Financial Services (FS) organizations today are grappling with umpteen challenges to reduce their operational costs and improve their revenue base. With shrinking margins amidst growing competition and an increased regulatory environment, customer retention is a major area of concern for most banks. This has spurred banks to identify innovative ways of attracting and retaining customers. With newer transacting channels witnessing rapid adoption by the users, banks are devising ways to embrace disruptive technologies like mobility, big data and cloud. However, some of the products and services like online account opening are either altogether missing in their portfolio, or are ill-equipped to handle customer needs on an online platform. Hence, most of the major banking organizations are focusing on a robust web channel augmented by newer modes of banking – like mobile banking for instance. Further, web strategy is becoming a core component in the overall sales strategy with banks trying to leverage the online medium as an effective sales channel.
Online Account Opening Process
A vast majority of banks are in some stage of scaling up their online presence by bringing in newer products into their online fold. This is fueled by the fact that more and more people – especially the Gen-Y’ers – are now using the web to research a financial product. Additionally, most of these researchers have a conversion ratio of more than 50% for some product suites. It is no wonder, then, that one area has managed to draw a lot of focus and attention from the banks – the online account opening (OAO) process. However, it requires a lot of due diligence to design an optimal OAO solution that’s within the ambit of regulatory and compliance guidelines.
Based on extensive research and experience in the Financial Services and Digital Commerce domains, outlined below is a set of best practices to make the online account opening process simple, yet effective and comprehensive.
• Keep the process short and simple. An online account opening application should be concise, pose the most basic set of questions (within the compliance and regulation guidelines) and open the account in real time (with speedy, but a thorough credit check and regulatory approval).
• Educate the customer beforehand about the application process, along with the estimated time for completing the application. This can help the customer to be much better prepared, organized and keep the information (required to fill during the application process) handy.
• Design a technically robust application, free of technical glitches and ensure better response times. Expedite the application process for existing customers by making use of their current profiles.
• Assist the customer throughout the application process, by means of customer assistance in the form of text chats, FAQ guides, voice support etc.
• Take care of non-tech savvy customers. A few customers might not be technologically savvy or may find the whole online process confusing and cumbersome. For such customers, there should be a mechanism that redirects them to alternate channels like branch banking, phone banking. An OAO solution should be able to capture and appropriately flag data pertaining to customers who abandon the OAO process mid-way. It pays to follow-up with such customers and possibly redirect them to the nearest branch or to the call center for easy account opening.
• Reward the customer for choosing the online channel for account opening. These rewards could be in the form of fee waivers, gift certificates etc. and are bound to act as a booster to popularize OAO.
• Leverage the power of social media to create marketing campaigns spreading awareness about the product suites, ongoing offers and soliciting feedback on existing services. This will not only establish the bank as a new age, tech savvy one; it will also help the bank in attracting new customers to its website.
• Integrate your account opening solution with web analytics and search engine optimization (SEO) to gain insights into customer demographics and online behavior patterns. Banks can use this data to frequently come up with new product features and launch targeted marketing campaigns for customers.
A simplified online account opening (OAO) process is a stepping stone towards a streamlined client on-boarding experience. It is imperative for banks to provide both their existing and new customers a mature OAO solution, incorporating major financial products cutting across services lines. In this regard, most of the tier 1 and tier 2 banks are either revamping their existing OAO process or altogether building alternate solutions. However, most of these banks are faced with similar challenges while (re)designing their OAO solutions. Banks desirous of achieving substantial wins in OAO should focus on smarter web strategies that seamlessly offer a potent mix of innovative products, intelligent cross selling tactics etc with an unwavering focus on understanding the customer needs. With customer stickiness a major concern for all banks, solutions like OAO when implemented effectively will not only help banks retain existing customers, but attract new customers as well.
Sandip Sinha is the associate vice president of Collabera's Financial Services Practice, and Muhammad Faaiz Tameem is a senior consultant at the practice.