Humanizing FinTech #4: How to build a customer-friendly and frictionless onboarding experience

Shamolie Oberoi   /    Content Marketing Specialist    /    2022-11-02

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If there was ever a list of ‘top ten customer experience pet peeves’, enduring a multi-step, document-intensive onboarding process on being promised an ‘instant loan’ would be number 1. After all, there’s nothing more exasperating than undergoing a complex process that could easily have been five steps shorter and much, much simpler.

Financial providers often tend to forget that. In fact, according to financial technology company Fenergo, 36% of financial institutions (FIs) have lost so many customers because of inefficient or slow onboarding, that the potential loss is a colossal USD 10 billion in revenue per year.

Source: https://www.tagitmobile.com/key-components-for-a-successful-digital-onboarding-flow/

For such a key step in the lending process, onboarding experience sure is fraught with friction.

For starters, even FIs with a digital onboarding process often have to collect physical documentation. And for those offering multiple products (say insurance and investments),  customers are made to go through a separate onboarding process for each.

Besides, more often than not, the process includes several unnecessary steps. This is clearly demonstrated in an experiment conducted by Peter Ramsey, founder of a UK-based UX consultancy firm. He opened 12 bank accounts with 12 different FIs, and the results were rather telling.  FinTech firm Revolut required only 24 clicks - while legacy bank HSBC required 99. It’s easy to see which one would be picked by today’s millennial and Gen-Z customers.

So what can lenders and fintechs do to optimize their onboarding processes to the best possible extent? A few things come to mind.

Track the right metrics

You can’t improve something you can’t measure. So, identify the points of friction. For starters, how much time do customers spend at each step of the process? In case they need assistance, what is the response time? How many users completed the entire process but didn’t use the end product?

Getting down the brass tacks can reveal issues that a big picture approach wouldn’t.  Is KYC taking much longer than other parts of the process? Get to work on bringing down time spent. Chatbot taking longer than a few seconds to respond to a query?  There’s your cause for drop offs.

Offer adaptive onboarding 

A borrower with a 750+ credit score shouldn’t have to go through the same onboarding process as a borrower with a much lower score. Ideally, it should be customized to borrower riskiness from the get-go. 

At FinBox, we help lenders boost conversions with adaptive journeys that require risk-optimized checkpoints. We evaluate customers on a 5000+ parameter ML scale, based on which premium users are onboarded with fewer clicks as opposed to standard borrowers (who must pass through several checkpoints). The premium user journey has seen 50% lesser drop offs while the standard journey reduces NPAs by up to 30%.

Leverage Artificial Intelligence (AI) and Optical Character Recognition (OCR)

No one wants to enter the same information repeatedly during onboarding. But what do you do when you need that information at different points in the process? 

AI-powered OCR. This automates ID card scanning and removes the need for manual reading and data entry. While it reduces turn around times, it also brings down chances of error as data is extracted automatically and filled into the relevant fields.

Be transparent about data usage

Changing data regulations have meant that customers have the power - and the right - to decide how and when their data is used. They expect and deserve transparency around why a certain piece of information is being collected and how it will be used.

This is especially important when lenders leverage alternate data to profile customers. Be clear about your privacy policy and in instances where you’re asking for something particularly sensitive, mention why it’s important (think a hovering notification or a link leading to your FAQs).

Nudge customers in the right direction

Onboarding is a complex process, and users often get overwhelmed and abandon it midway. So it helps to have a push in the right direction - and that’s where nudges come in. These notifications facilitate onboarding by:

  • Anchoring a customer’s attention by showing them their pre-approved loan amount (if applicable)

  • Encouraging them to explore features like a loan eligibility or interest calculator to dispel fears of large impending EMIs

  • Allowing them to save-and-resume the application if left incomplete

  • Redirecting customers who have abandoned the application with well-timed notifications

The FinBox conversion kit uses nudge-driven optimization to improve conversion rates by 50%. It allows platforms to trigger nudges throughout the stages of the application process at customizable intervals.

Enable guided journeys 

Guided onboarding ensures that your customer has the tools and information to complete the process independently. Nudges, mentioned above, are an essential part of guided onboarding journeys. Very simply, you don’t want customers wondering why or how they’re meant to complete a certain step. And if they make a mistake, it’s on you to let them know what it is and exactly how to fix it. Show them the way, without making them feel like they were lost in the first place.

Conclusion

Putting the customer first involves thinking of each step, each product from their perspective. When we ask ourselves how we would want a certain process to be as customers, that’s when we can design an onboarding system that’s truly seamless and intuitive.