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Transforming Client Onboarding for Commercial Banks
How incumbent banks can challenge the challenger bank to drive market share through modernizing their onboarding experience
In this article, we will explore the transformative power of fintechs and the role they play in revolutionizing client onboarding. With projections indicating the commercial and corporate banking sector’s potential £3 trillion in revenue by 2026, now is the time to embrace technology, automate processes and redefine the client experience.
Ready for transformation?
The path to success in commercial banking hinges on delivering a seamless client experience. This article will uncover:
Global banking revenues are poised for a substantial uptick, which has been driven by growth in the commercial client base. In this landscape, the seamless experience of banking customers takes center stage, becoming instrumental in acquiring a more substantial market share in business, commercial and corporate banking.
The key to success lies in deepening the value of banking relationships, both through efficient onboarding and day-to-day servicing. Projections indicate that the commercial banking sector is anticipated to reach a staggering £3 trillion in revenue by 2026. This growth, boasting a CAGR of 6.4 percent from 2022, significantly outpaces the retail banking sector’s CAGR by 6.2 percent. Perhaps it’s no wonder that enhancing the client experience stands as a top priority for 83 percent of commercial banking executives.
As per industry surveys, more than half (54 percent) of commercial banking clients are currently scrutinizing their banking relationships. Additionally, streamlining client onboarding remains a challenge, with incumbent banks averaging anywhere between seven to 42 days to onboard small and medium-sized enterprises (SME) or business banking clients.
The stakes are high, with banks losing an annual revenue of £3.3 billion due to KYC and Anti-Money Laundering (AML) challenges that negatively impact the client experience. The road to harnessing these growth opportunities requires innovation and an unwavering commitment to delivering excellence in client service, both before and after a client becomes a bank’s customer.
The onboarding process for commercial clients often proves to be a labyrinth of manual processes and multiple touchpoints, resulting in high levels of dissatisfaction:
These hurdles present a pressing need for banks to revamp and modernize their onboarding processes to meet the expectations of commercial clients in the digital age.
Fintechs are spearheading a transformative shift in the onboarding process, turning weeks into mere minutes. Traditional onboarding processing times have been heavily decreased to two to 48 hours (from downloading the app to first transaction).
The magic behind this remarkable transformation is in tackling the problem with a four-pronged approach: digitizing customer journeys, reimagining colleague interventions (with objectives to achieve Straight-Through Processing (STP)), updating policies and modernizing legacy systems. A combination of this approach leads to results with an astonishing 80-90 percent reduction of manual Full-Time Employee (FTE) effort for standard scenarios, ensuring a more efficient and pleasant onboarding experience.
Client satisfaction remains at the core of fintech onboarding, with the Net Promoter Score consistently exceeding 70, showcasing the success of these innovative approaches. Further enhancing the appeal, fintechs boast an impressive 85-90 percent completion rate, spanning from initial registration to submission.
