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BirdsEye View

 Let’s face it – our account opening process, especially in the branches, is clunky at best.  It takes a very long time (between 30-45 minutes), is generally guided by compliance needs, and creates little value-add for the customer.

I’ll be the first person to acknowledge the critical importance of compliance in our daily operations.  It is an essential element in retaining our license to operate.  At the same time, our process typically is built on a very old chassis to which we continued to add elements as compliance requirements, especially BSA and KYC, increased.

The account opening process has not been reengineered in most banks, largely for fear of regulatory retaliation and partly due to system limitations.  I suggest it is time to reevaluate the process and ask ourselves whether each and every data point and step are necessary to meet regulatory requirements while executing a positive customer experience.

I’m a huge believer of getting ahead of regulatory requirements and regulatory ire.  I’m not so clear, though, why the current account opening process of so cumbersome, even though most blame it on the regulatory environment.  It seems to me that the duration of the account opening process has always been long, and while regulatory requirements are a contributor to the issue, they might not be the driver.  It is time to take a zero-based approach to the subject and optimize the process from a clean slate.  Making minor adjustments to a broken process is unlikely to be the answer, as we have found to be too true on the loan production (manufacturing) side.

How about the online and mobile account opening process?  In most banks that do offer that service, it is far shorter and simpler than the in-person version, yet it is in full compliance.

A great example of the process is Zenbanx, a SoFi company.  The bank’s mission is to transfer funds across borders, especially to China and India.  This is a BSA nightmare.  And yet, it takes less than 10 minutes to open the account through the phone. 

You start by inputting some rudimentary information.  You follow by facing the phone and blinking numerous times until your facial features are effectively recorded in the bank’s database.  You then put your driver’s license in front of the phone, and it records both sides, matching your features to the license picture.  Your authentication is now done, using a government-issued ID.

The process is smooth, simple and compliant.  Why can’t we do this at the branch and in-person?  I have asked several compliance officers but can’t find an answer.

Our first challenge is to make the in-person experience better and faster.  Account opening is our first introduction to a new customer.  The more painful it is, the less likely the customer is to buy more products from us or recommend us to a friend or colleague.  In addition, we are driving prospects to automated, more convenient channels, which, theoretically, do not yield as strong a relationship as the personal touch so many community banks boast is their competitive advantage.

In reality, it appears that the cross-sell for online and mobile account opening sessions is higher on average than that of the in-person session.  It is not surprising, considering that the banker consumes the customers’ entire time with administrivia instead of consultation.   I reiterate:  I understand why, but is that a good enough reason not to change?