “It might be because there are still banks that believe in the personal touch, and still want to see the client. There are also areas
where regulation might be an issue, especially in business banking – we see a lot of banks getting fined these days for anti-money laundering violations. So, in terms of business, the bar has been raised, I think, to do it fully digitally.
“But, for me, it’s very simple; if there’s one bank that can do it, in a certain regulatory environment, then others should be able to do it, too.”
He acknowledges that ‘automating costs money, so the bank needs to be able to present a business case’. “But the more clients you onboard, the better the business case is to automate the process.”
The all-important second date
While emphasising the importance of the ease of first contact with customers, Van De Venn says Mobiquity’s methodology is to continue to work closely with clients even after the systems it has designed with them go live. That’s important to improve the ongoing customer experience – for instance, eradicating previously unforeseen pinch points that might cause customers to abandon the process.
“The journey doesn’t stop when you build a digital onboarding process,” he says. “After go-live, we use analytics to measure how it’s performing. You can, of course, ask your client, but it’s even better to observe them, because then you can see behaviours. You can see where in the process people are hesitant, where the most drop-offs are. You can see, if you observe certain process steps, what happens in real life, measure it and make it better.
“There are a lot of ways to automate. That’s not the issue. Really listening to your client, incorporating that feedback and making sure that you can easily adjust and do multiple releases in a short timeframe to make things better, that’s what’s really important. To my mind, that’s true innovation.”
Summarising the case for banks to offer fully digital accounts, Van De Venn points to three compelling reasons.
“Firstly, automation makes client onboarding frictionless, so customers are happy. Secondly, if you automate, it makes the bank happy, because there is less operational impact – if it’s all digital, costs go down. And, thirdly, regulators are happy because an automated process is really controllable, it’s auditable and it’s consistent.
“That’s actually what I most like about what we do. It’s not just a win-win; it’s a win-win-win.”