Why Digital Transformation is Essential for Account Opening

In the ever-changing banking industry, where customer loyalty is paramount and competition is fierce, banks are constantly seeking ways to optimize their operations and deliver exceptional customer experiences. Client Lifecycle Management (CLM) encompasses complex customer relationships from the initial engagement to the ongoing balance of keeping a customer loyal. Traditional CLM methods often struggle to keep pace with the dynamic needs of today's digitally savvy customers and the ever-increasing regulatory landscape. Enter digital transformation.

Digital transformation plays a crucial role in modernizing account opening as an innovative way to revolutionize the method banks approach CLM. The transformation unlocks valuable potential for personalized engagement, streamlines processes, and enhances risk management. But the question remains: why is it important, and what are the risks of ignoring digital transformation?

Before we explore the risks and benefits of a digital transformation, we first need to define what components are included in a digital transformation:

 1) the customer experience, 2) automation, and (3) artificial intelligence (AI). 

1. The Customer Digital Experience - Why Is It Important?

From opening an account to securing a loan, a smooth, efficient, and personalized digital experience fosters trust and loyalty. Customers with a positive experience are more likely to recommend the bank to others, use more products and services, and remain loyal for the long term. Conversely, a negative experience can damage a bank's reputation and lead customers to switch to competitors. By prioritizing a seamless and positive customer digital experience, banks can win over new customers, and retain existing ones, ultimately driving growth.

Here are some specific ways that a positive customer digital experience benefits banks:

• Increased customer satisfaction and loyalty: When customers have a positive experience opening an account online, they are more likely to be satisfied with the bank overall and remain loyal customers.
• Reduced account abandonment rates: A streamlined and efficient digital account opening process can help to reduce the number of customers who abandon the process before completion.
• Improved brand reputation: A positive digital experience can help to improve a bank's brand reputation and attract new customers.
• Increased sales and cross-selling opportunities: A positive digital experience increases the bank's likelihood of selling additional products and services to customers.

2. How Does Automation Help Improve Employee Performance?

Automation can be used in multiple touchpoints within the account opening process to improve the employee’s digital experience and performance. Here are some of the specific benefits:

• Automating Mundane Tasks: Repetitive tasks like document processing, KYC (Know Your Customer) checks, and re-keying of information across business lines are handled by automation, freeing staff for strategic activities like building relationships and providing personalized financial advice.
• Efficiency Boost: Automation reduces errors and streamlines processes, increasing efficiency and saving operational costs. These savings can be reinvested in other areas to improve the customer experience, such as developing new digital tools and features.
• Compliance Champion: Automation takes the burden off navigating complex regulations. Automated compliance checks ensure adherence, freeing up staff for more strategic tasks and reducing the risk of errors that could lead to fines or penalties.

Another benefit of digital transformation is that the employee can ensure complete and accurate data, which is critical for a successful AI implementation.  In other words, a digital transformation prepares the bank to maximize the benefits of AI.

3. How Does AI Help Improve the Customer Digital Experience?

AI can be used in many ways to improve the customer digital experience, including:

• Personalized product recommendations: AI can be used to analyze customer data and recommend products and services that are tailored to their individual needs.
• Chatbots and virtual assistants: AI-powered chatbots and virtual assistants can provide customers with 24/7 support and answer their questions in real-time.
• Fraud prevention: AI can detect and prevent fraudulent activity, helping protect customers' financial information.

The Importance of a Digital Transformation Strategy

To achieve these benefits, banks need to develop a comprehensive digital transformation strategy. This strategy should include a focus on the following:

• Customer needs: The first step in any digital transformation strategy should be to identify the needs of the bank's customers. What are their pain points with the current account opening process? What are their expectations for a digital experience?
• Employee Experience: While customer needs come first, improving employee experience comes with a wealth of benefits that result in increased efficiencies and employee performance.
• Technology stack: Banks must invest in the right technology, end-to-end digital workflows, and not just automation in silos and stop chasing the “shiny new toy”. 
• Change management: Digital transformation is not just about technology; it's also about people. Banks need to have a plan for how they will manage change within the organization. This includes training employees on new technologies and processes and helping them to adapt to a new way of working.

The Future is Automated

The future of banking is undeniably linked to digital automation. By embracing its potential and navigating the challenges, banks can transform CLM, build stronger relationships with customers, create a competitive edge, and become more efficient and profitable. 

Vikar is revolutionizing the way banks do business today. We are the only company providing software in which customers, lenders, branch managers, underwriters, KYC, and operation teams collaborate from a common interface across loans, deposits, treasury, and wealth management. Vikar offers One Vikar, a modern solution with built-in rules and automation supporting today’s demands from both bank customers and employees. The One Vikar solution is built with a holistic view of a bank’s business and completely integrates into the core banking system. 

Our solution is highly scalable and easily configurable into any core backend and data systems using open API’s and 3rd party integrations to non-Vikar modules. Vikar is a proud member of the Jack Henry™ Vendor Integration Program. Vikar is also a member of the Pennsylvania Bankers Association Select Vendor program.

For more information about this article or to learn more about Vikar products and services please contact Nancy Schneier at nancy@vikartech.com.