98% of banks report lost deals and revenue from poor customer service, a global client onboarding survey by software company Pegasystems has revealed.
More than 20% of respondents indicated they have lost between 26% and 50% of new business opportunities.
The report highlights the negative impact current onboarding processes have on overall customer experience at global banks, driven by processes that take too long and do not provide a comprehensive view of the process for the customer.
Nearly nine out of ten survey respondents said the onboarding process impacts lifetime customer value.
In fact, the study found all phases of the onboarding process are riddled with manual workarounds and lack basic workflow automation.
Many banks cited the speed of credit decision as the primary reason for customers dropping out of the process.
The age of the connected customer has put pressure on banks to update their onboarding initiatives.
The customer experience is a collective interaction that includes more than just the customer service department, as claims, order fulfillment, payments, and other back-office functions also impact the customers’ interactions with an organisation.
While many banks responding to the survey indicated that “client centric” onboarding is a goal, they also acknowledged customer experience to be their top challenge.
Banks stated that the ‘Know Your Customer’ (KYC) initiatives and related processes are the main pain point for customers and banks today.
The report indicates that banks need to develop optimal future-state business architecture, focusing on those services that deliver value to customers, and then organise end-to-end processes that reach the back-office systems.
To execute on this vision, many banks will need to address digital innovation improvements required to move beyond spreadsheets, ad hoc email communication, and sticky notes that are still used to keep track of relationships that may be worth many millions of dollars, Pegasystems said.
“Anything less than a flawless onboarding experience puts banks at risk to lose clients and future business,” said Ron Wellman, industry principal for commercial banking at Pegasystems. “It also puts banks at risk for regulatory fines and brand damage.
“Banks need to address the technological divide that exists between how they have traditionally done things and the future state that will provide them with greater transparency and process efficiency.”