Believe it or not, customer churn is inevitable for every industry. Unfortunately, banking and financial services are no exceptions. Given the evolving competitive landscape and myriad of options to satisfy GenZ banking needs, banks need to ensure consistent customer experience from customer acquisition to customer onboarding and beyond. For the banking sector, where the average CAC is $300, losing out on customers due to poor customer experience means incurring losses on the marketing budget and losing future revenue. So, what should your customer acquisition strategy include to minimize friction, reduce churn and build customer loyalty for long-term revenue growth?
To Improve Your Customer Acquisition Strategy, Streamline Your Customer Onboarding
As customer acquisition translates to customer onboarding, businesses must deliver an elevated and engaging experience as early as the new client interaction begins. As per research from thinkJar, identifying customer issues at the first engagement can easily reduce churn by 67%. Based on these findings, businesses need to simplify the verification and KYC due diligence processes.
Unfortunately, the stricter rules for KYC due diligence force financial institutions to implement complicated account verification processes. Yet, customers preferring digital banking, particularly GenZ users, are not often flexible with a customer onboarding process that involves face-to-face interactions. Such a scenario could easily result in churn for these customers.
AI-Automation and Digital Customer Onboarding
Banks that lack customized rules engines and limit automation for end-to-end KYC processes are likely to suffer customer churn days before they onboard good customers. Investing in a fully digital customer onboarding platform with an integrated AI automation solution can ideally reduce friction from the KYC process and improve customer engagement.
Once an institution implements automated technology, it becomes easier to mimic human interactions and automate repetitive activities. As a result, you can speed up all steps of the verification process during the qualification stage and easily reduce any additional budget that you would otherwise need to invest in an extra workforce. In addition to accelerating the verification process, automated and fully integrated digital customer onboarding solutions can be programmed to follow if/then rules, helping you monitor and flag discrepancies in the documentation and thus accept more good customers.
As part of your customer acquisition strategy, it is crucial to invest in technology solutions that not only help you digitize your customer onboarding process but also protect customer identity, prevent fraud loss and provide continuous risk assessment capabilities.
Increase Customer Engagement
Increasing customer engagement is another key component of a foolproof customer acquisition strategy, Often, customers need additional information as they enter the verification process. If they find information missing or inaccessible, they are more likely to abandon the account.
Additionally, banks that still employ legacy systems are often unable to implement process efficiency. As a result, teams can be disengaged and unaware of the status of a customer account. When customers want to know their progress report, more often than not, they are unable to speak with the same contact they connected with earlier. This disconnect instantly causes frustration and dissatisfaction within the customer onboarding journey.
Customers appreciate a transparent process without unnecessary delays. An automated and unified digital platform like Instnt centralizes all customer communications in one place. As such, it serves as a convenient gateway to capturing customer information and delivering on their expectations. Institutions can provide exceptional customer experience and encourage users to increase referrals while reducing customer churn.
Manage Churn with Data Analytics
Customers can leave at any time during the verification process if their experience is not integrated. Many banks and financial institutions allow customers to engage in an annual survey to register their feedback, yet it is too late by that point for banks to identify a glitch or fix an issue in the customer onboarding process.
The most convenient way to identify errors in the customer onboarding process is by customizing your data model to enable you to harness smart insights. By analyzing the patterns in the dashboard, you can easily discover the reasons for customer churn and prepare an improved strategy that removes friction and enables a smooth customer onboarding experience.
Knowing that acquiring a new customer costs more than retaining a customer, institutions must focus their customer acquisition strategy on the significance of data intelligence. It is increasingly important to leverage an intelligent data-driven solution to analyze structured and unstructured data easily and fulfill business objectives.
Partner with a Fully-managed Digital Solution Service Provider
As you seek to strengthen your customer acquisition strategy, it is essential to embrace automated digital solutions to launch a highly efficient and powerful customer onboarding process. If an additional investment burden has prevented you from deep diving into embracing the technology, keep in mind that Instnt can provide a ready-to-use and customizable solution for you.
As the leading technology firm, Instnt is renowned for helping banks and financial services introduce to their KYC program a robust mechanism. By utilizing the digital customer onboarding platform, you can seamlessly tap into the potential of automated and integrated artificial intelligence and machine learning algorithms. As a result, you can optimize the customer acquisition process and accept more good customers by removing friction and providing an additional layer of customer security and trust.
Interested to learn how Instnt can help you transform your digital journey and implement a successful customer acquisition strategy? Get in touch today for a personalized demo.
McKinsey & Company - Solving the KYC puzzle with straight-through processing
Mckinsey & Company - Five actions to build next-generation know-your-customer capabilities