Getting Onboard With Digital-First Banking

In the post-pandemic terrain, digital onboarding is both hero and villain. That’s because COVID-19’s social distancing rules, plus digital everything, has led to the realization that most business can be conducted remotely and securely — if the proper precautions are taken beforehand.

PYMNTS’ June 2020 Digital-First Banking Tracker®, done in collaboration with NCR Corporation, underscores this dawning awareness, detailing numerous ways in which financial institutions (FIs) are optimizing the digital onboarding experience to align with emerging expectations.

Noting that online account openings rose over 200 percent in April while mobile banking traffic shot up 85 percent, the Digital-First Banking Tracker® states, “[Many customers] are leveraging digital banking technologies for the first time, and financial institutions (FIs) need to be sure their onboarding processes offer smooth experiences that set the tone for lasting client relationships.”

With a nod to common onboarding frustrations, from lengthy ID authentications to redundant forms and painfully slow processing, “…up to half of all bank customers … abandon onboarding processes at some point in their lives,” the Tracker states, adding that “this represents a significant opportunity cost for FIs, motivating them to explore numerous solutions to simplify and streamline these processes, including biometrics and identity document scans.”

Personalization, Relevance and Trust

Digital desires are all the rage in banking as COVID-19 continues to wax and wane, obscuring the exact shape of things to come. In response, millions of consumers are now downloading apps and beginning their digital banking journey with a remote onboarding process. FIs need to make sure these experiences are frictionless and safe if they wish to compete. 

“[As] physical touchpoints continue to decrease and digital [ones] increase, it will be critical that banks still provide the personalized services that consumers demand from the brands [with which] they interact,” Douglas Brown, senior vice president and general manager of NCR Digital Banking, told PYMNTS.

“Banks and credit unions have the opportunity to meet these expectations through features such as a tailored user experience based on their segment, or financial wellness advice relevant to their current needs,” Brown said. “If financial institutions are able to implement these features correctly, they will continue to maintain and build the trust they have with customers. If not, they may find attrition at an alarming rate.”

As the June Tracker states, “Any consumer who moves on from a bank with too many frictions will try to onboard again at one of its competitors, meaning that banks have to invest in the right tools for successful first impressions.”

Risk and Reward

To provide a sense of gains that digital banking is making, the new Digital-First Banking Tracker® features a conversation with Ben Soccorsy, head of digital payments at Wells Fargo.

As Soccorsy told PYMNTS, “There’s been a 20 percent-plus increase in customers signing into digital banking capabilities and significant increases month-over-month in mobile check deposits. In March, the number of [mobile] checks deposited was up 40 percent over February, for example. Mobile deposits, meanwhile, were up over 80 percent in April 2020 compared to April 2019.”

It’s serious money, with serious risk to go along with it. That’s where new artificial intelligence (AI)-powered digital onboarding solutions are managing risk with just the right balance of friction.

“FIs have the opportunity to streamline onboarding with biometrics, such as facial recognition technology, to verify that applicants are who they say they are,” the Tracker states. “Customers typically either visit bank branches for facial scans or simply upload selfies to their mobile banking apps, which the system can then compare against government-issued identity documents.”