In today’s highly competitive financial landscape, customer onboarding has become a critical touchpoint that can significantly impact long-term customer satisfaction and loyalty.
According to the report “Digital Onboarding: A Benchmarking Assessment of Untapped Value Potential for European Retail Banks” by Arkwright Consulting, the onboarding journey in retail banking is marred by high abandonment rates, with estimates ranging from 67% to 80%.
This presents a substantial opportunity for banks to optimize their onboarding processes to enhance conversion rates and customer retention.
The importance of digital onboarding
Digital onboarding serves as the first substantial interaction between a bank and its potential customers. It sets the stage for the customer’s entire banking experience.
A seamless onboarding process not only fosters trust but also enhances the likelihood of successful cross-selling opportunities.
Arkwright’s study of nearly 200 onboarding journeys for retail current accounts and credit card applications across European banks underscores the need for a robust and user-friendly onboarding experience.
Key findings
The report identifies pervasive inconsistencies in the onboarding processes across different banks and countries. Despite the variations, some common themes and best practices emerge.
The benchmarking exercise evaluated five main digital onboarding features: website performance, degree of digitalization, trust, user journey, and user experience.
Website Performance: Efficient navigation, fast loading times, and high compatibility with various browsers are crucial for reducing abandonment rates. Superior website performance plays a pivotal role in the application process by promoting user satisfaction.
Degree of Digitalization: Modern identification procedures, integration with third-party services, and seamless cross-channel processes are essential for a smooth onboarding experience. The use of APIs for optical character recognition (OCR) and address lookup can significantly reduce manual input and enhance efficiency.
Trust: Establishing trust through consistent branding, transparent data protection policies, and a clear communication of terms and conditions is vital. Effective branding and trust-enforcing URL structures are key elements in building user confidence.
User Journey: A simplified, intuitive application process with clear progress indicators and minimal information requests is critical. Features like save and resume options, chatbot support, and visualized progress can greatly improve the user journey.
User Experience (UX): Responsive design, clear error messages, and positive emotional cues are important for a pleasant user experience. Inline validations and tooltips can help minimize errors and enhance user satisfaction.
Country-specific insights
The report highlights significant national variances in onboarding performance.
Nordic countries, known for their high degree of digitalization, generally achieve better onboarding scores.
Conversely, countries like Italy and Poland exhibit lower performance despite having relatively advanced digital infrastructures.
This suggests that a high degree of digitalization does not always correlate with effective onboarding processes.
For instance, German banks tend to perform better in current account onboarding, particularly in UX and trust criteria, while credit card applications show room for improvement.
Nordic banks excel in both categories, leading the cohort in overall ratings.
Areas for improvement
Arkwright’s analysis identifies several areas with high potential for improvement:
User Support: Enhancing user support features can significantly improve the onboarding experience. This includes providing clear guidance and support options throughout the application process.
Idle Session Timeout: Implementing effective session timeout strategies can prevent user frustration and abandonment.
Trust-Enforcing URL Structures: Ensuring that URLs are consistent and convey trustworthiness can boost user confidence.
Save and Resume Options: Allowing users to save their progress and resume later can reduce abandonment rates.
Emotional Imagery and Animations: Using positive emotional cues and animations can enhance the user experience and increase conversion rates.
The case for optimized onboarding
An optimized digital onboarding process can drive significant business results.
Arkwright’s experience shows that improving digital onboarding can lead to conversion rate improvements of nearly 400%.
This not only boosts customer acquisition but also provides a competitive advantage in the marketplace.
Banks can leverage A/B testing, iterative improvements, and strategic enhancements to achieve these gains.
For example, integrating business-related images in B2B onboarding journeys has been shown to positively influence conversion rates. Additionally, seamless integration of prefill APIs and save and retrieve email features can streamline processes and improve engagement.
The potential for optimizing digital onboarding processes in European retail banks is immense.
By addressing the identified areas of improvement and adopting best practices, banks can enhance customer experiences, reduce abandonment rates, and drive meaningful business results.
The journey towards optimized digital onboarding requires a strategic focus on user experience, trust, and digital integration, ultimately leading to higher customer satisfaction and loyalty.
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