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Essential resources for banking executives:Enter ‘Banking Reinvented’

The modern retail bank's digital onboarding and lending process

Customers today expect opening a bank account to be as easy as buying something from Amazon. Here’s what that process looks like, step-by-step.

by Backbase


So far in this series, we’ve explained why financial institutions need to fix their digital sales processes, what steps they can take, and how to build the ideal solution.

But as the saying goes: showing is much more powerful than telling.

In the video above, our Product Architect of Digital Sales Joost Caris demonstrates what a flawless digital experience should look like for a retail customer opening a bank account and applying for a loan.

Or, read on for the recap — and our tips on how to make a difference to your bottom line.

The 5 minute digital account opening process for retail bank customers

Meet Lisa.

Lisa is an American student coming to the end of her first year in university. She’s finally getting around to setting up a student bank account.

So she grabs her mobile device and downloads the app from her provider of choice.

She clicks on the link to become a customer.

Step 1: Collecting contact information

Lisa enters her mobile phone number.

She receives a text message to verify the number is correct, with a code she must input to proceed.

Then she enters her full name.

By capturing your customer’s name and phone number upfront, you reduce the rate at which they abandon the application process. If they get interrupted and don’t complete it, the customer service team can follow up to find out why or help them finish it.

Step 2: Selecting the bank account type

Lisa chooses what kind of account she would like to open.

She isn’t ready for a business account yet, so she selects a personal account.

She’s then presented with a subcategory of products, such as a checking account, savings account or credit card. She picks the student version.

Step 3: Identity verification & KYC check

Now, the ID verification process begins.

The critical thing here is Lisa doesn’t need to visit a branch. That’s particularly welcome considering she doesn’t want to venture out in the middle of a pandemic.

So Lisa grabs her official ID, which is her passport or driver’s license.

From within the app, she takes a picture of it. The data on the document is visible and readable, so the app verifies it automatically.

Lisa takes a selfie, again from within the app. She has plenty of practice, so making sure her face fits in the frame is easy.

The app analyses the biometric data and matches it to the data captured from the ID document.

Now the app has captured Lisa’s personal data from her ID document, saving her the hassle of entering it herself. She simply confirms that it’s accurate.

The ID&V part is often the step which causes the most friction. Making this as seamless as possible automatically improves your customer experience and conversion rate.

Step 7: Meeting regional regulatory requirements

As Lisa is based in the US, she enters the last four digits of her social security number.

Then she confirms her citizenship status and accepts the provider’s Terms and Conditions.

Step 8: Creating an identity

Lisa provides her email address and sets up a username and password.

She also completes the rest of the authentication process, enabling face ID and choosing a five-digit passcode as a backup.

Step 9: Setting up a digital signature

Lisa creates a digital signature through an integration such as DocuSign, which will allow her to e-sign documents quickly whenever she needs to.

The digital loan application process for retail bank customers

Fast forward 10 years.

Lisa has settled down. She got married, bought a house and had kids. The family needs a bit more space, so she decides to renovate.

But she doesn’t have the spare cash, so she applies for a loan.

Step 1: Selecting a loan product

Lisa logs into her app and scrolls through the products until she finds a home loan.

She chooses to refinance her mortgage and then tells the bank she needs the funds to make improvements to her home.

Step 2: Pre-approval checks

Because Lisa is an existing customer and her financial profile is already known, the bank is able to complete the pre-approval process immediately.

The bank’s auto-decisioning determines that Lisa can instantly borrow up to $35,000. That’s enough, but the app gives her the option to apply for more.

Lisa confirms her financial situation hasn’t changed since her last mortgage application, and that she still has the same job.

Tip: Make it easy for existing customers to apply for additional products
We often hear from clients that one challenge they face is getting customers to use more than one product from them. So remove as many barriers as you can, especially in the document collection process. You already have their details, so don’t force them to send it all to you again as if they were a stranger.

Step 3: Making an appointment with a financial advisor

Borrowing $35,000 is a big financial decision, so the next stage involves human interaction.

The app shows live data about the availability of an appointment with a mortgage advisor — by phone, video call and in-branch.

Lisa picks video call because it’s the most convenient option for her. The app confirms the appointment for 30 minutes later.

Refinance home loan proposal creation

Step 4: Updating the customer’s financial information

Through the bank’s Application Centre, Lisa can see that she needs to update her salary details.

While she waits for her appointment, Lisa simply uploads her latest payslip. If she doesn’t have a digital version on her phone, she can take a picture of a hard copy.

Now, all Lisa has to do is sit back and wait for the advisor to call.

Refinance home loan Lisa application center

Tip: Offer multi-product origination right from the start
Your customers are most engaged at the point of sign up, which is when you should seize the opportunity to offer them more products, such as credit cards, loans, insurance, and more. An effective digital sales process helps you upsell as many products as possible while you have your customer’s attention, because re-engaging with them later is much more difficult.

Step 5: Viewing the customer case

Through the Case Management section of the Employee App, the bank’s customer service rep (CSR) can easily see all the tasks they have to take action on.

They review Lisa’s home loan refinancing application and approve Lisa’s newly-uploaded payslips.

Step 6: Having a conversation with the customer

The bank CSR generates a few different proposals for Lisa to consider and then begins the video call through the Employee App.

They discuss the options and calculate a new proposal based on Lisa’s requirements.

Refinance home loan Lisa screen sharing

Step 7: Providing financial advice

The CSR uploads the various proposals suitable for Lisa, which appear in the Application Centre in her app, so she can compare them easily and on any device of her choice.

Step 8: Agreeing to a deal

Through her app, Lisa selects the proposal that she prefers, and the CSR takes care of the rest.

And there you have it! In only nine steps and under five minutes, Lisa has set up her new bank account.

And in just another eight steps, she’s signed up for a home loan.

Even better, she completed these journeys on her mobile device, from the comfort of her home.

She gets immediate access to her account and the products she signed up for. She doesn’t know it, but she also met the bank’s compliance requirements.

That’s what a modern digital onboarding and sales process looks like for today’s bank customers.

That’s the standard the latest generation of apps has set and the challenger banks have replicated.

That’s the experience that traditional banks need to offer customers like Lisa if they don’t want to lose her to one of their trendier rivals.

If you’re looking for a solution that can deliver a flawless digital onboarding experience, Backbase Digital Sales has everything you need. Our award-winning, out-of-the-box offering lets your customers create an account within five minutes, guaranteeing to skyrocket your conversion and employee efficiency.

Best of all? Backbase Digital Sales is easily applied to all your lines of business. In the next chapter, we'll look at how you can deliver a seamless digital onboarding and lending experience for your SME customers.

Read on: Digital onboarding & lending in SME banking