Skip to main content

Secret to Successful Digital Customer Onboarding in Banking

Starting client relationships on the right foot is essential for building trust, the cornerstone of any successful banking partnership. Ensuring the implementation of Know Your Customer (KYC) and Anti-Money Laundering (AML) best practices from the outset is not just a regulatory requirement; it's a critical step in safeguarding this trust and demonstrating a commitment to security and compliance.

However, navigating the complexities of KYC and AML can pose significant challenges, potentially impacting the client onboarding experience and, by extension, the long-term relationship. One in five client onboarding applications are abandoned due to KYC and AML challenges, which impact client experience and cost banks an estimated $3.3 billion annually in lost business.  

Recognizing the delicate balance between compliance and customer experience, Tracy Moore, Director of Strategy for the Americas at Fenergo, offers an insightful perspective on redefining client onboarding. Explore how commercial banks can radically transform the client experience with multi-channel onboarding, automate client data acquisition with key integrations and unlock new revenue potential by re-allocating employee resources. 

Why Is Client Onboarding Important for Banks?

  1. An American Banker poll highlighted that 48% of banks view customer experience as their top KPI, yet a majority struggle to deliver
  2. An American Banker webinar showed that 97% believe frictionless onboarding offers a competitive edge, but over 40% are hindered by operational inefficiencies
  3. Despite digital advances, many banks' siloed, manual processes extend onboarding to 120 days for 70% of banks, leading to client frustration and abandonment, adversely affecting customer experience
  4. Onboarding is vital for establishing enduring banking relationships, positively impacting customer satisfaction and retention
  5. Streamlined processes enhance compliance and KYC procedures while showcasing a bank's digital prowess
  6. Understanding customer needs through onboarding allows for tailored cross-selling and upselling, lowering churn rates and boosting customer value
Client Onboarding Survey Results

Infographic: poll results from "The Digital Revolution: retain customers, tackle regulations & transform CX" webinar

5 Ingredients for a Successful Digital KYC & Client Onboarding Process

The best client onboarding experiences are fast, smooth and digital. It should not feel like work for either the customer or the bank to onboard clients. 

Every client onboarding journey starts and ends with data. Client onboarding delays can normally be traced back to performing know your customer compliance. However, it is the data and documentation required to support KYC that takes the longest time. Digitalizing how that data is acquired, processed and risk-assessed is the key to a seamless client onboarding process in financial services. 

There are five key ingredients you need to consider in your client onboarding checklist: 

1. Integration with CRM

Integrating an API with a CRM solution enables the new client journey to progress digitally and seamlessly from prospecting through to client onboarding, thereby reducing the amount of rekeying and swivel chair activity required to complete this process.  

2. API Integrations with Data Stores & Providers 

Before asking the client for information, banks should be able to look internally to see if that information already exists in data repositories or can be acquired through third-party data providers. Having advanced API integration capability for internal and external data stores and providers is key to this. 

3. Digital Portal 

If all other avenues of data acquisition have been exhausted and you need the prospective client to provide information, then having a digital channel where they can securely upload this information is essential. Integrating this with the KYC and Client Onboarding solution will allow information to be appended to the client profile. 

4. Know Your Customer & Financial Crime Risk Assessment 

Once all the information is collated, the commercial bank can determine how safe it is to do business with that entity/client. An integrated financial crime risk assessment can help to determine how much due diligence should be applied to the client based on their risk profile – with straight-through processing being applied to lower-risk clients and enhanced due diligence applied to higher-risk clients.  

5. Client Onboarding 

Once all checks have been conducted in line with powerful rules-based controls and final approval has been provided, the client can be successfully onboarded and start to transact immediately.  

4 Benefits of Automated KYC & Client Onboarding

Automation should be a central part of the onboarding process, eliminating redundant steps and creating a frictionless experience for clients and employees. 

After all, the benefits speak for themselves. 

By adopting a centralized and automated solution to manage client onboarding and know our customers, banks can:

1. Unifying client data into a central repository to offer a single source of truth

By consolidating all client data into a single repository, banks can streamline the onboarding process, creating a more efficient and error-free environment. This centralization ensures that all team members have access to the same information, reducing miscommunications and enabling a smoother client experience.

2. Unlocking revenue potential by freeing up resources to focus on turning low-value clients today into high-value clients in the future

Automating the client onboarding process allows banks to reallocate resources previously spent on cumbersome manual tasks to more strategic initiatives. This shift in focus can help nurture relationships with existing clients, potentially transforming them into more profitable accounts over time.

3. Reducing system hand-offs and data duplication, making teams more organized around completing high-value work tailored to the client’s needs

Automation simplifies the onboarding workflow by minimizing unnecessary system transitions and eliminating repetitive data entry. This efficiency not only saves time but also allows teams to dedicate more effort to understanding and fulfilling client-specific requirements, ultimately delivering a more personalized and effective service.

4. Eliminating abandonment of the client onboarding process

A streamlined and user-friendly onboarding process significantly reduces the chances of potential clients abandoning the process due to frustration or confusion. Making the initial stages of client interaction seamless encourages more sign-ups and fosters a positive initial impression, which is crucial for long-term engagement.

How to Get Started With Digital Client Onboarding

Fenergo offers streamlined and enhanced processes for financial institutions focusing on simplifying the client lifecycle management process, ensuring compliance, all while improving the client experience.

If you're interested in seeing how Fenergo can benefit your business and streamline your onboarding processes, request a demo.