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Automation vs Intuition: Should Onboarding Be Fully Automated?
In the past decade, we’ve seen a gradual shift from traditional onboarding to a more tech-savvy automated approach. Banks that embraced new technologies in 2021 and 2022 saw significant benefits as fintech adoption surged. However, by 2023 and 2024, the growth rate of fintech adoption has decelerated, prompting a reevaluation of the effectiveness of automation.
That then begs the question – is utilising new technologies such as automations worth it? Or is it better to stick to a traditional approach with relationship managers, a pen, and paper being the backbone of compliance, onboarding and client lifecycle tasks? As with everything, the answer is likely going to fall somewhere in the middle.
But let’s take a closer look at these two opposing prospects and see what a financial institution stands to gain from either as well as how our own software fits into the whole picture.
The benefits of traditional onboarding
When we talk about traditional onboarding, we mean a pen-and-paper approach facilitated by a relationship manager, typically done within the bank itself as opposed to online or via mobile banking.
While new technologies might be more attention-grabbing and attractive, there are certain aspects of onboarding that can’t be fulfilled via code alone. And depending on the specific needs and values of any given bank, these can be the deciding factor.
Namely, people will always react differently when talking to a person as opposed to looking at a screen. Furthermore, even with how advanced technology has become, the human mind is still unparalleled in certain areas.
Lastly, there’s the emotional response. Regardless of how well new generative AI can mimic human speech, it can’t elicit empathy or respond to it.
All of these changes materialise in a few key differences.
Clocking suspicious activity
While there is plenty of automation software that can handle compliance, including Atfinity; it’s much harder for software to detect certain inconsistencies in a customer’s story or notice suspicious behaviours without a baseline to compare it to.
For example, during the initial onboarding process, there’s no “golden customer” for the software to compare new customers to. Thus, it can only clock behaviours outside of the norm during the lifecycle process in the context of an individual customer. On top of that, automation processes are going to be limited in scope based on how they were designed.
A person, on the other hand, can ask follow-up questions, make observations, and potentially see through flimsy lies. They can then note down their findings and even prevent risks later down the line.
Of course, a bank doesn’t have to investigate every customer further than what is described by the law, their compliance framework and their risk policies. And very often a simple background/KYC check will raise the alarm for suspicious individuals.
However, human intuition still has the edge when it comes to these fringe cases.
A better first impression for some demographics
In Europe alone, there are over 5000 banks for people to choose from. Therefore, making a good first impression is essential! And while some people might prefer to do their banking via their phone, others will prefer to talk to an advisor.
For one, some people don’t like the rapid digitalisation of banking systems. This is especially true for older generations who aren’t used to interacting with screens all the time.
Reports even show that some potential customers are turned away from highly digital banks as it makes them feel like they have less control over their finances.
And as we’ve mentioned at the start, a friendly hello can sometimes help a lot more than even the best-designed user interface.
How We Ensure Optimal Onboarding for Our Clients
Even before a company decides to work with us, during discovery calls, we ensure that we understand all of their requirements and specific business needs. We offer more than plain demo sessions. Our team asks detailed questions to find out what an organisation wants to do and what its main problems are. After that, we create a customised solution, a “prototype” of what the actual onboarding would look like. Then, we present it to our prospects to inspire how their future process could feel.
Once an organisation decides to become our client, we offer training to their employees who will be using the platform. After the whole onboarding process is created, according to their exact needs, they continue using it themselves, without needing our help. However, most of our clients continue working with us long-term because they usually add new services and products, and also often need to adapt to regulations. Our team conducts weekly or monthly meetings with clients, ensuring that their onboarding fits their changing business and stays effective.
Added help
No software engineer can predict every single question that a customer might have. In fact, the questions might even be completely outside the scope of the process being handled.
A relationship manager or customer service employee on the other hand can likely handle most questions relating to the process at hand as well as general information. Even if it’s something as simple as which train the customer should take to get back home.
Similarly to the previous point, getting an answer will likely lead to a better first impression and therefore less attrition.
Plus, if the person has concerns about the process itself (for example, why certain information is needed), getting an immediate response and explanation can help calm their worries and stop them from quitting out of the onboarding process.
