Transforming Client Onboarding for Commercial Banks

Unveiling growth opportunities in the commercial segment

Global banking revenues are poised for a substantial uptick, which has been driven by growth in the commercial client base. In this landscape, the seamless experience of banking customers takes center stage, becoming instrumental in acquiring a more substantial market share in business, commercial and corporate banking.

The key to success lies in deepening the value of banking relationships, both through efficient onboarding and day-to-day servicing. Projections indicate that the commercial banking sector is anticipated to reach a staggering £3 trillion in revenue by 2026. This growth, boasting a CAGR of 6.4 percent from 2022, significantly outpaces the retail banking sector’s CAGR by 6.2 percent. Perhaps it’s no wonder that enhancing the client experience stands as a top priority for 83 percent of commercial banking executives.

1. However, the path to realizing these growth opportunities is not without its challenges. For 67 percent of banking clients, the hurdles of Know Your Customer (KYC) and onboarding processes loom large.
2. This presents the most significant barriers when a new client wants to initiate a relationship with a new bank provider.

As per industry surveys, more than half (54 percent) of commercial banking clients are currently scrutinizing their banking relationships. Additionally, streamlining client onboarding remains a challenge, with incumbent banks averaging anywhere between seven to 42 days to onboard small and medium-sized enterprises (SME) or business banking clients.

The stakes are high, with banks losing an annual revenue of £3.3 billion due to KYC and Anti-Money Laundering (AML) challenges that negatively impact the client experience. The road to harnessing these growth opportunities requires innovation and an unwavering commitment to delivering excellence in client service, both before and after a client becomes a bank’s customer.

Typical challenges faced by commercial clients during onboarding

The onboarding process for commercial clients often proves to be a labyrinth of manual processes and multiple touchpoints, resulting in high levels of dissatisfaction:

Below is an illustration of how most incumbent banks will onboard customers:

These hurdles present a pressing need for banks to revamp and modernize their onboarding processes to meet the expectations of commercial clients in the digital age.

From weeks to minutes: How fintechs are changing the speed and ease of onboarding

Fintechs are spearheading a transformative shift in the onboarding process, turning weeks into mere minutes. Traditional onboarding processing times have been heavily decreased to two to 48 hours (from downloading the app to first transaction).  

The magic behind this remarkable transformation is in tackling the problem with a four-pronged approach: digitizing customer journeys, reimagining colleague interventions (with objectives to achieve Straight-Through Processing (STP)), updating policies and modernizing legacy  systems. A combination of this approach leads to results with an astonishing 80-90 percent reduction of manual Full-Time Employee (FTE) effort for standard scenarios, ensuring a more efficient and pleasant onboarding experience.

How fintech onboarding is leading the charge

Client satisfaction remains at the core of fintech onboarding, with the Net Promoter Score consistently exceeding 70, showcasing the success of these innovative approaches. Further enhancing the appeal, fintechs boast an impressive 85-90 percent completion rate, spanning from initial registration to submission.

Fintechs also lead the charge in:

A vision for self-service and RM-led onboarding for commercial clients

North star E2E onboarding

This north-star vision is supported by a composable solution, which enables seamless digital customer onboarding, leveraging multiple systems:
 

Publicis Sapient has designed and built leading onboarding experiences for some of the world’s leading financial institutions and challengers to drive business growth leveraging best of breed partner ecosystem that enable seamless digital onboarding:
 

* Not an exhaustive list

Conclusion

The business and commercial onboarding process stands at the crossroads of immense opportunity and substantial challenge. As this article explored, the path to securing a larger market share in commercial banking hinges on the delivery of a seamless client experience.

It's time for a paradigm shift in commercial banking onboarding. Fintechs have paved the way with rapid, efficient and client-centric processes. Now it’s time for traditional banks to rise to the challenge and redefine their onboarding experiences.

As commercial banking executives prioritize enhancing client experiences—and clients themselves seek streamlined onboarding—it’s a pivotal moment to consider transformation. By embracing technology, automating processes and providing a holistic, digitally driven approach to onboarding, the onboarding experience can be revolutionized.

The future of commercial banking is here. Connect with us to explore how your institutions can embark on this transformative journey and ensure that you are not just part of the growth story—you’re leading it.