You never get a second chance to make a good first impression.
This expression applies to people, brands, and yes, digital SME lending companies. Turning prospects into customers is only half the battle when it comes to portfolio profitability. You need to really nail the most important segment of your lending workflow: onboarding.
A smooth onboarding experience lays a foundation of trust and sets up all lending stakeholders for a positive experience. When it comes to onboarding, every customer touch point matters —from your response time, website or app experience, to what and how you communicate with each customer.
As providers of a best-in-class SaaS lending platform, we have seen firsthand the crucial role that customer onboarding plays in driving organizational success. In this article, we are going to share this knowledge as we discuss five tips for successful customer onboarding.
Benefits of Seamless Customer Onboarding
What’s the number one benefit of seamless customer onboarding? You keep your customers.
As opposed to traditional bank engagements — where a customer has already invested a significant amount of time and energy prior to onboarding — in digital lending, a customer can exit the process in a matter of seconds and find another option.
In addition to keeping your customers, other benefits include maximizing the overall lifetime value of each customer, meeting regulatory requirements, and building engagement and brand loyalty.
Meeting regulatory requirements is worth a mention because the responsibility of compliance belongs to lenders and financial institutions. SME lenders are liable for verifying all the information collected during this critical process: personal identity, bank account details, and any nefarious connections behind each applicant. You also must ensure the details are accurate and above board for each new account created.
It’s important to note that regulatory compliance is of paramount importance, but it can also strain the onboarding process. One recent survey from Thomas Reuters (click here to download) found that updated regulatory guidelines for the financial services sector can lead to a more than 20% increase in onboarding time. It can be a challenge for lenders to balance the demands of AML and effective KYC guidelines within a streamlined, digital framework.
Successful onboarding means your digital lending company avoids penalties, fines, and audits—you know who your customers are, where their money comes from, and start each engagement off on the right side of the law.
Your onboarding experience should meet two primary goals:
- Meet the expectations of your customer by confirming they’ve chosen the right lending company.
- Provide a clear, frictionless process for getting the customer acquainted and started with your products and services.
Seamless customer onboarding connects the entire user experience, from account origination through the entire lifecycle of the loan.
5 Tips for Successful Onboarding
Successful onboarding is more than a tedious checklist—it should primarily revolve around building a relationship, rather than carrying out impersonal processes related only to a product.
Too often, SME lenders think of account servicing and relationship building as two separate pieces of the pie, when they should be the crust, supporting every other stage of the relationship.
How do you shift to relationship-based onboarding rather than product-focused onboarding? Here are five tips to get you there.
1. Define “Success” and Establish KPIs
You can’t measure success if you don’t know what it is.
Look at key performance indicators (KPIs) beyond simply the number of accounts activated. While this is a valuable metric to know how your sales efforts have performed, if you stay only there, you lose valuable information for your business.
One substantial benefit of being a digital lender is the ability to track each and every click of your customer journey. For those who start the onboarding process and don’t finish it, examine at which points of the process they jump ship. What percentage of customers don’t complete the onboarding process (churn rate)? What step of the process is most commonly left uncompleted?
In addition to examining your churn rate and where in the process customers leave, look at those who are actively using their credit. How often are they touched? When or why have they failed to engage?
Pay attention to qualitative elements as well, by gathering feedback directly from customers about their onboarding experience. In this respect, customer surveys can provide lenders with profound insight into what is working well and what isn’t.
2. Understand What’s Important to Borrowers
Digital lenders’ most valuable asset is the data they capture. You know how old your customers are, what profession they’re in, where they live, how much money they make, and so much more.
Use this information to segment and analyze your data internally. Look at how each segment interacts with your products and services. Ask questions like:
- What questions do they ask?
- How do they reach out to support (via email, call, or chatbot)?
- Is there a stage of the onboarding process that consistently results in customer confusion?
- Could your organization solve issues before they ask?
For instance, low-interest rates may not be the most important element of your product offering for borrowers. Millennial and Gen Z borrowers look at quick response times, how easy it is to interact with your brand, and even an intangible feeling of trust or credibility.
Don’t forget to look outside your own data as well, paying attention to market research and competitors to analyze trends. Develop a system for grouping every customer’s inquiry and consider assigning a code for each reason.
3. Don’t Forget to Personalize the Experience
A one-size-fits-all onboarding strategy is ineffective: current research dictates that customers need seven or more direct communications for a successful onboarding program. And yet, according to the 2021 Digital Banking Report, a whopping 63% of financial institutions only interact with customers once or twice in the first six months after the initiation of a relationship.
A reimagined personalized onboarding experience should take into consideration the unique circumstances of each customer. For instance, multichannel communication matters more to your customer engagement than you think. Companies with the strongest omnichannel customer engagement strategies retain an average of 89% of their customers, compared with 33% for companies with weak omnichannel strategies.
With a tailored onboarding process, you reinforce your knowledge of why each customer needs a loan. And each successful step restates the benefit they’ll receive by using your company for funding.
4. Get Your Team on the Same Page
It doesn’t matter if you have a team of two or a team of fifty. Every single employee has to shift their mindset from product-centric to customer-centric.
The onboarding process is just as much about the customer learning about their loan and the lending process, as it is about your team learning about the customer’s motivations, behaviors, and preferences.
Help your employees understand the monetary value of onboarding and the customer experience. It can be difficult to tie intangible elements to the bottom line, but these facts from Forrester help to solidify the importance of a solid onboarding process. Firms that prioritize it:
- Show more growth over a three-year period.
- Almost double their return on ad spend.
- Keep a 1.6-1.9x customer retention year over year.
One Equifax executive puts it this way: “Every employee is doing what they think is the right thing to do for their functional area, but sometimes that causes a poor customer experience. We need to get everyone to think like the customer.”
5. Leverage Technology to Improve the Onboarding Process
Using an advanced, automated solution is the only way digital lenders can truly offer a top-of-the-line onboarding process.
By leveraging a best-in-class lending automation software like Onyx IQ, you can seamlessly integrate relationship building into every step of your onboarding process. Get an in-depth picture of who your customers are, take advantage of personalized communication, and grasp exactly what your customers are looking for in your relationship with them.
With the right technology partner, you’d be amazed by the level of detail and personalization you can deliver to your customers. All of this leads to boosted retention rates—highly engaged customers have 3x the annual value compared to others.
Take Your Customer Experience to the Next Level
A highly gratifying onboarding process is only the beginning of what you can accomplish with Onyx IQ. Take your customer experience to the next level by streamlining the onboarding process…and your entire lending business from origination to collection.
Schedule your demo today or email us at info@onyxiq.com.
