Report on banks and their remote customer onboarding experiences
Study on opening a business bank account at Austrailia’s top 4 banks
I recently came across a report written by iSky Research titled “Business On-boarding with Australia’s Big Four Banks”. The data for the report was obtained by iSky researchers interacting with Australia’s top four banks with the goal of opening a new business account (creating business banking profiles). The intention was to access the SME banking platforms of each bank, based on a customer operating as a ‘sole-proprietor’ (i.e. an individual, as opposed to an incorporated entity) that was overseas (outside of Australia) at the time of application.
I am generally not overly excited by banking research papers; however, I found this report interesting because the issues uncovered across all four banks match the solutions that our company, Liveoak Technologies, provides. The report validates that the digital identity verification (IDV) and new customer onboarding solutions that our team is working on every day are greatly needed by banks everywhere. Banks need technology partners that provide secure solutions for remote account openings (digital onboarding) that operate within the existing banking ecosystem and regulations (KYC).
The banks surveyed by iSky are as follows: The National Australia Bank (NAB), ANZ Internet Banking for Business, The Commonwealth Bank of Australia (CBA) and Westpac Banking Group (Westpac).
The top 6 findings from the study
The findings were different at the each of the four banks surveyed:
One: CSRs (customer service representatives) will fill out paperwork over the telephone with remote customers and then email the forms to the customers for signature. This two step process delays new account openings and causes customer drop off. Counting on a new customer to complete the onboarding process without assistance from a CSR is not reliable and yields fewer account openings.
Two: Customers must physically visit a branch to confirm their identity. For a remote customer, the branch visit takes place on a future date and this step delays the new account onboarding process. Further, the bank requires a branch visit to lift the outbound transaction restriction. The longer this restriction is in place, the more frustrated customers become as they cannot use the money in their own account.
Three: Bank CSRs ask customers to initiate an application online but not submit it. Next, they ask the customer to print out the information in the application and email it to them. The CSRs indicated that this was their preference because it would ‘take much longer’ for them to enter the information via the phone. Again, asking a customer to go through multiple steps without CSR assistance brings barriers into the onboarding process. The result is increased customer drop off and decreased new account openings.
Four: Customers can initiate the account opening process online; however the onboarding process can only be completed with the signing of physical forms. At this bank, the forms could not be emailed back to the bank. Given that the customer was remote, the result was a process that took around ten days longer to complete.
Five: One bank sent far more physical mail to the customer, including two security devices and separate physical mail for account information, cards, card PINs, online banking registration information, and online banking password and setup information. Not only did the volume of mail seem excessive, it was at times superfluous to requirements and confusing.
Six: At another bank surveyed, new accounts are unable to complete an account application online or over the phone. Consequently, remote customers are advised to visit a local branch which can be a difficult undertaking, especially given that remote customers are often times out of town or out of the country.
The varied results obtained from opening up small business bank accounts in Australia summarize the challenges that most banks and their customers are facing in the world today. The findings are not unique to Australia.
Challenges arise when banks attempt to marry antiquated account opening procedures with market demand for digital experiences. This is where Liveoak comes in – we provide the technology needed to bridge the gap between legacy banking practices and demand for digital access. Further, as demonstrated by the report, banks interpret regulations differently for remote bank account openings. What we do know about creating a digital experience in the banking industry is that the process still requires human interaction. The smoothest, digital transactions in financial services occur when the process can be completed in a single user session and CSRs are available to assist customers every step of the way.
Liveoak has a whitepaper on this exact subject “Remote Account Opening” and you can find it at this link: https://www.liveoak.net/whitepaper/remote-account-opening/. Here is a copy of the referenced iSky Research report: http://iskyresearch.com/business-on-boarding-with-australias-big-four-banks.
keywords: banking, banktech, financial services, fintech, bank account, remote account opening, new customer onboarding, remote customer onboarding, digital banking, digital transformation in banking, digitization, identity verification, Know Your Customer, KYC