Onboarding has traditionally been viewed as the process of engaging and retaining a financial institution’s customers during the 60 to 90 days after they sign up for services. However, as technology—and competition—has reshaped the banking industry, it has become imperative for financial institutions to widen the scope of their onboarding approach.
In his latest report, Ongoing Onboarding: The Key to Deeper Customer Relationships, Gregory Magana, Digital Banking Analyst at Javelin Strategy & Research, detailed the four stages of the ongoing onboarding process and how financial institutions can leverage each of these steps to develop customer relationships that last.
Day Zero
Even the most robust onboarding systems can fall short if customers abandon the process before ever opening an account. For this reason, the ongoing onboarding process should begin at the account opening stage.
Many financial institutions already have powerful support tools at their disposal that could mitigate issues during the application stage. While they may offer these services to existing customers, these tools are often unavailable to prospective ones.
For example, a majority of the top 20 financial institutions offered click-to-call in their mobile app, per Javelin. However, significantly fewer provided this feature to potential customers during the application process.
“Just as bad, if not worse, you would think that live chat would be a no-brainer in the account opening process,” Magana said. “Somebody could help you and they don’t have to be on the phone, and they can help several customers at once. But only 15% of institutions support live chat in the onboarding process, versus 70% in mobile apps.”
The same issue applies to branch appointment scheduling. While banks offer digital account opening to save customers a trip to the branch, financial institutions with brick-and-mortar branches should offer ways for prospective customers to set appointments and get help if they are struggling with the onboarding process.
“A lot of what we talk about in the first stage is just getting people through that first application piece,” Magana said. “You don’t necessarily have to get them engaging with your most complex digital tools on day zero or day one. Just get them through the process and give them a lifeline if they need a little bit of help.”
Laying the Groundwork
Once customers have signed on, they enter the young account stage, which resembles the traditional onboarding process. The goal at this stage is to make sure that customers understand all the products and services available to them and to drive engagement with these tools.
A key way to lay the foundation for productive communication is by ensuring the user is comfortable with the mobile app. Alerts and push notifications are effective ways to connect with customers, but they can often be difficult for customers to find and customize.
“Education is big here,” Magana said. “Educational materials are rare within mobile, and even sometimes in online banking, but it seems like it should be a no-brainer. You have all these features—mobile banking isn’t where it was in 2010—but a lot of times customers are left to their own devices to figure out how these things work.”
Two of the main features that financial institutions should focus on during the young account stage are credit score monitoring and external account aggregation. These powerful features are already offered by many financial institutions and typically require only a one-time setup.
For instance, once a customer adds their financial data, banks can often set up a credit monitoring tool that keeps the user informed about their creditworthiness either on a constant basis or as-needed.
“Account aggregation is another big one if you want to be the center of your customers’ financial lives,” Magana said. “If you’re Chase or U.S. Bank, it’s saying, ‘We know you have this credit card account with Truist, or such and such home loan with PNC, give us your login and we’ll centralize it all here. Then you can login to our app and look at all that stuff within our space and we’re your top of mind.’”
The Linchpin of the Experience
Getting customers involved with digital features early is the key to success in the third stage of the ongoing onboarding process: digital engagement. This is the stage where financial institutions should use tool tips, pop-ups, insights, and gamification to suggest relevant digital features.
“If people have been customers for three months and they’re still not using something that you consider to be a linchpin of your digital experience, maybe it’s time to suggest things like budgeting tools or mobile deposit,” Magana said. “You don’t want people to have to hack through a bunch of pop ups like it’s some sort of virus-laden website, but just nudge people to use tools that you think are important to the digital experience.”
This experience should include ways for customers to improve their overall digital financial fitness. According to Javelin, many consumers strongly agree that their primary financial institution offers the tools they need for day-to-day banking. However, fewer agree that their primary financial institution helps them plan ahead.
This highlights the importance of offering a financial strategy built on digital engagement, which is essential for building both share of mind and share of wallet.
“Speaking of share of wallet, in this stage it could be about becoming the default card for online merchants and subscriptions,” Magana said. “For example, we’re going to offer you this link and it will take you to a sign-in page for Amazon. Once you sign in, it will offer to make our card your default card at that merchant, so that every time you make a purchase there, we’re the one making the interchange revenue.”
This is a similar strategy that credit card companies use with rewards, but credit card issuers can offer a much broader range of travel and cash back incentives. Debit card rewards tend to be more specific, such as 5% back at select retailers. While these rewards can drive strong engagement, the results will vary depending on how relevant the offering is to customers.
Driving Relevance
Staying relevant to customers is the primary goal of the final stage of the ongoing onboarding process: building advice-driven relationships. This stage brings the ongoing aspect of the ongoing onboarding theory into focus, as users are now well-established with the financial institution.
The goal is to provide consumers with tools that can improve their financial lives. This could include features they haven’t engaged with, such as mobile deposit, mobile wallets, paperless, bill pay, alerts, or aggregation.
Financial institutions should understand the areas of opportunity for their customers because they have a repository of data on customer preferences, which includes all interactions going back to the account opening stage.
Banks and credit unions can leverage this data to create personalized offers for new products and provide tailored suggestions for budgeting or changes in financial behavior.
“It’s the kind of stuff that takes a bank from being a tool for handling a customer’s money to a fiduciary partner that is in their corner,” Magana said. “They are offering insights that are relevant to customers that will help them move forward with their financial life. When a customer has a question, it’s making the institution the first place that they look and the mobile app the first way they interact.”
