Detailed assessment data unveiled a significant hindrance in digital banking onboarding process and proposed a remedy for it
In a bid to enhance digital onboarding and customer acquisition, a super-regional bank embarked on a comprehensive digital transformation journey. The bank's Head of Client Engagement, John Rountree, spearheaded this initiative, recognizing the potential benefits of peer-based benchmarking analysis.
The benchmarking exercise provided granularity and evidence to support the case for process redesign, addressing potential pushback from within the organization. The analysis revealed that the bank's digital checking account application process abandonment rate was 60 out of 100 applications, which is 50% higher than peers. This stark contrast highlighted the need for improvement.
To justify the front-end marketing spending and the new resources required for process redesign, the strategists needed evidence to quantify the projected improvement in the volume of new accounts and higher average balances. The benchmarking analysis also revealed that the bank's approval rates of completed applications were running somewhat higher than peers, indicating that prospects who did not abandon the application were of high quality.
The fresh resource allocation for application redesign could be justified due to the quality of applicants and the ability to pinpoint the problem. The marketing blitz was effective in attracting prospects, but it introduced a potential barrier soon after, potentially causing consumer frustration. The problem was identified as a form design that made fulfilling KYC and credit-check questions too cumbersome and analog for many applicants who were already thinking digital-first.
Restructuring the application process was a significant project and required a new budget. However, using the benchmarking analysis, the team was able to build a solid business case to support the application redesign, resulting in substantially higher growth and profits than the cost of the project.
Peer-based benchmarking is a robust strategy tool that can confirm or refute assumptions and working hypotheses, enabling leaders to make smarter, fact-based decisions. By comparing their digital capabilities and outcomes against those of industry peers, banks gain actionable insights into where they stand in the digital maturity spectrum and what steps are needed to enhance performance.
Benchmarking allows banks to assess where they fall within recognized digital maturity models, such as Alkami’s Digital Sales & Service Maturity Model. This model categorizes banks into cohorts such as “Patiently Exploring,” “Innovation-Ready,” “Digital-Forward,” and “Data-First,” each with distinct digital capabilities and gaps. Understanding these distinctions enables banks to pinpoint specific areas—such as onboarding efficiency, security, or personalization—where improvements are most needed.
By benchmarking against peers, banks can determine which digital investments are yielding the highest returns for competitors. This encourages strategic allocation of resources toward technologies and processes that have shown effectiveness elsewhere, such as AI-powered tools that streamline onboarding or deliver personalized customer experiences. For example, integration of AI in onboarding can reduce friction, accelerate account opening, and improve customer satisfaction.
Benchmarking provides data-driven insights into best practices for customer acquisition. Banks observing peers with higher digital maturity often have more efficient, user-friendly onboarding processes and advanced marketing automation, leading to higher customer satisfaction and conversion rates. This knowledge helps banks refine their acquisition strategies by adopting proven digital tactics and aligning their value propositions with evolving customer expectations.
Regular benchmarking fosters a culture of continuous improvement. Banks that regularly assess their digital maturity against peers are more likely to adopt new technologies, integrate digital ecosystems, and operationalize digital capabilities across both customer and employee experiences. This ongoing evolution is essential for staying competitive as customer expectations for digital banking services continue to rise.
In conclusion, peer-based benchmarking is a cornerstone for banks aiming to optimize digital onboarding and customer acquisition, ensuring they remain agile and customer-centric in a rapidly evolving landscape. The super-regional bank's successful application of this strategy serves as a testament to its effectiveness in driving digital transformation and enhancing customer experiences.
By comparing their digital onboarding and customer acquisition processes with competitors, the super-regional bank unveiled inefficiencies that hindered growth. The analysis showed that the bank's digital checking account application process abandonment rate was 60 out of 100 applications, 50% higher than peers, necessitating process redesign.
To justify the funding required for this process redesign, the bank's strategists utilized peer-based benchmarking analysis to quantify the projected improvement in new accounts and higher average balances. The analysis also indicated that the bank's prospects who completed applications were of high quality, further strengthening the case for redesigning the cumbersome form design that was hindering digital-first applicants.
