Bridging the Digital Divide: Modernizing Financial Onboarding

The focus was on digitizing one product type, such as deposit accounts, rather than attempting to digitize everything simultaneously. By starting with a clear vision and a manageable scope, common pitfalls that often lead to failure were avoided.

Avoid the assumption that a customer who begins the application process with complete it regardless of the experience. A large regional bank made this mistake with the president stating, “If someone can’t open an account online, they can visit one of our 1,000 conveniently located branches to open an account.” However, when his team cross-referenced failed online account openings with branch account openings, only 13% of online failures resulted in branch visits.

Treat account opening like a sales funnel and optimize the conversion at each stage. Widen the funnel to ensure that the maximum number of people who click “Apply Now” finish the application.

Many organizations begin their digitization with the core system in mind. They analyze the data the core will need to open an account and create a digital experience to mimic that. This approach is flawed. The design should be client-centric. Data can always be transformed to match core system requirements, but the core system was designed with bankers in mind, not clients, leading to a disconnect in user experience.

Onboarding a client for any product requires compliance with KYB, KYC, AML, FINRA, etc. This process, referred to as client onboarding, is distinct from product origination, where the bank provides the business the specific banking product they requested.

The business was onboarded first by gathering essential information to ensure it met the bank's criteria. After successful onboarding, the desired product, such as a deposit account or credit card, was originated. This flexible approach allowed for gradual expansion to additional products over time.

This approach also supports product bundling, making it easier to onboard a client and originate one or multiple products in a single experience.

A challenging application experience can deter applicants. It’s important to ease applicants into the application process with easy questions like name, email, and address. This increases applicants’ investment in the process, making them more likely to complete the application even when the questions get harder.

Evaluate every field of information being requested. If a question is difficult or ambiguous, consider rephrasing it. For example, instead of asking "How long have you been in business (Years & Months)?" which can be cumbersome, ask if the business has been operating for "2 years or less," or offer a range (e.g., 0-12 months, 1-5 years, 5+ years). This simplifies the process for the applicant and reduces the likelihood of application abandonment.

Banks have encountered issues where applications fail due to minor errors in business details, such as incorrect spelling of the business name. Implementing a business look-up tool at the start of the application process—similar to a Google address search—significantly improves the accuracy of business details, thereby increasing the success rate of verification processes with services like MidDesk and Lexis Nexis.

Capturing and verifying information about beneficial owners is one of the biggest challenges in digital onboarding of a business client. This challenge intensifies if the bank needs to verify other parties like signers or officers.

Adding a digital workflow to the application process allows the primary applicant to provide the names, emails, and phone numbers of the relevant parties. These individuals can then complete their details, accept disclosures, and eSign agreements securely online, without needing to visit a branch. This not only improves the client experience but also enhances regulatory compliance.

It should not be assumed that clients have all the necessary information to complete an application in one sitting, whether online or in a branch. Allow clients to start the application in one channel and finish in another, or to save their progress and resume later. Recognizing that interruptions can occur ensures that clients are not lost during the application process.

Opening new bank accounts and processing loan applications are central to banking operations. However, these tasks may not be as important to business owners as managing their businesses or personal responsibilities. Acknowledge the likelihood of interruptions, save their application progress, and nurture them as leads. This approach not only provides a better client experience but also shows that the bank values their business.

There are a myriad of prefill services in the market, and many of them are used in retail banking. Address Lookup (Google, Melissa), Photo ID capture (Mitek, IDology), Phone Look-up (www.prove.com) are a few examples. Incorporating these services into your business onboarding enhances client experience and demonstrates that the bank is easy to do business with. It also helps improve data accuracy and regulatory compliance.

Allow customers to upload digital copies of documents, but don't overlook the need to support device crossover (e.g., starting on a computer and continuing on a phone). This capability enables clients to use their smartphone cameras to capture digital copies of documents. Additionally, consider whether the document is truly necessary or if it can be sourced from another location, such as the Secretary of State for Articles of Incorporation. These considerations align with the goal of making the bank easy to do business with, which clients will recognize and appreciate.

Digital signing of account agreements should be a standard feature, whether using DocuSign, Adobe Sign, or OneSpan (eSignLive). As clients expect this capability, its absence would be a significant oversight. Signing is often the final step in account opening or loan applications, so it is critical to ensure a smooth process.

Although most retail account openings occur on mobile devices, business account openings predominantly happen on desktops/laptops. However, given the increasing expectation to complete tasks on mobile phones, particularly for Beneficial Owners, Officers, and Signers, mobile responsiveness is crucial. Ensuring a mobile-friendly experience is a must.

At least in the early stages, the priority should be on enhancing the client experience with digital tools without requiring immediate integration with the core system.

While manual processing of digitally originated applications is not ideal, transitioning from "Manual Application > Rekeyed to Core" to "Digital Application > Rekeyed to Core" still represents significant improvement. The digital application offers more convenience, supports digital workflows for beneficial owners, enables document uploads, and improves data quality through validation services. This digital experience can later be integrated with the core system or automated using Robotic Process Automation (RPA) tools.

Business onboarding (KYB) and owner verification (KYC) can be streamlined by utilizing fintech services like Alloy, MidDesk, and LexisNexis. These solutions accelerate the onboarding process and improve accuracy whilst simultaneously helping to protect the bank from attempted fraud.

Some of the Fintech services Myridius gas worked with to improve KYB, KYC, AML and Fraud along with the cores and online banking systems integrated to are shown below:

Minimize the back-and-forth with clients by collecting as much information as possible upfront. Using digital resources like MidDesk to obtain Articles of Incorporation reduces the burden on business owners speeds up decision-making.

Once the digital application experience is live, allocate time and budget for at least one iteration. Feedback from bankers and clients will highlight areas for improvement, which can be prioritized in a backlog. Go-live is a milestone in the journey, not the final destination.

1. American Bankers Association, 2023 Preferred Banking Methods, 2023

2. Temenos, How Banks Can Win Small Business Customers, 2018

3. Salesforce, Onboarding is the Foundation of Digital Transformation, n.a.

4. Kyckr, The State of Customer Onboarding in Corporate Banking, 2021