Customer onboarding is an essential process for many businesses, and especially banks and financial institutions. Relationships are vital in both retail and commercial banking. Getting off to a good start with an outstanding customer onboarding experience can help you establish a strong relationship both today and in the future. There's no one size fits all approach, however, and much nuance.We can define onboarding as to how new clients and banks establish a relationship with each other. Some steps may be well defined, such as filling out an application form. Additional measures may be more fluid, such as a customer sitting down with an account manager to ask questions.Either way, onboarding offers an excellent chance for both parties to get to know one another. Customers may find solutions to their pain points. Banks can gather data, and when appropriate, cross-sell additional products and services. Let's dig deeper into why this process is so important.
Optimize your onboarding processes before it's too late
Each customer will have their own needs and challenges. They may also have different account types, and there are countless compliance issues to consider. These factors necessitate customized approaches for every client and every onboarding experience.Consider compliance. Bain and Company have found that significant banks racked up roughly $200 billion in fines from 2009 to mid-2016 due to money laundering. With effective "Know-Your-Customer" measures, financial institutions can identify potential liabilities more quickly and potentially mitigate issues (say by turning a would-be client away or reporting him/her to the appropriate authorities).Outside of legal concerns, a well-developed onboarding process could uncover customers that aren't a good fit for your firm. Another bank may better serve them, and you could expend your resources on higher-value clients. Likewise, as you get to know a customer, you may realize they require other services you can provide.Yet for all its potential, many banks (and other companies) fail to offer a good, let alone exceptional, onboarding experience. Instead, they throw together a haphazard process that leaves questions unanswered, both for the customer and the financial institution. Vital information falls to the wayside, opportunities are missed, and preventable problems may later crop up.
