Marketing departments work hard in our busy digital world to sell their company’s product, but it’s fair to say they’re often hamstrung by high abandonment rates because the onboarding user journey is simply too arduous.
Whilst this was a problem pre-pandemic, it’s been supercharged by the consequences of COVID-19. Even the most reluctant consumers have been forced to become digitally savvy due to repeated lockdowns, and they now expect the same convenience and ease they experience with the GAFA companies across the board.
A 2020 study by Signicat, conducted at the height of the pandemic, found that European financial institutions are losing almost two-thirds of applicants during the onboarding stage. Breaking this down further, 26% of respondents classed the onboarding process as "difficult", whilst over a quarter (28%) said it’s longer than expected.
The Digital Banking Report 2020 also revealed that abandonment rates increase significantly as the time to complete an application increases. If the process takes over ten minutes for opening an account online, or five minutes for a mobile process, the abandonment rate is as high as 40%.
More recently, research by Thomson Reuters revealed that an eye-opening 89% of customers go through an onboarding process that creates friction and frustration. As a result, 13% choose to switch to a competitor.
Technology and data prove valuable teammates
Thankfully, there’s now customer acquisition technology available that can help organisations of all shapes and sizes to streamline the onboarding journey and provide applicants with a better experience.
A study by IHS Markit predicts the business value of artificial intelligence (AI) and machine learning to the financial sector will reach $300 billion by 2030, whilst Gartner believes that income derived from these technologies will triple over the next few years.
With the Open Banking movement growing in stature by the day, there’s a wealth of rich transaction data and other third party data available that can be fed through these advanced AI-enabled analytical tools to unlock a range of benefits, including:
- Automation – taking people and paper out of the customer acquisition process, and therefore speeding it up and lowering operating costs.
- Precision – authentication, compliance, and credit and risk decisioning all become more precise, leading to better decisions.
- Engagement – the application is streamlined and the process is completed quickly, leading to more customers.
Helping a banking giant over the finish line
Here’s an example to illustrate what’s possible. We recently worked with a Tier 1 multinational bank to help it reimagine its bank account opening process for its sole trader and SME customers.
When we first started talking to the bank, customers were still having to go into a branch to fill in the necessary paperwork, which was increasingly tough during the pandemic. It invested in a digital channel, but initially there were 90 questions in the onboarding process, which was having a negative impact on the bank’s customer acquisition strategy.
Working in tandem with the bank, we used our range of third-party sources to understand what could be automated, and what could be removed from the user journey. We reduced the number of questions down to 28 by implementing automation in two ways.
Firstly, by absorbing an applicant’s ID card via a selfie-based ID process, our system took a host of personal information, such as current address, nationality, gender and date of birth, meaning the user didn’t need to input these answers. This eliminated the need for some of the more basic questions.
The second valuable piece of automation was powered by Open Banking, which provides accurate, real-time financial data based on the applicant and their firm’s financial behaviour. Once the user gives their permission, the Ezbob system scours over 40 sources to determine financial transactions and history in order to pre-fill answers.
Open Banking also allows us to conduct a detailed yet rapid risk analysis incorporating traditional credit bureau data, but also multiple other sources to check where the sole trader is registered, their credit history and so on.
The final online journey can now be complete in less than ten minutes, compared with the weeks it took before we embarked on the process together. By harnessing the latest technology and the data-rich Open Banking environment, we’re helping the bank to get over the line much quicker.
Partnering with Ezbob
Ezbob Express is a high-speed, data-driven customer acquisition platform. Its advanced cloud-based modular design offers unmatched deployment speed and flexibility – exactly what’s needed to stay at the forefront of customers’ thinking.
It’s enabled us to move beyond lending and account opening solutions to offer our clients support on a wider array of financial services products, such as overdrafts, credit cards and asset finance.
Ezbob Express’ modular approach enables financial institutions, and non-financial brands that wish to integrate financial services into their offering, to add the functionality needed to achieve a best-in-class digital experience.
Get in touch today to discuss how we can drive forward your client acquisition strategy.
