Commercial and business banking clients often have a harder time opening a bank account than the average retail client, mainly due to the complex, siloed legacy technology that makes up most banks’ back, middle and front office operations. Banks share the frustration of difficult and lengthy onboarding solutions with their clients. Not only does a fragmented, error-prone and labor-intensive manual process result in poor customer experience, it also results in higher costs, higher complexity, and higher levels of frustration for everyone involved. Now, with the rise of challenger banks, automated digital experiences, and tech giants such as Amazon, banks are facing more pressure than ever to step up their game and enter into the digital era.
Many banks are still reliant on decades-old legacy systems. For these banks and their clients, the benefits of digitalization are clear, and the time is now. The investment in new technologies in commercial banks can lead to a drastic improvement on the customer experience, and also paves the way for cost savings, further automation, and faster time-to-revenue.
Five key benefits of digitization
1. Omni-channel customer interactions
Lengthy email chains that explain requirements and status request updates put a strain on customer relations and results in a high risk of clients abandoning the onboarding process before it can even begin. A digital channels approach removes the dependency on email exchanges and lets banks interact with their customers in a way that suits them best (mobile, online, call centre, or branch). Customers are also enabled to start an application online and continue it on another channel if they prefer. This multi-channel approach allows banks to extend the same strategy across business lines and geographies to create a consistent, reliable process that delivers the greatest customer satisfaction.
2. Future-proofing against new regulations
Business rules are often managed via complex Excel-based forms or checklists. This leads to high error rates of up to 65%,
increased compliance risks due to human fallibility, and poor user experience. Using a dynamic rules engine can orchestrate the entire customer lifecycle. Information such as KYC requirements can be gathered at the onset and reused, which means clients aren't asked for the same information multiple times. For commercial and business banks, this automation has the added benefit of allowing them to focus more on their customers and less on regulations and conflicting requirements.
3. Cross-sell / up-sell opportunities
Digitalizing and automating processes within a bank has added benefits beyond the improvement of the technology itself. Automating manual processes and re-allocating headcount to value-adding tasks opens the door for more product innovation within the bank. Improving the customer experience then allows the bank to continue to provide excellence for their customers and stay on top of market trends. Keeping customers happy with streamlined straight through processing workflows saves on operational costs while also allowing banks to pursue further cross-sell / up-sell opportunities.
4. Competitive advantage
Customers are now very knowledgeable about what a good customer experience looks like, thanks to the common use of mobile apps and client-facing solutions. The user experience standard is no longer determined solely by direct competitors but is now dictated by the user experience of apps like Facebook and Amazon. Now, it takes more than just an app to equal a good digital strategy. Banks that embrace disruptive technology and invest in creating a better experience for their employees and customers will be seen in the market as innovative rather than a laggard. And for banks that are slow to adopt, they run the risk of their customers leaving them for challenger banks.
5. Drastically improved customer experience
When clients are repeatedly asked to submit paper forms, re-enter information that is lost in business silos, or attend face-to-face meetings to verify their identity, the overall experience is massively impacted. Banks are now moving toward the use of new technology to provide a frictionless experience. Digital client channels are used to empower customers to update their own data and documentation at any time. The use of identity and verification (ID&V) technology can make face-to-face verification a thing of the past and accelerate account opening, reducing abandonment rates. Integration with eSignature capabilities allows banks to capture authorized signer information and manage documents to reduce costs and accelerate transaction and onboarding times.
The benefits of digitalization in commercial and business banking are seemingly endless. Adopting client lifecycle management technology is a first step to eliminating out-of-date technology. Technology solutions that are future-proofed for new technology updates or regulatory requirements are the key to having peace of mind that your organization will stay ahead of the digital transformation curve.
Register here for Fenergo’s upcoming Commercial and Business Banking webinar: Delivering Digital Client Onboarding for Better Client Experience.