How digital and user-friendly is the process of becoming a customer of savings banks and investment banks? And what can they learn from banks that offer a payment account?

A new study from Enigma Consulting shows that savings banks and investment banks can take their onboarding process to the next level by learning from the customer journey of banks that offer a payment account. What is striking is that the onboarding at savings bank and investment banks still mainly takes place via the website, while payment banks offer onboarding via the app and are clearly more committed to innovative solutions.

As an expert in the customer onboarding domain, Enigma Consulting published an article in June 2020 about the onboarding processes of the most important ‘payment banks’ in the Netherlands. This study has been followed up, looking at the onboarding of savings banks and investment banks, referred to as ‘non-payment banks’. We call banks that (among other things) offer a payment account: ‘payment banks’.

If onboarding was not possible via the app, the onboarding was carried out via the website on the smartphone. The onboarding process was completed per bank and assessed on the basis of various criteria. In the study, the researchers concentrated on the customer experience, without looking behind the scenes at the banks studied. The customer journey has been assessed based on three categories:

  • Innovation: by making use of innovative techniques, such as a selfie film and the NFC chip for reading the identification, user-friendliness and fraud prevention can be brought together and strengthened.
  • Usability: the ease with which the customer goes through the process, the lead time, the guidance of the customer through the process and the presence of technical barriers.
  • Security and fraud prevention: all banks have a responsibility to prevent fraud and correctly identify the customer. The banks were assessed on the basis of how the customer is identified, customer identification and verification methods and the extent to which they comply with applicable laws and regulations up front.

The following image shows which savings banks and investment banks were included in the research and which were rated best per category:

Savings banks and investment banks that were included in the research

Non-payment banks not very innovative

Firstly, it was examined to what extent non-payment banks use innovations in the onboarding process and how this relates to payment banks. When identifying a customer, the bank relies on the information provided by the customer. An example is a copy or scan of the passport. The bank then verifies the identity by determining whether the specified identity matches the actual identity, for example through a selfie photo. Innovations in the onboarding process include innovative customer identification and verification methods and the reading of identification via a photo in the app or via an NFC chip.

At the non-payment banks, only DeGiro and Semmie offer the possibility to share the ID with the bank via a photo. At the other non-payment banks, the customer must make a scan of the proof of identity and then upload or email it. In doing so, the customer must manually enter the personal data on the website. This leads to a longer process and can lead to incorrect customer input. Furthermore, none of the non-payment banks offer a selfie photo, selfie film or voice recording as a methode of customer verification.

Non-payment banks not very innovative

In contrast, a majority of payment banks do use innovative identification and verification methods. Five payment banks let their new customer take a selfie photo, three opt for a selfie film and two for a voice recording. Furthermore, at four payment banks, the personal data is automatically transferred to the app by means of a scan of the identification card or by reading the NFC chip of the passport.

Onboarding via app is still in its infancy at non-payment banks

Looking at usability, it is almost impossible for any non-payment bank to perform the full onboarding via the app. This is only possible with asset manager Semmie; this new fintech makes a good impression in all categories. In the other cases, the customer largely goes through the process via the website. The customer fills in the personal data manually in a web form. Moreover, some of the non-payment banks do not have an app at all in which they offer their services.

Onboarding via app is still in its infancy at non-payment banks

At the non-payment banks, BinckBank, DeGiro, Lloyds Bank and Semmie stand out positively in terms of lead time. The customer knows what the savings account number is within an hour. At Semmie it should be noted that the account number is not yet active immediately after onboarding, due to the dependence on the acceptance by their custodian bank. At the other savings and investment banks, this turnaround time varies from within a day to within a week.

The research shows that banks with onboarding via the app score better on usability and innovation. The big advantage of mobile apps compared to mobile websites is the better customer experience. Mobile apps are optimized for a wide variety of smartphones and screen resolutions, apps run faster than websites and apps can use device features such as the camera and GPS. These device features are not possible with onboarding via a website.

An important element of a good user experience is that the customer can use the account and services as quickly as possible. With a number of payment banks, the account is already active within an hour and the customer can carry out transactions. To achieve this, a digitized customer journey is necessary. With most payment banks it is possible to go through the onboarding completely via the app. It is clear that a significant step can be made at non-payment banks in offering onboarding and services via an app.

Security can reduce user-friendliness, innovation is the solution

The third category is “security and fraud prevention”. It is very important for banks to be aware of the latest legislation and regulations and that the processes are fully compliant in relation to KYC and AML.
Payment banks as well as non-payment banks regularly use the identification deposit. At non-payment banks, the primary purpose of the identification deposit is to verify a fixed counter account; with payment banks, this involves derived identification of the customer.

The identification deposit recurs eight times for non-payment banks. BinckBank, DeGiro and Semmie make it possible to pay via iDEAL, while the other non-payment banks still use a manual transfer. This manual transfer is time consuming and goes beyond the direct flow of the customer journey. iDEAL is the solution for this.

The payment banks have included iDEAL as standard in the customer journey. At six payment banks that use the identification deposit, at five the customer can make the deposit via iDEAL and with one this is done via a manual transfer.

Innovation and app give payment banks a big lead

A number of conclusions can be drawn from the research. First, non-payment banks are far behind payment banks in terms of innovative customer identification and verification methods. Second, non-payment banks mainly offer the onboarding process through the website, while onboarding at payment banks is done through the app.

In short, savings bank and investment banks have a lot of improvement potential when it comes to customer experience and digitization of the onboarding process. “Nowadays more and more companies are implementing an App First strategy in which all services, including onboarding, run via the app in order to provide a flawless online mobile experience. After all, nowadays we are more online via our smartphones than via other devices. Innovation and ease of use are closely linked in a positive way. By making use of innovations, the security of the process is promoted without compromising user-friendliness,” says Marc Groot, Managing Consultant at Enigma Consulting and expert in the onboarding domain.

If you want to get more value from your onboarding process and want to know more about an optimal approach to AML and KYC processes, Enigma Consulting can provide you with advice.

Marc Groot
Marc Groot
Executive Consultant
Mahada Abdillah Walie
Mahada Abdillah Walie
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