Fintechs also lead the charge in:
Future State Highlights (2–48-hour goal)
- 5-10 minutes to submit pre-filled application
- 2-10 hours for complex cases
- Dedicated platform, allowing multi-user and multi-entity scenarios
Client Segment Considerations
- Self Service journey for Business Banking and lower-end SME
- RM-initiated journey for higher-end SME and Corporates
Technology Interventions
- Login via Identity and Access management solutions
- Recognize customer from internal and third-party data sources
- Collaboration tool (chatbots, video calls) setup for complex cases
- Allow entry via multiple channels (mobile app/web)
Future State Highlights
- 3-5 minutes to scan documents and upload video for identity check
- 2-24 hours for complex cases such as complex ownership structures
Client Segment Considerations:
- Real-time verification of documents and information
- Provision to complete onboarding through Authorized Representatives
Technology Interventions:
- Real-time data checks for continuous evaluation through identified standard golden sources of data, such as Companies House
- Dynamic document requests in digital format
- Document quality check, OCR and storage – document upload capability
- Application tracker with real-time status shown to Relationship Managers and customer
- Real-time ID and liveliness checks where applicable
Future State Highlights:
- 3 hours for screening and risk assessment
- Integrated colleague process/workflow with exception management and special routing
- 8-12 hours for complex cases (Factoring in waiting time for customers to respond to queries and agreement between multiple directors in a multiple jurisdiction setup)
Client Segment Considerations:
- Additional validation of UBO structures for higher-end SME and Corporates
- Provision to set up complex permissions and approval structures
- 360-degree view of customer for colleagues to review
Technology Interventions:
- Maker/Checker review – automated customer screening, risk and finance due diligence assessment using AI-integrated client lifecycle management system
Future State Highlights:
- Instant onboarding confirmed via push notification for all cases
Client Segment Considerations:
- Provisions to recommend products and services based on business
- Multi-product fulfilment capability post client onboarding
Technology Interventions:
- Automated account opening/fulfilment post decisioning
- Instant notifications to customers and Relationship Managers
Future State Highlights (2–48-hour goal)
- 5-10 minutes to submit pre-filled application
- 2-10 hours for complex cases
- Dedicated platform, allowing multi-user and multi-entity scenarios
Client Segment Considerations
- Self Service journey for Business Banking and lower-end SME
- RM-initiated journey for higher-end SME and Corporates
Technology Interventions
- Login via Identity and Access management solutions
- Recognize customer from internal and third-party data sources
- Collaboration tool (chatbots, video calls) setup for complex cases
- Allow entry via multiple channels (mobile app/web)
Future State Highlights
- 3-5 minutes to scan documents and upload video for identity check
- 2-24 hours for complex cases such as complex ownership structures
Client Segment Considerations:
- Real-time verification of documents and information
- Provision to complete onboarding through Authorized Representatives
Technology Interventions:
- Real-time data checks for continuous evaluation through identified standard golden sources of data, such as Companies House
- Dynamic document requests in digital format
- Document quality check, OCR and storage – document upload capability
- Application tracker with real-time status shown to Relationship Managers and customer
- Real-time ID and liveliness checks where applicable
Future State Highlights:
- 3 hours for screening and risk assessment
- Integrated colleague process/workflow with exception management and special routing
- 8-12 hours for complex cases (Factoring in waiting time for customers to respond to queries and agreement between multiple directors in a multiple jurisdiction setup)
Client Segment Considerations:
- Additional validation of UBO structures for higher-end SME and Corporates
- Provision to set up complex permissions and approval structures
- 360-degree view of customer for colleagues to review
Technology Interventions:
- Maker/Checker review – automated customer screening, risk and finance due diligence assessment using AI-integrated client lifecycle management system
Future State Highlights:
- Instant onboarding confirmed via push notification for all cases
Client Segment Considerations:
- Provisions to recommend products and services based on business
- Multi-product fulfilment capability post client onboarding
Technology Interventions:
- Automated account opening/fulfilment post decisioning
- Instant notifications to customers and Relationship Managers
This north-star vision is supported by a composable solution, which enables seamless digital customer onboarding, leveraging multiple systems:
1. Engagement Platform
2. Onboarding Capabilities
3. Core Systems
Publicis Sapient has designed and built leading onboarding experiences for some of the world’s leading financial institutions and challengers to drive business growth leveraging best of breed partner ecosystem that enable seamless digital onboarding:
* Not an exhaustive list
The business and commercial onboarding process stands at the crossroads of immense opportunity and substantial challenge. As this article explored, the path to securing a larger market share in commercial banking hinges on the delivery of a seamless client experience.
It's time for a paradigm shift in commercial banking onboarding. Fintechs have paved the way with rapid, efficient and client-centric processes. Now it’s time for traditional banks to rise to the challenge and redefine their onboarding experiences.
As commercial banking executives prioritize enhancing client experiences—and clients themselves seek streamlined onboarding—it’s a pivotal moment to consider transformation. By embracing technology, automating processes and providing a holistic, digitally driven approach to onboarding, the onboarding experience can be revolutionized.
The future of commercial banking is here. Connect with us to explore how your institutions can embark on this transformative journey and ensure that you are not just part of the growth story—you’re leading it.
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