How Does Digital Onboarding Combat Customer Drop-Off?
A key question is how to minimize customer drop-off while reducing client acquisition and retention costs. There are a number of ways to reduce customer drop-off, including KYC and reducing costs for client acquisition. Listed below are some of the best ways to reduce customer abandonment. Read on to learn more. You may be surprised at how much friction an onboarding process can cause. In fact, research has shown that friction can result in as much as 75% of customers opting for another provider. However, while the customer drop-off rate may be expected, it can be reduced if the onboarding process is automated.
Reduces client acquisition costs
Increasing your reach, conversion rate, and customer lifetime value are just a few of the benefits of a Digital Onboarding process. After all, the first impression is everything, and the last thing you want is a customer leaving unhappy with your product or service. Digital Onboarding has become an important tool for the financial services industry, and Moody’s team of digital onboarding experts have solutions already implemented in the wealth management, banking, and educational industries. With the right tools and people in place, Digital Onboarding solutions from Moody will increase your time to market and improve your customer retention rate.
Using a secure digital solution to onboard customers is more efficient than using paper-based processes, and secure digital solutions can handle all the details such as COVID-19 global lockdown, which improves the overall customer experience. Furthermore, these digital solutions also help company’s lower costs and increase compliance. This means that organizations can continue onboarding new customers without breaking lockdown regulations. The organizational culture of some financial institutions is another hindrance, but the Payment Services Directive (PSD) may encourage some financial services companies to use digital onboarding solutions.
Reduced time for verification
Banks cannot afford to have a sub-optimal customer experience, and one of the biggest barriers to achieving this is the speed of digital onboarding. According to a recent Signiant study, it took a typical consumer between seventy-eight and one hundred twenty clicks to open an online banking account. Almost two-thirds of this number abandon the application before they have even begun using it.
Many banks and online payment services have found that their checkout cart abandonment rates have increased since the beginning of the digital era. While it is true that customers are able to shop online faster than ever, their experience with the process is a huge turn-off for many. The time and effort required to complete these tasks is not only inefficient and tedious, it’s also likely to drive people away. A recent Signiant study found that 40% of consumers who opened a bank account abandoned the process before completing it, and that number has grown since. Some countries reported abandonment rates as high as 70 percent.
Reduces cost of KYC
For financial institutions, Digital Customer Onboarding is a vital step in welcoming new customers. It can help them achieve their revenue goals and provide a safe and convenient customer experience. The process consists of two main components – Know Your Customer (KYC) and Anti-Money Laundering (AML).
Today, technology allows for real-time video ID verification. Digital onboarding solutions can reduce the cost of KYC by as much as 90 percent for financial institutions that leverage video-based KYC. In addition to saving time, the video-based method also increases accuracy and reduces fraud and application abandonment. The process can be automated, which can increase conversion rates. And the process also protects customers from fraud and other risks associated with online accounts.
While KYC is an important part of customer service, many Financial Institutions (FIs) are still leveraging point solutions for their ID and verification processes. In fact, a bank may have four different vendors performing different parts of its KYC process. And most FI’s are struggling to maintain all their customer data in a single location. Most use different databases for different purposes, which adds to complexity and costs.
Reduces customer abandonment for younger customers
The emergence of fully digital banking options is reducing customer abandonment among younger customers. Currently, consumers are reluctant to submit personal information, or fill out forms, during the onboarding process. While a traditional onboarding process involves multiple touchpoints, departments, and forms, digital-savvy consumers don’t want to spend time filling out those processes. Digital Onboarding improves customer experience, reduces customer abandonment, and increases retention and loyalty.
The benefits of digital User Onboarding are well documented. According to a recent survey by Signiant, 68% of people will abandon a digital onboarding process by 2020 or 2022. These figures are alarming considering that a bad onboarding experience can drive customers away from a brand. Digital onboarding can reduce customer abandonment among younger customers by providing them with a seamless and engaging experience. However, some companies may be reluctant to implement digital onboarding, because it is time-consuming and may discourage some customers.
Reach out to IDcentral for a customer-centric Onboarding solution with AI-based Identity and Document verification
Request a demo with IDcentral here