Banks, credit unions and financial institutions are known for being notoriously late adopters for new technologies and systems. A great example of this is the clunky and disorganized onboarding systems that many financial institutions have set up today. The financial brand Digital Report showed in a study that 47% of organizations still have no formal onboarding process. This lack of formal onboarding processes can lead to disorganized, complicated and lost applications for many prospects that are actually interested in opening an account with the financial institution, credit union or bank. This can cost the financial institution a significant amount of business, as onboarding new members is a tricky and costly feature for banks, credit unions and financial institutions. Furthermore, proper onboarding can lead to higher retention rates and better satisfaction from clients, members and customers. This article will show how greater onboarding systems can increase business by as much as 40%.
The Greatest transfer of wealth in history
It is a well-known fact that Baby Boomers will soon lose their position as the richest generation in the world. As families age, parents will start handing their wealth down to their kids. This wealth will be created on top of the wealth that the children have already developed and amassed, leading to even larger amounts of wealth held by younger generations. Forbes estimates that the millennials will inherit $68 trillion from their Baby Boomer parents by the year 2030. Therefore, a major focus for any bank, credit union or financial institution should be to respond to the banking needs of the millennial generation. This generation gives banks, credit unions, and financial institutions great opportunities for new and exciting business.
Now, the greater question is how to capture this millennial generation: what they are looking for from their financial institution, what are their wants and needs, and who tends to be their current banking provider.
What millennials want from their financial institution
Many studies show that millennials have different banking needs compared to their parents. They want extremely speedy banking services, accessible from anywhere and prefer banking mainly using mobile devices. This is how so many branchless banks made during the FinTech revolution have performed so well: they understood that the banking needs were changing, and therefore adapted their banking services to the future generation. This allowed a complete change in the way that financial institutions can become successful.
One element that millennials hate is lots of red tape and formal services. Millennials hate banking in general (except for getting jobs) because they don’t like standardized procedures and restricting their freedom. FinTech captures this by having the process be fully online, which makes the millennials feel like they are being independent and in charge of their own finances.
Of course, this millennial wave is seen by the current level of overall satisfaction that people have with their current banking provider: 31% of people are unsatisfied with their current banking provider, and 15% are actually thinking of switching in the next 6 months!
Millenials are ready to switch their checking and savings accounts, presenting a tremendous opportunity to acquire new business
This presents one of the most tremendous times in history to go ahead and snag new prospects, as people are more and more willing to switch their current banking provider compared to before.
The importance of onboarding
Onboarding is technically the first experience that a prospect will have with the bank, credit union, or financial institution, so it is imperative to make that experience as exquisite as possible. It is well known that first impressions are the impressions that last the longest, and the first impression is done through bank onboarding.
For the average financial institution, it can take up to 26 days to onboard a new prospect. In this day and age where the average person’s attention span is shorter than that of a goldfish, 26 days is simply too long and many people will end up abandoning their application.
Although digital onboarding is important, if it is not properly designed or takes too long then there are significant risks that the application will become abandoned. It has become clear that Gen-Z will not support a poor onboarding experience. This is best shown by the fact that 68% of Europeans have abandoned a digital banking application that they started. This is not a great scenario, as the people who abandon their application have already gotten a bad experience with the bank, credit union, or financial institution, and therefore will be much tougher for new prospects to try to win back. Since first impressions last the longest, a poor onboarding experience can lead to many, many abandoned applications. Banks, financial institutions and credit unions may not even be aware of the massive amount of potential business that they are losing due to poor bank onboarding systems.
How onboarding can be improved
It is understandable that many financial institutions may believe that onboarding takes so long due to the fact that the banking industry is highly regulated, and therefore everyone must go through a specific process in order to validate their account and ensure that they are eligible for the account, loan or banking service that they are applying for. However, thanks to automated banking compliance software and services that exist nowadays, all compliance measures that used to take many days can now be completed in minutes!
It is easy to comprehend why many banks, financial institutions and credit unions loathe innovation. These financial institutions handle money, and want to take the least risks possible with their money. This is understandable, as tech can fail often without consequences, but when banks fail it can cause an economic collapse. Financial institutions do not have room to fail, therefore they must use what already works. Whatever bank onboarding system they have in place works, so why change?
The reality is that new bank onboarding systems are simple to implement, and can assist a bank, financial institution, or credit union in acquiring much, much more business. Better digital onboarding experiences can experience a 40% higher conversion rate, and since the majority of the people who onboard digitally are millennials, this means that the prospects onboarded have a much larger customer lifetime value compared to other prospects that exist.
NimbleFi, the all-in-one bank onboarding solution
NimbleFi is a Fintech company that can help your bank, credit union or financial institution get up to date with the current Fintech trends and technologies. The #1 pain for banks, credit unions and financial institutions for the past 3 years has been bank onboarding, therefore solving this pain is NimbleFi’s primary focus.
With NimbleFi, a prospect can be onboarded from start to finish in 15 minutes or less! Thanks to advanced KYC methods that are more than 98% accurate and that take less than two minutes, the prospect can move his application at blazing-fast speeds! Furthermore, unlike most bank onboarding system solutions that require the financial institution to completely change their architecture in order to implement their Solution, NimbleFi provides a plug-and-play solution that will fit any bank, credit union or financial institution’s current architecture!
The best part with NimbleFi is their ease of implementation and wide array of services. From bank core connection services to improving banking onboarding systems, NimbleFi can provide all of your FinTech needs in one simple process! The best part with NimbleFi is that unlike its competitors where the solution can take multiple months to implement, NimbleFi can have its solutions running within 48 hours!