Recalling information
While this only applies to some onboarding software, it’s still worth bringing up. Namely, CRM systems that have been made piecemeal will often have repetitive tasks and questions. For example, a customer might have to fill out their name or address during account creation and then once again during the KYC step.
And every unnecessary step can lead to friction and potentially prompt the person to opt out of the process altogether.
On the other hand, a person can simply remember to fill out both spaces after asking the first time around. Or they can just refer back to the initial question. Either way, while it will likely still take more time than if done by automation, it will be less stressful for the customer as their position will be passive.
Creating a personal connection
While a Client Lifecycle Management (CLM) system can keep track of details relating to a customer during onboarding so that they can later be used to build a connection with them, it can’t reach the same level as talking to another human.
Whether it’s someone you’ve seen around town, went to school with, or that just seems nice, people tend to form much stronger relationships with other people as opposed to an interface.
This can be especially important for smaller private banks where onboarding one or two extra customers can significantly affect your bottom line.
And studies have shown that when it comes to making important, complex purchasing decisions, 61% of people aren’t satisfied with just looking at an interface. In the context of said study, people want to talk to a real person.
So, why would you want to automate your onboarding process?
The benefits of automation
As the previous section has shown, automation typically struggles when it comes to the emotional response a customer may have as well as its inherently limited scope.
However, in terms of efficiency, it far surpasses any relationship manager. Or at least that is the case when the automation is properly designed and implemented.
And, once again depending on what the bank in question is looking for, automation can offer certain benefits that will simply be too good to pass up.
Constant optimisation
In terms of data, no human can compare to well-designed software. And this fact can lead to many benefits over the years.
For one, a software engineer can A/B test different user interfaces to see which one has better retention. Or have the software take note of when people tend to abandon the onboarding process and mark that section as a trouble area.
In some cases, software can even track how long it takes the average customer to fill out a certain field and determine whether a certain question or field needs added clarification.
All of this is to say that each and every part of the onboarding process can be customised and optimised so that it creates as little friction as possible. And the longer the software is being used, the more data points it will have, and the better it will be at creating a smooth onboarding journey that will maximise customer satisfaction.
Lower risk of human error
Human error is both natural and unavoidable. Whether the relationship manager simply mishears what the person has said or the customer doesn’t fully understand what is being asked of them, the onboarding process can be rife with mistakes.
However, if we go back to our previous point, that doesn’t always have to be the case. For one, you can’t accidentally fill in unnecessary information if it’s not presented to you in the first place. And you can’t forget to check a box if the program doesn’t let you go forward until you do.
In certain situations, an onboarding program might even autofill some of your information, lowering the odds of making an error even further. And fewer errors means less frustration for the customer and less time spent ratifying the situation for the bank. So, a win-win.
Improved customer experience
Technology has always been the vessel for convenience and it’s no different in onboarding. For example, if we look at the signing process, we see two very different pictures.
On the one hand, if you want to physically sign a document, you have to go to the bank, wait in a queue and do it there. And odds are, you will have to sign more than just one paper. Even worse however is if you want to send the signed documents by post, as it can take days or weeks for it to be processed.
Plus, if the document in question needs to be signed by more than one person, who might not even live in the same country, the processing time gets even worse.
On the other hand, with e-signatures, it typically takes minutes to fill everything out. No queues, no travel time, just a few clicks and you’re done.
Attracting a younger demographic
While older generations might prefer the traditional approach to banking, younger, more tech-savvy individuals typically prefer to do everything online or via their phone.
In fact, in countries like the US, over 80% of people do their banking on the go. Therefore, it’s easy to see that this isn’t an isolated phenomenon. And it’s a pretty safe bet to assume that these numbers will only go up with future generations.
So, while in the short-term it might make more sense to stick to a traditional approach in order to attract the older generation, as they on average have a larger income, leaning into automation is much better in the grand scheme of things.
The deciding factor - Atfinity
So far, this has been a pretty even battle, with both approaches offering valuable and unique features. However, as we’ve noted a few times, there are a lot of discrepancies.
