Banks must effectively incorporate mobile and web channels in their onboarding process or risk getting left behead, according to a new report from Aite Group The report, authored by Aite analysts Sophie Schmitt, David Albertazzi and Christine Pratt, states that many banks still continue to require a branch-based or in-person application process for customers who want new products or services.
"While requiring a customer or prospect to visit a branch to start onboarding may provide the best outcome for the firm, from a sales and regulatory (i.e., Know- Your-Customer regulations) standpoint, banks are likely to lose opportunities to competitors that offer a more flexible onboarding process that fits a customer's preferred way of engaging with their bank," the report reads. "For example, Generation Y customers are more likely than older generations to prefer completing an application on a mobile device, particularly on a tablet."
For retail banks, pursuing a multichannel onboarding strategy will help in the process of becoming more customer-centric, right-sizing the branch network and using data analytics effectively, says Albertazzi. But Albertazzi adds that many banks struggle to provide an integrated, multichannel onboarding process. He notes that very few banks today offer the capability to start a brand-new customer relationship via a mobile app, for example.
There is an even bigger opportunity and need for true multichannel onboarding in the mortgage origination process, notes Pratt. Mortgage origination tends to be a very paper-heavy process, which, she notes, is partially due to increasing and ever-changing regulations since 2008 and the documentation requirements in both origination and closing processes.
Still, Pratt says there is a need for incorporating digital channels into the mortgage process while remaining compliant, and indeed banks must do so to remain competitive. Pratt notes that the mortgage originator with the highest customer satisfaction in the country is Quicken Loans, an online-only company.
"Customers want to be able to sit down at a computer and complete the mortgage process just like they can in opening a checking account," she says. "The newer generation wants to use their tools and if they can’t, they’ll leave."
While banks may look at the massive amount of regulatory requirements and conclude that they cannot afford to allocate much to client experience initiatives, they must reconsider this line of thinking and identify initiatives that can both meet the needs of regulators and ensure their long-term competitiveness, the report states. Additionally, both potential new customers and employees are increasingly considering firms' technology capabilities as important factors.
"We really recommend that firms take a look at what mobile technologies are out there and look to rationalize their onboarding workflow," Scmitt adds.