The banking industry is well known for creating bespoke backends for each product or product type. A product owner, focused on crafting the best customer experience, orchestrates business processes, the tech stack, and compliance requirements with little regard for the structure of other products or product lines. This causes inconsistent customer origination and onboarding journeys across the product range, which has implications that extend deep into a bank’s value chain.
Non-standard origination processes mean that banks often collect inconsistent data across customer and product types. As a result, third-party services – increasingly crucial to driving value in the ecosystem banking era – cannot be integrated consistently across all products.
Operationally, servicing so many bespoke products is complex, costly, and time-consuming.
There are implications on the front end as well. In an era when everything should be moving in a digital direction, customers continue to encounter inexplicable manual and paper-based processes that seem completely out of step with the times. Ultimately, this inconsistency erodes efforts to establish a trusted, coherent, and cutting-edge brand in the minds of customers.
Particularly as technology-first challenger banks gain market share among digitally savvy customers, all banks need to refine their onboarding and origination journeys. Digitization will help, but it needs to be executed with a laser focus on consistency that enables a single application journey across all products.
Why Consistent Onboarding and Origination Matters
Some challenger banks enable customers to open an account within 24 hours simply by uploading their photo ID and following a few prompts on a mobile device. Until recently, this seamless interaction was unheard of in many markets. Soon, it will be an expectation for banks around the world. To capture the attention of the next generation of customers, banks need to enable onboarding journeys that feel intelligent, smooth, and hassle-free.
But competition for customers is only one of the reasons for ensuring a consistent digital-first onboarding approach to all products. Competition is also about efficiency. Consistent onboarding will improve the efficiency of new product servicing, reduce manual labor, and speed up cycle times and ultimately time-to-market. Simply boosting straight-through processing rates can reduce the cycle time between application and funds delivery from weeks to days. Similarly, digitalized process consistency can cut new product introduction times from months to weeks.
Third-Party Integrations: The Competitive Edge of the Future
Behind the scenes, seamless digital customer journeys will be driven by carefully orchestrated, API-driven, third-party relationships. But if different product onboarding and origination journeys collect different pieces of customer information at the outset, it becomes impossible to leverage those third-party relationships to consistently drive value across all products.
That’s a massive lost opportunity to accelerate and simplify the customer onboarding journey enormously by enabling rapid:
- Customer identity verification
- Enterprise client validation
- Address validation
- Credit evaluation
- Risk rating
- Broker-to-bank references
- Property valuations
- Legal advisory and legal document preparation
- Downstream fulfillment
Beyond simply accelerating the customer journey cycle times, such third-party services will increasingly impact other APIs. Credit and risk evaluation, after all, is not just about speed. It is also about leveraging automation to increase accuracy and thereby reduce default rates.
Fortunately, given the increasing diversity of third-party services, banks will not need to completely transform onboarding/origination simply to match the arbitrary requirements of vendors. Instead, banks can and should orchestrate an ecosystem of third-party services that best matches their existing customer journeys, then make process adjustments to add consistency across all products and enable the third-party services to support a rich array of offerings.
The Banking Customer Experience of the Future
Fundamentally, banks need to approach origination with a straight-through processing mindset that implements a single application journey across all products. This application journey should be supported by a consistent end-to-end approach that takes into account digitized identification, verification, document collection process, and e-signature.
The onboarding and origination process is a powerful (and often missed) opportunity for banks to build unified, digital-first brands. Across loans, overdrafts, development loans, current accounts, fixed-rate bonds, business savings accounts, and more, retail customers and enterprise clients alike will experience the bank not as a series of inconsistent and time-consuming paper forms, but rather as a fully unified application that serves all of their financial needs at the click of a button.
About The Author(s)
Consulting Partner, Banking & Financial Services
John has more than thirty years of consulting experience advising financial institutions on how technology and regulatory changes affect banking strategy, operational processes, and systems. He has particular expertise in how digital capabilities affect product origination across lending, savings, and current account product lines.
Principal Consultant, Banking & Financial Services
Chandrakanta is a business analyst with more than five years of experience providing IT consulting for the banking domain. She brings deep-rooted experience in digital transformation, with strong expertise across origination, commercial lending, current account, retail banking, and digital banking.