For example, while some onboarding software might have repetitive tasks, other software might not, therefore rendering that point moot.
And while a relationship manager might help the customer out and go through the process quickly and effectively, they might also get confused or make a mistake and have to start over.
With all of that being said, we believe that either approach can be made better when combined with our software. Here are the reasons why.
Guided onboarding
Thanks to our rule-based engine, we automatically ensure that the onboarding process is as flawless as possible. For one, it can automatically complete repeating fields on forms, such as your name, meaning that there are no duplicate tasks.
Secondly, it only ever shows fields that are applicable to the customer. So, instead of a 5-page wall of text that you have to navigate through, you are only presented with questions that are relevant to your case.
And even these fields will not become available all at once. By designing it this way, we’ve ensured that the customer won’t feel overwhelmed and that they can easily follow along the process. Not to mention that the program won’t allow you to leave fields empty or complete them in a way different from what was prescribed (for example entering a name in a number field).
Therefore, the rate of errors should also go down, regardless of whether the customer is filling it out themselves or are dictating it to a relationship manager.
Integrations
Atfinity also offers a wide range of integration options that can help you optimise certain parts of the onboarding process. The most significant feature here being Atfinity’s process orchestration capabilities.
By integrating with identity verification and background check providers, customers are swiftly identified, and both the additional Fact Find process and all required regulatory checks are performed automatically.
This means that the risk scoring is performed by taking external sources into account. And through tools like WorldCheck, background checks are performed to see whether the customer might carry any associated risks; for example, whether they’re on a sanctions list. Automating this part of KYC can be especially important as it will lower error rates and help your business stay compliant.
And since Atfinity centralises all of your data, staying organised and finding what you need becomes a lot easier as well! Not to mention that Atfinity boasts impressive security all around, with an ISO 27001 certification and multiple partnerships with security firms.
Therefore, if a bank were to opt for our Atfinity Cloud option, they could rest assured that their data is kept safe from threat actors.
No-code adaptability
While this only affects the banks’ side of the onboarding process, it’s still worth pointing out. Namely, while Atfinity was made by experienced engineers, you don’t have to be one to use it.
To be more specific, it’s made with a very intuitive, no-code approach that allows your compliance team to make changes on the fly without necessarily needing IT support.
This in turn makes your entire organisation more flexible, as you won’t have to wait for weeks or months for a third party to come in and make the changes for you. Not to mention that this level of adaptability is especially important for banks as regulations can and will change quite frequently. In other words, allowing your team to change the software to suit your needs will also help you stay compliant in the long run.
The middle ground
Lastly, there is the option of a middle ground. Namely, having a relationship manager present but having them use automations to speed up the logistical aspect of onboarding. This way, you still benefit from having that human interaction while also keeping things running smoothly.
Plus, in terms of KYC, you get a much stronger process. While automation can identify, verify, and check a potential customer, it can’t fully understand the purpose of any given transaction or process nor can it ensure that it makes sense.
And if you’ve read our guide on KYC, you’ll know that these steps are necessary. Therefore, under these circumstances, having both a relationship manager and good onboarding software that handles KYC is likely going to be your best bet.
Verdict
In conclusion, whether it’s best to fully automate your onboarding process, stick to pen and paper, or something in between depends on your clientele. If your business values comradery and tradition and is aiming for a slightly older demographic, a digitally supported onboarding with a relationship manager in the centre could be the way to go.
However, if it’s more important for you to signify speed, precision and innovation, you’ll get more use out of full automation. And as time passes, this approach will only become more valuable, as tech-savviness becomes the norm and traditional onboarding potentially gets phased out over time.
After all, even if you want a relationship manager to be the face of your onboarding process, automating the background logistics will undoubtedly prove beneficial. It will lower the odds of burnout and give your employees more time and focus to give to the customer, leading to a smoother experience overall.
Therefore, choosing software that can elevate your onboarding processes and free up your workers allows you to have the best of both worlds.
Book your demo today and see why leading financial institutions
worldwide trust Atfinity to drive their digital transformation.
Book your demo today and see why leading financial institutions worldwide trust Atfinity to drive their digital transformation.