Digital account opening should be a gateway to better customer experiences and operational efficiency. But according to Bain & Co., nearly half (48%) of consumers abandon the account opening process when they encounter digital friction. Account abandonment not only results in a direct loss of potential customers, an increased customer acquisition cost (CAC) but also missed cross-selling opportunities.
At Vikar, we help financial institutions overcome these challenges with a platform designed to handle complexity with built-in compliance and bank-directed omnichannel support, without sacrificing usability, speed, or control.
Here are the five most common mistakes we see and how financial institutions can avoid them:
1. The Core Problem: One-Size-Fits-All Approach Fails
Many financial institutions build their digital account opening (DAO) systems with a basic, personal checking or savings account in mind. This often involves a straightforward application flow, minimal document requirements, and simple identity verification. While this might work for a large percentage of individual retail customers, it completely falls apart for complex scenarios.
So what exactly is a complex business account, and what makes it so hard to open? They require increased regulatory scrutiny, manual reviews of complex documentation, and specialized workflows and expertise. This results in long onboarding times. Here’s what constitutes complex accounts and what makes them difficult:
- Entities with Layered Ownership Structures: Businesses owned by other companies, trusts, or offshore entities, often involving multiple tiers of ownership. Each of these individuals needs to be identified, verified (KYC), and their authority documented. This includes ultimate beneficial owners (UBOs) who may not be direct signatories.
- Industry-Specific Needs: Certain industries (e.g., cannabis, crypto, non-profits) have unique regulatory requirements or higher risk profiles, demanding additional scrutiny and documentation.
- Foreign Entities or Non-U.S. Persons: Accounts for companies or individuals based outside the U.S., or with foreign beneficial owners, often raise AML/KYC compliance complexity. Requires OFAC screening, jurisdiction checks, and additional documentation.
- Trusts and Estates: Accounts set up for living trusts, irrevocable trusts, or estates of deceased individuals. Involves: Legal documents, trustee powers, and identity verification of multiple parties.
- Special Purpose Vehicles (SPVs) and Funds: Entities created for a single investment or transaction, often used in real estate, venture capital, or private equity. The challenge is often no operating history, complex capitalization, and unclear UBOs.
- Nonprofits and Associations: Charities, religious organizations, HOAs, or clubs can be tricky due to varied governance models and signatory authority and often require board resolutions, charters, and 501(c)(3) documentation.
- Politically Exposed Persons (PEPs): Accounts linked to current or former government officials or their families, which carry a higher corruption risk. PEPs trigger enhanced due diligence (EDD) and require ongoing monitoring.
Plan for complex scenarios by using a purpose-built solution to handle complexity without requiring workarounds or re-entry.
2. Letting Compliance Stay Fragmented
In many institutions, compliance processes like KYC, KYB, AML screening, and document verification are handled across disconnected systems and manual workflows. This fragmentation, caused by teams working in silos, results in slow onboarding, introduces risk, and creates blind spots that make it hard to ensure a consistent, auditable process.
Avoid this by choosing a platform with integrated KYC, KYB, and real-time risk rating baked into every account opening workflow.
3. Ignoring the Bank-Directed Channel
Many digital onboarding platforms are built solely around self-service workflows. That might work for straightforward retail accounts, but it falls short for the complex, relationship-driven needs of business banking and high-value customers. These clients often expect a bank-directed experience—guided by relationship managers or onboarding teams—because their needs go beyond what a standard digital form can handle. For example:
- Layered Account Needs: Businesses might need a suite of products, including checking, savings, lines of credit, merchant services, and treasury management, all linked under one business entity.
- Investment Partnerships/Funds: These can have incredibly intricate structures with general partners, limited partners, and complex legal agreements.
- Multi-Account Openings from a Single Application: Customers want to open several accounts at once. A bank-led experience makes it easier to guide them through a bundled application.
- Bundled Products: A customer might want to open a checking account, a savings account, and apply for a credit card all at once. If the system forces them through three separate applications, it's frustrating and prone to abandonment.
- Joint Accounts: Opening a joint account requires information and verification for both individuals, and the system needs to accommodate this seamlessly
Plan for Bank-Directed Experiences by embracing a hybrid approach that includes a Bank-directed option allowing financial institutions to cater to diverse customer preferences, handle account complexity effectively, and build stronger relationships, rather than alienating customers with a rigid, self-service-only mindset.
4. Disconnected Systems
When account opening requires jumping between systems for identity verification, document collection, approvals, and compliance checks, things fall through the cracks. Alexandros Argyrious, CEO at Fintech Insights, explains that redundant steps, excessive manual input, poor navigation, and weak UI designs are the main culprits complicating digital banking enrollment.
To overcome this, banks need to move towards a unified, end-to-end digital account opening platform that:
- Integrates Key Functions: Identity verification, document collection, risk scoring, compliance checks, and approval workflows are all part of a single, orchestrated system.
- Centralizes Data: All customer data, documents, and decision logs are stored in a central repository, providing a "single source of truth."
- Automates Workflows: Rules-based automation guides the application through each stage, reducing manual handoffs and ensuring consistency.
- Provides Real-time Visibility: Dashboards and reporting tools offer real-time insights into the status of applications and the efficiency of the process.
- Ensures Auditability: Every action, decision, and data point is logged, creating a comprehensive and easily accessible audit trail for compliance purposes.
- Leverages APIs for External Connections: Instead of disjointed "jumps," the platform uses robust APIs to seamlessly connect with external data sources (e.g., credit bureaus, government registries) for automated checks.
Avoid this by consolidating account opening into a single unified platform. By eliminating system jumps, banks can dramatically improve efficiency, reduce errors, enhance the customer experience, and significantly strengthen their compliance posture.
5. Overlooking Internal User Experiences
For many banks and credit unions, strategic growth hinges on delivering better experiences, both internally and externally. Overlooking internal user experiences is a common pitfall in digital transformation. Many organizations focus solely on the customer-facing aspects, neglecting how their own teams interact with new systems. If employees are bogged down by clunky interfaces, manual workarounds, or unclear processes, the benefits of modernization are severely limited. This internal friction leads to inefficiency, errors, and frustrated staff, ultimately hindering the ability to deliver seamless customer service. Modernization must empower both customers and the teams serving them.
Avoid this by choosing a platform designed with every user in mind—from branch staff to compliance officers. Look for an intuitive interface, making it easy to manage even the most complex workflows with confidence and clarity.
Vikar’s Approach to Digital Account Opening Software
Vikar takes a fundamentally different approach to digital account opening: one that’s built for the real-world complexity banks and credit unions face every day. Instead of forcing every customer through a rigid self-service flow, Vikar supports both digital and banker-led onboarding in a single, unified platform. Whether it’s a simple account or a multi-entity commercial relationship with layered ownership, Vikar adapts the experience in real time based on the customer profile, risk level, and product mix. From dynamic forms and automated document collection to built-in compliance checks, every step is designed to reduce friction without compromising control.
This approach directly addresses the five most common mistakes we see in the industry. Vikar is built to handle complex business structures out of the box—no workarounds or custom development needed. Instead of fragmented compliance tools, Vikar embeds KYC, KYB, AML, and risk controls directly into the process. Vikar integrates seamlessly with core systems to break down silos and focuses just as much on the internal user experience as the customer’s. The result? Faster onboarding, lower risk, and a process that actually works for the people running it.
To learn more about Vikar solutions, visit vikartech.com or email: contact@vikartech.com