Digital Onboarding Hurdles and How to Destroy Them

Digital services have totally transformed banking. Customer experience management today means less free pens and lollipops, and more apps. The financial organizations that I work with every day have invested heavily in awesome new tools for every stage of the modern customer experience. But in many cases, they aren’t achieving the kind of engagement and loyalty that they are hoping for with their new customers. In this post, I’m going to run through the stages of digital onboarding for financial institutions. I’ll finish by looking at the best practices for solving the challenges at each stage and really cementing the customer relationship.

Stage One: Opening the Account

Critical hurdle: Obtaining customer information
Existing solutions: Online applications, information capture including scanned identification through apps

Let’s say someone is interested in becoming a customer of your financial institution. How do you make it happen? First, you gather necessary information from the prospect, such as their name, address, and government-issued identification. You run background checks as required by law or your bank policies, including OFAC, credit, and others as needed. Finally you make a go/no-go decision regarding new customer status.

The leading vendors in this category such as BottomLine and Avoka have done a great job of improving the customer experience by using applicants’ channel of choice. For example, they eliminate tedious data entry and trips to the bank branch or post office by allowing applicants to submit scanned identification documents. By offering more, up-to-date methods of completing each step of the application process, these services incentivize customers to persevere and succeed in finishing the process.

Stage Two: Switching from the Old Bank to the New Bank

Critical hurdle: Forms, communicating with employers, utilities, creditors
Existing solutions: Some automation is now available

Congratulations! You have a new customer. Technically, their accounts exist. However, you need to get them functional. The customer must set up direct deposit with their employer’s human resources department and switch an ever-growing number of automatic bill payments. This complex process has long been a source of friction in transitioning newly opened accounts to profitable banking customers.

Companies like ClickSWITCH have done a very credible job automating the paperwork, though some challenges persist. Unfortunately, many banks have not adopted these automated processes. They still require new applicants to download PDF forms, fill in data by hand, and distribute to the intended recipients themselves. The steps end up happening slower or less thoroughly than the bank would like. Sometimes the customer doesn’t follow through at all, leading to dormant accounts. Even if the paperwork is automated, the bank still relies on the acount holder to intiate the steps. That leads to the next phase: engagement.

Stage Three: Engagement

Critical hurdle: Getting the customer to complete the onboarding process
Existing solutions: Concierge desk, checklists on the website

Once your customer can start to receive deposits and pay bills, you enter a third phase, which is arguably the most important. Many banks overlook the importance of making sure that new account holders are engaged, whether they have just become customers or have added new accounts to existing portfolios. Digital onboarding typically occurs over a 60 to 90 day timespan, during which it is extremely important to effectively communicate with the new account holder.

Engagement means profitability for banks, according to Javelin’s white paper “Convert ‘Silent Attrition’ into Banking Engagement and Profits”. Javelin’s research indicates that the engaged checking account customer is $212 more profitable per year than an inactive customer—who actually costs the bank money over the first three years of account ownership. This engagement means more than just sending reminder emails, though. Timely messages, via the customer’s preferred channel, with content that guides them purposefully through the onboarding process: these are the components that lead to a profitable banking customer.

Solve Onboarding Hassles with a Unified Strategic Vision

With so many challenges to overcome, and a multitude of new apps and tools coming on the market each year promising to help your financial institution fix particular parts of the digital onboarding problem, how do you invest wisely? A lot of the challenges with customer experience management and financial institution technology integration can be solved by taking a 360-degree view. Financial institution leaders grasp the importance of engagement in the onboarding process. They understand that an integrated, multichannel approach is essential to creating that engagement in the digital era. They also recognize that all of their customers are unique, with different needs and preferences, necessitating sophisticated segmentation of communication strategies.

As a financial institution leader, you want your decision makers to be able to deploy all the tools at your disposal, at every stage of the customer journey, to help successfully support their strategies for customer engagement. You want a multichannel campaign management (MCCM) system that allows segments to be defined in strategies across many different attributes and factors such as stage in the process, demographics, FICO score, or combinations thereof. This granular and dynamic segmentation should interface with the platform’s communication capabilities to deliver targeted messages via customers’ preferred channels, whether Web, SMS, or email. Steps such as welcome packets, direct deposit and online banking enrollments, check ordering, and presenting appropriate offers can then be built into your onboarding strategies. And all of this needs to be protected by top-notch data privacy and security practices. A highly customizable, flexible solution would integrate well with other tools and systems, allowing you to continue to adjust your strategies as new solutions come to market.

Invest in Customer Experience Management

Deploying a unified vision, consistent communications, and cutting-edge technological solutions sounds like a great way to overcome the long-standing hurdles of the digital onboarding process. It takes good strategic thinking and careful planning to set up such a plan, so you want to be certain that the investment of time and money will be worth it.

Fortunately, the research shows that targeted investment in banking customer engagement pays off. The Javelin report cited above indicates that just solving the one problem of customers who find it too difficult to shift direct deposits and bill pay to their new bank would increase the percentage of new customers who are fully engaged from 45% to 54%! And remember, they also found that a fully engaged customer earns the bank $212/year in profits, while inactive accounts actually cost money for the institution to maintain.

Perhaps it’s time to smash the digital onboarding hurdles that stand in your customers’ way.


Katabat works hard to make it easier for you to gain satisfied, profitable customers. Katabat Digital Onboarding is a fresh, comprehensive approach to providing a 360-degree view and full-scale strategic control of onboarding operations. Contact us today at or request a demo to learn more about our full range of customer experience management products.


Katabat is the leading provider of debt collections software to banks, agencies, and alternative lenders. Founded in 2006 and led by a diverse team of lending executives and leading software engineers, Katabat pioneered digital collections and has led the industry ever since. It is our mission to provide the best credit collections software in the market and solve debt resolution from the perspectives of both lenders and borrowers.

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