Anyone who has opened a merchant bank account can attest to the fact that slow and complex customer onboarding is a problem. If you are a bank executive in charge of customer experience, you probably want to understand this problem and find a solution. Finding the solution is the easy part – modern technology has enabled new business processes to allow automated customer onboarding, shortening application time with one standardized process that uses intelligent forms, automated underwriting, and automated data collection capabilities. Understanding the problem of slow customer onboarding, however, can be a challenge and requires an understanding of the needs and expectations of business customers. In this article, we explain what business customers want and why banks need automated customer onboarding.
What Do Merchants Want, And Why Do They Leave?
Merchants sign up for a merchant account because they need the services that the bank provides, and they need those services as quickly as possible. Slow customer onboarding can disrupt a merchant’s normal operation and leave a negative first impression on your customers. There is a real risk of losing customers within the first few weeks or months after an account is opened; especially if your sales team set expectations that are not fulfilled. Too often companies are opaque in their messaging, leading to miscommunication in the services that they offer (Choosing the Right Payment Processing Solution For Your Solution, Forrester 2016). For example, some merchant acquirers claim to be processors, processors claim to do everything a customer needs, or customers end up finding themselves with poorly handled chargebacks.
Most merchants that open new accounts with an acquirer are switching services from another acquirer. During 2014, businesses faced approximately 22% merchant attrition. Merchants that leave have been convinced that switching will improve their business by saving money, decreasing risk, or providing higher return on capital. In the short term, however, the experience of switching acquirers creates uncertainty and anxiety for a business. The shorter and less uncomfortable the transition period, the better. A fast onboarding process instills confidence in the customer and gets them using the bank’s services more quickly, resulting in a positive customer experience and revenue from the customer much sooner.
Why Speed Is So Important
Today’s businesses do their homework on the internet to find out what to expect from banks. They use comparison websites to compare features and pricing before speaking with a sales person, and have a greater understanding and awareness of fees, rates and competitors’ offerings. Technology has conditioned businesses to expect a fast experience in everything. In an effort to match new customer expectations established by disruptors like square, global powerhouses like Global Payments and Vantiv have adopted Agreement Express to reduce onboarding times from 2-13 weeks to 30 minutes, and 120 minutes to 5 minutes respectively. A fast onboarding process creates a positive first impression and will reduce the probability of your your customers debating between two alternatives, especially if the alternative is much more difficult to apply for.
Failure to meet customer expectations are two-fold:
1) It means you’re still using traditional, manual, labour intensive onboarding processes that pose a scalability issue. Customers are no longer willing to wait weeks for application approvals.
2) Frustrated customers during the application process risk increased application drop-out rates. Prior to improving operational processes, Global Payments had a 40% return rate in applications, while another large payments firm faced a 25% return rate.
Ultimately, banks that do not meet customer expectations will risk losing prospective customers who value a fast and smooth onboarding experience.
Speed is critical to reduce customer uncertainty and to manage expectations. Technology development has brought about the ability to deliver an automated customer onboarding solution, and measure the gains it offers. According to Forrester, price is the reigning incentive offer that merchant banks offer to their customers in an effort to reduce merchant attrition (Choose the Right Payment Processing Solution For Your Organization, Forrester 2016). An automated customer onboarding platform can help reduce cost per application, increase underwriting speed, and ultimately allow for better price incentives (among other benefits) without sacrificing margins.
Using an automated onboarding platform tailored specifically for your needs reduces the risk of changing your customer onboarding process, and can realize dollar gains through faster times to revenue, and lowered costs.
Interested in how an Automated Customer Onboarding Solution works? Download our latest eBook, The Merchant Acquirer’s Ultimate Guide to Onboarding More Merchants