The pandemic changed the way we do banking for good.
It’s not just about the shift to a more digital form of banking. The pandemic also made things more competitive as an array of FinTechs and online platforms arrived to offer customers increasingly innovative financial experiences — and increase their expectations about banking.
And as banks work to meet the ever-growing demands of a more digitally sophisticated customer base, one obvious area for improvement has emerged: the onboarding experience.
Companies like Apple, Google and Amazon have set a new standard for what people think seamless onboarding should look like. However, many financial institutions (FIs) make it difficult to open accounts, with onboarding that still relies on manual, time-consuming tasks, visits to brick-and-mortar locations and requests for paper copies of documents.
Far too many corporate banks still put up hurdles for the customers that try to interact with them, which leads to significant dropout levels in the account opening process. Opening a corporate bank account should be as fast and seamless as possible, allowing clients to focus on more pressing business needs.
What can banks do to address this issue? Many of the steps that either prolong or complicate onboarding have to do with banks’ need to comply with know your customer (KYC) and anti-money laundering (AML) regulations.
For example, banks could be using inefficient verification tools and secondary source data that require physical corroboration. Therefore, many banks are prioritizing investments in artificial intelligence (AI)-enabled data analytics features for corporate digital client onboarding.
Another way banks can improve onboarding is by minimizing or eliminating the need for customers to visit physical locations. Digital banks are not the only ones that can provide fully online account opening, as many physical banks give customers this option. Fully digital onboarding can also increase overall speed from start to finish, even aside from ruling out trips to branches.
As competition in corporate banking continues escalates, banks cannot afford to sacrifice a third of their customers to slow onboarding processes. Working with FinTechs or other third parties to digitize onboarding could be the preferred strategy for commercial banks to streamline the process easily and completely.