Research Note

Consumers want speed – A leading-edge user experience is key to onboarding success

By Richard Hartung

The bank onboarding process should be fast, as the most fundamental attribute of an exceptional account opening experience is speed

  • Banks lag far behind customers’ expectations for seamless digital onboarding
  • Financial institutions (FIs) are at risk from start-ups, other competitors and open banking, unless they deliver better experiences quickly
  • FIs can leverage design thinking, artificial intelligence (AI) and more to improve onboarding

As consumers become accustomed to ever-better customer experiences from everyday digital solutions ranging from Airbnb to Zalora, financial institutions (FIs) often struggle to offer equally compelling experiences. They will need to innovate fast to meet consumers’ demands.

What customers want – and expect

When retail banking customers sign up for new products, they expect an onboarding experience as frictionless and fast as at Amazon and Zalora. They want to compare products easily, get recommendations, click “buy” and get what they want.

The bank onboarding process should be fast, according to research from Deloitte, as the most fundamental attribute of an exceptional account opening experience is speed – “the faster an account is opened, the less likely the customer is to want improvement.” Banks need to give consumers clear instructions during account opening and deliver responses to questions quickly.

Beyond just delivering a new customer at the end of the process, a better onboarding experience can create solid brand confidence and make upselling or cross-selling easier.

The onboarding experience gap

While FIs have made progress, most banks are far from being able to deliver digitised processes and superior service consistently. That gap results in digital onboarding that fails for most customers, according to research by Experian, with the dropout rate for onboarding on digital channels at 85% compared to 15% for in-branch sales. Financial institutions in Asia have perhaps further to improve, as more than 50% of customers want digital processes and just 4% of banks say they are digitally mature, as indicated in Figure 1

Figure 1: There is a large gap between customer expectations of digital and what banks deliver

