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Monday, June 24, 2024

What Is The Client Onboarding Process In The Banking Sector?


There’s something I used to hear very commonly: If you’re working in finance, avoid looking around you. When I first heard this advice I thought it sounded outlandishly stupid. Why would any self-respecting business professional advise me to ignore others? Then I decided to really go against his advice and I found out why. Every building around me, from floor one to 42, every office, and every street was filled with finance.

You work in finance, yes. So does everyone, and you need to not get distracted by the truth of how absurd the competition is, and just focus on making your product better.

It took a long while for me to understand this fact. In today’s world where finance no longer even means you have to shell out a lot of money for a modern office in a top-class property in the central business district, or kyc verification, this is even more true.

This is why a lot of financial institutions previously known for having atrociously bad client and customer experience have pivoted to almost solely focusing on that.

Sign-ups in just a few clicks, always-on customer service chatlines, and even your contractual documents are available on the blockchain and everything is verifiable through an e-signature. Money is now a service rather than a profession, and part of that service is the customer experience.

Today in this article, we’re going to be talking about how you can improve your customer onboarding processes to ensure your brand stands out amidst the sea of financial options.

What is client onboarding?

When people talk about customer onboarding, they’re usually talking about a variety of processes relating to the first experience the customer has with your company. This customer could be a client as big as FAANG, or a small business looking to start a merchant account to collect earnings.

Either way, financial institutions have wizened over the years to understand that all clients are important and that customers treat financial institutions with very high standards. Clients want to be able to contact banks at all times, right away, and in the channels they prefer.

Due to the information age, lines at the bank’s outlets have been cut short dramatically, but this also means that more staff each year are being trained to deal with client inquiries through other online mediums.

This puts tremendous pressure on banks in the current day to invent and fine-tune their client onboarding processes to ensure customers get the best service possible.

Why is Client Onboarding important?

Client onboarding might at first seem like the means to the end, meaning that once a product is conceived, the onboarding process is merely the way to get that to the customer. This is a fatal misconception.

It has been shown that what determines a customer’s satisfaction and whether or not they quit your company to work with some other bank is determined in the first three months. This means that it is almost wholly dependent on the onboarding process to ensure customers are through with what needs to be done and all the legal documentation and due diligence are collected with minimal trouble from the client’s side. They’re running a business, after all.

Client onboarding for a bank is a process that has heavy stakes in the fields of referrals, customer experience, client loyalty, brand goodwill or positioning, and ultimately, profitability. If you have the most client-forward product in the world but if it is a difficult one to onboard, whether that be technical or customer service related, there is a high chance it won’t make it to market.

You can see now that client onboarding has roots all the way into the design of product offerings and top-level strategy.

Client Onboarding in a bank

When it comes to the client onboarding process of commercial banking, the onboarding process is initialized as a one-time activity where the processes of data capture, due diligence, documentation, account setup, and further communication are done.

This sets up the account and most of the work, but note that in the months following, there likely will be details of your bank’s service that will have to be followed up on. This can fall under the area of relationship management, technical support, or legal, depending on the nature of the follow-up.

This puts banks under constant pressure as banking product requirements are unique in the fact that they require the seamless communication and operation of many departments. These departments include:

  • Credit
  • Debit
  • Operations
  • Legal
  • Compliance (Due-diligence)
  • Customer Service
  • Risk
  • Tax
  • IT

Process and Regulation

One of the larger themes in onboarding challenges is process and regulations. Firstly, there simply isn’t a standardized process for banks across many departments. If you’re a client yourself and all you see is the front office handling your inquiries and account generation smoothly, you’ll be surprised to learn of the chaos behind her screen.

A key part of the hurdle happens with compliance officers within the different departments of operations, credit, and legal. The way client onboarding is ultimately handled and handed off between departments comes down to how these officers interpret the particular restrictions and codes. This means that entities can have problems even down to the smallest technical minutiae.

The easiest way to spot such a problem in an onboarding process is being told to provide the same information multiple times throughout account creation.

Another big issue is in the regulations themselves. If such regulations stayed set for a long enough period of time, departments could carve out time to really get their process together. However, regulations change at a weekly or monthly rate. This means that banks are always trying to create processes that are fluid enough to change with their operations.

This means that banks might not always be able to maximize their operations’ efficiency.


Just like in any other aspect of selling and marketing, the customer onboarding experience is the most human factor of your business. The fact is that once the client wants to do business with you, it becomes doubly painful to have clients “churn” and lose sales you already sunk millions into mass marketing and public relations to get.

Know that with every other aspect of business, it pays to have experience, and to go through it yourself. Our tip? When running into problems with your onboarding process, take yourself through the process, and you can see firsthand where some pressure points lie.

The post What Is The Client Onboarding Process In The Banking Sector? appeared first on InsiderUp.

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