Financial Services
Open Banking
Financial Services
Open Banking
June 28, 2024
7 min

Increase Onboarding Conversion with Open Banking

Timothy Shin

Open Banking Expert

Consumers place a heavy value on speed when it comes to completing onboarding. So much so that roughly 60% of consumers will abandon their new account setup or loan application if the process takes longer than 5 minutes. 

A lot of consumers struggle with the onboarding process. It’s clunky and time-consuming, especially since KYC and AML regulatory requirements aren’t exactly the most frictionless parts of the process. So, they abandon onboarding altogether. How can you reduce the rate of customer drop-offs during onboarding?

Easy! Open Banking Data. It’s as simple as that.

But wait! There's much more to this article than just that short snippet. Let's get into the details and explore how Open Banking can give you the data you need to optimize your consumer onboarding.

There is a way to transform onboarding from a friction-laced process into a simple process that your customers will love. With Open Banking API connections, you can connect directly with consumer bank accounts to verify their identity instantly, automate onboarding procedures, and more. We’ll break it down for you all in this blog.

  • How onboarding impacts your business.
  • Where bank data fits in the onboarding process.
  • How to use Open Banking to win over customers.

Onboarding Is a BIG Part of Customer Conversion 

82% of enterprise organizations consider their onboarding strategy to be a key driver of value, and 63% of consumers consider the onboarding process when making a purchasing decision?

That’s a big majority. So, what does it mean for your business? It means that a streamlined onboarding process can influence how your prospects perceive your business. If consumers abandon onboarding because of friction, then your onboarding process is a major roadblock to revenue. That’s what is at stake. 

But Open Banking data can turn that roadblock into a fast pass for your customers and a clear path to revenue for your business. Think of Open Banking as the “catch-all” resource for your customers. They no longer need to go through the friction-laden process of manually onboarding themselves just to access the financial services and products they were interested in the first place.

How Open Banking Data Improves Onboarding 

Open Banking Data improves onboarding by: 

  • Automating the onboarding process and eliminating manual input. 
  • Instantly verifying identity and reducing overhead administrative costs. 
  • Enhancing security and regulatory compliance through clean and accurate bank data.

Open Banking Data Automates Onboarding Processes

Take a look at how long current onboarding processes take. For example, mortgage underwriting can take a few days at best and weeks or even months at worst to approve a loan. 

The longer onboarding takes, the more likely your customers will look elsewhere for their mortgage or personal loan needs. You’ll lose to competitors who have optimized their onboarding process and can deliver their financial products and services faster.

Open Banking eliminates the need for manual input. No more gathering statements, submitting documents, or typing in the wrong info. All customers have to do is sign in to their online banking and consent to sharing their data. The process is quick, simple, and frictionless, which helps reduce churn by allowing customers to automatically provide all the required data in real-time.

Instant Verification Speeds Up Onboarding 

Consider wealth management and investment platforms. Fintechs that offer wealth management and investment as their main service need to conduct robust KYC and AML checks. The onboarding process can take a long time, sometimes several days or weeks, especially if manual document submission and review are involved. 

Now, imagine being a customer waiting to access the financial services you want, only to get stuck in an endless waiting game while you wait for microdeposits and KYC checks to clear. If it takes too long, you’ll probably shop around for a faster, easier solution. The stats don’t lie: more than half of consumers value speed. 

Too much lag in KYC and AML review can lead to dropoff and, in turn, lost revenue. Account verification shouldn’t take a long time with microdeposits, credit checks, and bank statements. The automated nature of Open Banking Data retrieval means there’s less need for both manual input and checks. 

No longer are the days where fintechs and financial services businesses need to dedicate significant manpower and resources to simply receive and review customer information. Bank-grade information speeds up onboarding and puts customers on your platform faster.

Clean and Accurate Bank Data 

Let’s use an analogy to reflect the importance of clean and accurate data for onboarding. Receiving clean Open Banking data to streamline onboarding is like organizing a party with a detailed guest list, complete with accurate names, seating arrangements, etc. This allows you to host a great event. 

In contrast, not receiving clean data is like having an incomplete, disorganized guest list, leading to guesswork, potential conflicts, and an overall chaotic party, resulting in wasted time, effort, and probably a few guests you didn’t even invite!

Going off of this analogy, it’s clear that having better information, or in this case data, makes things easier and everyone benefits. Access to clean and accurate real-time data reduces the risk of errors and you spend less time fixing problems due to lack of reliable information. 

Bank-grade data is extremely trustworthy for AML and KYC checks. Banks already hold high standards to ensure that their data are up-to-date, precise, and reliable. This is because banks themselves already undergo intense scrutiny for AML and KYC compliance, so you don’t have to worry about sacrificing quality of data for speed. 

With Open Banking, you can leverage this accurate data to enhance your onboarding and make compliance with regulatory requirements that much easier and better. 

Get Started with Better Bank Data Today

Better bank data means better customer onboarding and increased conversion for your financial services platform. As the fintech landscape continues to innovate and evolve, you don’t have to rely on an outdated onboarding process to get your customers verified and ready to use your services. 

Instead, you can get customers onboarded faster while improving your regulatory compliance by harnessing the power of bank-grade data delivered via Open Banking. Trustly Connect, Insights, and ID can help fintechs across all verticals. Whether you’re in lending, wealth management, or investments, we can help you get started with better bank data today. For a free demo, please contact us.

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