 As consumers become accustomed to ever-better customer experiences from everyday digital solutions ranging from Airbnb to Zalora, financial institutions (FIs) often struggle to offer equally compelling experiences. They will need to innovate fast to meet consumers’ demands. What customers want – and expect When retail banking customers sign up for new products, they expect an onboarding experience as frictionless and fast as at Amazon and Zalora. They want to compare products easily, get recommendations, click “buy” and get what they want. The bank onboarding process should be fast, according to research from Deloitte, as the most fundamental attribute of an exceptional account opening experience is speed – “the faster an account is opened, the less likely the customer is to want improvement.” Banks need to give consumers clear instructions during account opening and deliver responses to questions quickly. Beyond just delivering a new customer at the end of the process, a better onboarding experience can create solid brand confidence and make upselling or cross-selling easier. The onboarding experience gap While FIs have made progress, most banks are far from being able to deliver digitised processes and superior service consistently. That gap results in digital onboarding that fails for most customers, according to research by Experian, with the dropout rate for onboarding on digital channels at 85% compared to 15% for in-branch sales. Financial institutions in Asia have perhaps further to improve, as more than 50% of customers want digital processes and just 4% of banks say they are digitally mature, as indicated in Figure 1 Figure 1: There is a large gap between customer expectations of digital and what banks deliver  While more than half of customers are open to digital services, less than 20% of banks in most markets and just 4% in Asia say they are digitally mature, creating a gap in expectations (*: indicates regional average) Source: The Asian Banker research, EY, Oracle, AppWay The result is that the customer onboarding experience is falling short of customer expectations, even though FIs spend massive amounts trying to attract new customers. Designing a user experience to meet customers’ needs To overcome hurdles in onboarding, FIs need to make financial tasks simpler and easier, from the time consumers run product and price comparisons on through to onboarding and usage. The first step is having the right design approach. Rather than simply copying competitors or fintechs, FIs need to decide on the experience they want to deliver and provide it along the entire customer journey. They then need to leverage expertise in perhaps-unexpected areas, such as psychology to ensure better analysis, AI to design a superior user experience, and biometric authentication to improve speed. Along with using chatbots to answer questions, leading banks need to develop digital forms, FAQs, videos, and advice. And that design process does not stop once the customer is onboarded. Leading banks are starting to use anticipatory design, leveraging intelligent assistants to enable customers to manage their financial life better and to provide truly personalised customer journeys. The design, usability, navigation, and visuals all combine to deliver the right solution at the right time. Best Practice in Digital onboarding Superior onboarding starts with an effective home page on the mobile phone or laptop, where research shows that FIs have less than 10 seconds to persuade a consumer to stay on the site. Revolut, for instance, ensures an intuitive experience in its app, then scrolls through benefits such as free money exchange and testimonials to reinforce its reliability. Similar to Amazon and Revolut, leading FIs also use artificial intelligence and predictive analytics to figure out what consumers actually need, recommend services and answer questions. The client onboarding services run in the background, to minimise the effort the consumer needs to expend. Online lender WeLab, for instance, uses behavioural data such as transaction details and phone usage to develop chatbots that answer 75% of inquiries and robo-advisors for debt planning.   Once the consumer is ready to sign up for an account, streamlined onboarding uses biometric authentication and easy in-app uploading of KYC documents or video calls. N26 and Fidor Bank, for instance, offer immediate account access by allowing applicants to complete video-chat-based ID verification.  Personalised videos can provide a highly engaging way to let customers know details about the service they signed up for and the benefits they will get, replacing the long trails of paper communications that customers rarely read.    Regardless of where the account is opened, onboarding needs to be fast. RHB Malaysia launched Easy, for instance, as a branch-centric digital model that provides loan disbursement within 10 minutes and costs 85% less than legacy branches. Consumers can open online deposit accounts even faster at Simple Bank, as shown in Figure 1.  Figure 2: Best practice for account opening is less than 10 minutes  Even though speed is essential, 27% of banks take more than 24 hours to open an account. Leaders do it in less than 10 minutes. Source: Asian Banker research  FIs also need to offer omni-channel customer journeys so that customers who start opening an account in one channel can continue in any other channel.   The impact of user experience An outstanding customer onboarding experience has a huge positive impact on customer lifetime value.  McKinsey found that banks can achieve a 25% higher completion rate on applications on the website and sell 40% more credit cards by enhancing links to search engines, improving landing pages, conducting A/B tests to improve the user experience, and using video. Effective analytics that predict the products a customer is most likely to buy next can increase sales by 20% and success rates for lending product pitches by 20 times. Moreover, banks can increase efficiency and achieve up to 90% cost reductions by using workflow tools and digital onboarding. Protecting the onboarding experience for the future.  Along with enhancing onboarding today, banks need to prepare for the future. Although more than 80% of customers currently spend 12-15 hours researching products before they make a big purchase, according to Experian, developments in AI will reduce that time-consuming research and deliver evidence-based personalised recommendations. Banks will need to upgrade their capabilities so that consumers receive the right recommendations.	 And as onboarding gets easier, banks can gain or lose from open banking. In the European Union, the Open Banking architecture under PSD2 means that account information service providers (AISP) can aggregate customer account data from various banks and request personalised offers. When a consumer wants to open a new account, sharing secure access to their primary financial account data will allow him or her to migrate from one FI to another Case Studies Revolut  The reason why Revolut is successful, said Jakub Zakrzewski, international expansion general manager at Revolut, is that the company made it so easy to open a bank account. “Give us your details and we give you an account number.” To make onboarding easier, Revolut just asks for basic information from the applicant, performs KYC checks digitally and gives London-based Onfido customer data plus a selfie so they can make sure the applicant is the same as the person on the documents. The result is that it only takes about six minutes for a customer to open an account and receive an account number from Revolut’s partner banks. The main difference compared to competitors, Zakrzewski said, is that Revolut provides a seamless end-to-end customer experience.  To make onboarding easier, Revolut has done testing along every point of the customer journey, from downloading onwards. It clustered clients into segments based on the data it collected and came up with personas based on in-app behaviour. It then used ideas, research, A/B testing, heat maps and analytics to make sure it implemented data-driven fixes that have positive impact. It also makes sure it segregates products for different personas and reaches out with exactly what they need, proactively and reactively, using analytics, AI and other tools that predict the best solution for the client. “Under the hood, we are a very sophisticated data-driven machine that allows us to see the client,” Zakrzewski said. “  Along with all the analysis, Revolut also talks to its clients using tools such as a community page where it seeks feedback and input from customer service staff who respond to customers inquiries.   What customers get, Zakrzewski said, is access to best-in-class financial  products at a fraction of the cost, such as free international money transfers and not paying a foreign exchange mark-up.   Samsung “When we launched Samsung Pay,” said Samsung vice president Victor Kim, “every bank was asking, are you trying to become a bank. From a payments background, we take a different angle. We are a device company. Consumers want a secure experience on our platform. Our focus has been on developing a platform that enables banks, financial entities, insurance companies, to access our key features, such as biometric sensors – a seamless user experience. We are partnering with banks to provide the user experience.” One area Samsung has been focusing on is integration with the internet of things (IoT), such as voice assistants that explain how to enable features. “When you travel, you need mobile connectivity, mobile POS on a smartphone,” he said. “These are the kind of features we want to enable. We need voice activation to make it straightforward. Our angle is how to make connected devices so service providers can facilitate the consumer experience.” The common goal is how to come up with a better user experience and less friction. “That user experience is what we want to fulfil.” Implications for FIs  While a small number of FIs lead in enhancing the experience, the vast majority have low levels of digital maturity and are nowhere near what consumers see elsewhere. With new start-ups delivering better digital services and open banking enabling customers to be taken away more easily, FIs need to do more. FIs that focus on enhancing digital services and using AI to improve the consumer experience can leap ahead. Rather than modelling their services on what competitors do, though, these companies must look further afield to see what leading tech firms and startups do to deliver that superior experience. By moving quickly to act more like Amazon or Alibaba and less like banks of the past, FIs can gain a competitive advantage that grows their market share, customer satisfaction and – crucially – profitability.

While more than half of customers are open to digital services, less than 20% of banks in most markets and just 4% in Asia say they are digitally mature, creating a gap in expectations (*: indicates regional average)

Source: The Asian Banker research, EY, Oracle, AppWay

The result is that the customer onboarding experience is falling short of customer expectations, even though FIs spend massive amounts trying to attract new customers.

Designing a user experience to meet customers’ needs

To overcome hurdles in onboarding, FIs need to make financial tasks simpler and easier, from the time consumers run product and price comparisons on through to onboarding and usage.

The first step is having the right design approach. Rather than simply copying competitors or fintechs, FIs need to decide on the experience they want to deliver and provide it along the entire customer journey. They then need to leverage expertise in perhaps-unexpected areas, such as psychology to ensure better analysis, AI to design a superior user experience, and biometric authentication to improve speed. Along with using chatbots to answer questions, leading banks need to develop digital forms, FAQs, videos, and advice.

And that design process does not stop once the customer is onboarded. Leading banks are starting to use anticipatory design, leveraging intelligent assistants to enable customers to manage their financial life better and to provide truly personalised customer journeys. The design, usability, navigation, and visuals all combine to deliver the right solution at the right time.

Best Practice in Digital onboarding

Superior onboarding starts with an effective home page on the mobile phone or laptop, where research shows that FIs have less than 10 seconds to persuade a consumer to stay on the site. Revolut, for instance, ensures an intuitive experience in its app, then scrolls through benefits such as free money exchange and testimonials to reinforce its reliability.

Similar to Amazon and Revolut, leading FIs also use artificial intelligence and predictive analytics to figure out what consumers actually need, recommend services and answer questions. The client onboarding services run in the background, to minimise the effort the consumer needs to expend. Online lender WeLab, for instance, uses behavioural data such as transaction details and phone usage to develop chatbots that answer 75% of inquiries and robo-advisors for debt planning.  

Once the consumer is ready to sign up for an account, streamlined onboarding uses biometric authentication and easy in-app uploading of KYC documents or video calls. N26 and Fidor Bank, for instance, offer immediate account access by allowing applicants to complete video-chat-based ID verification. 

Personalised videos can provide a highly engaging way to let customers know details about the service they signed up for and the benefits they will get, replacing the long trails of paper communications that customers rarely read.   

Regardless of where the account is opened, onboarding needs to be fast. RHB Malaysia launched Easy, for instance, as a branch-centric digital model that provides loan disbursement within 10 minutes and costs 85% less than legacy branches. Consumers can open online deposit accounts even faster at Simple Bank, as shown in Figure 1. 

Figure 2: Best practice for account opening is less than 10 minutes

 Figure 2 Best practice for account opening is less than 10 minutes

Even though speed is essential, 27% of banks take more than 24 hours to open an account. Leaders do it in less than 10 minutes.

Source: Asian Banker research 

FIs also need to offer omni-channel customer journeys so that customers who start opening an account in one channel can continue in any other channel.  

The impact of user experience

An outstanding customer onboarding experience has a huge positive impact on customer lifetime value. 

McKinsey found that banks can achieve a 25% higher completion rate on applications on the website and sell 40% more credit cards by enhancing links to search engines, improving landing pages, conducting A/B tests to improve the user experience, and using video. Effective analytics that predict the products a customer is most likely to buy next can increase sales by 20% and success rates for lending product pitches by 20 times.

Moreover, banks can increase efficiency and achieve up to 90% cost reductions by using workflow tools and digital onboarding.

Protecting the onboarding experience for the future. 

Along with enhancing onboarding today, banks need to prepare for the future.

Although more than 80% of customers currently spend 12-15 hours researching products before they make a big purchase, according to Experian, developments in AI will reduce that time-consuming research and deliver evidence-based personalised recommendations. Banks will need to upgrade their capabilities so that consumers receive the right recommendations.             

And as onboarding gets easier, banks can gain or lose from open banking. In the European Union, the Open Banking architecture under PSD2 means that account information service providers (AISP) can aggregate customer account data from various banks and request personalised offers. When a consumer wants to open a new account, sharing secure access to their primary financial account data will allow him or her to migrate from one FI to another

Case Studies

Revolut 

The reason why Revolut is successful, said Jakub Zakrzewski, international expansion general manager at Revolut, is that the company made it so easy to open a bank account. “Give us your details and we give you an account number.”

To make onboarding easier, Revolut just asks for basic information from the applicant, performs KYC checks digitally and gives London-based Onfido customer data plus a selfie so they can make sure the applicant is the same as the person on the documents. The result is that it only takes about six minutes for a customer to open an account and receive an account number from Revolut’s partner banks. The main difference compared to competitors, Zakrzewski said, is that Revolut provides a seamless end-to-end customer experience. 

To make onboarding easier, Revolut has done testing along every point of the customer journey, from downloading onwards. It clustered clients into segments based on the data it collected and came up with personas based on in-app behaviour. It then used ideas, research, A/B testing, heat maps and analytics to make sure it implemented data-driven fixes that have positive impact. It also makes sure it segregates products for different personas and reaches out with exactly what they need, proactively and reactively, using analytics, AI and other tools that predict the best solution for the client. “Under the hood, we are a very sophisticated data-driven machine that allows us to see the client,” Zakrzewski said. “ 

Along with all the analysis, Revolut also talks to its clients using tools such as a community page where it seeks feedback and input from customer service staff who respond to customers inquiries.  

What customers get, Zakrzewski said, is access to best-in-class financial  products at a fraction of the cost, such as free international money transfers and not paying a foreign exchange mark-up.  

Samsung

“When we launched Samsung Pay,” said Samsung vice president Victor Kim, “every bank was asking, are you trying to become a bank. From a payments background, we take a different angle. We are a device company. Consumers want a secure experience on our platform. Our focus has been on developing a platform that enables banks, financial entities, insurance companies, to access our key features, such as biometric sensors – a seamless user experience. We are partnering with banks to provide the user experience.”

One area Samsung has been focusing on is integration with the internet of things (IoT), such as voice assistants that explain how to enable features. “When you travel, you need mobile connectivity, mobile POS on a smartphone,” he said. “These are the kind of features we want to enable. We need voice activation to make it straightforward. Our angle is how to make connected devices so service providers can facilitate the consumer experience.”

The common goal is how to come up with a better user experience and less friction. “That user experience is what we want to fulfil.”

Implications for FIs 

While a small number of FIs lead in enhancing the experience, the vast majority have low levels of digital maturity and are nowhere near what consumers see elsewhere. With new start-ups delivering better digital services and open banking enabling customers to be taken away more easily, FIs need to do more.

FIs that focus on enhancing digital services and using AI to improve the consumer experience can leap ahead. Rather than modelling their services on what competitors do, though, these companies must look further afield to see what leading tech firms and startups do to deliver that superior experience.

By moving quickly to act more like Amazon or Alibaba and less like banks of the past, FIs can gain a competitive advantage that grows their market share, customer satisfaction and – crucially – profitability. 



Keywords: Financial Institutions, Open Banking, AI, Digital Onboarding, Reatil Banking, Frictionless, Biometric, PSD2, KYC, Payments, IOT
Institution: Airbnb, Zalora, Amazon, Deloitte, Revolut, WeLab, Fidor Bank, RHB Malaysia, Samsung, Samsung Pay, Alibaba
Region: Asia Pacific
Guest: Jakub Zakrzewski, Victor Kim
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