Our financial services review reveals some of our top-performing CX secrets in 3 minutes.
Are you facing growing customer acquisition costs? Or worse, a high dropout rate during your customer registration process? Here are our top-performing secrets that helped FS across the world to improve their onboarding journey, increase their ROI on CX and decrease their customer acquisition cost CAC.
Some FinTechs can realise a higher ROI than others. The bigger the market share or, the higher annual revenue per customer/target segment, the higher the ROI (%) for the same CX transformation effort. However, size doesn't matter when it comes to the basics of great FS onboarding.
Challenge one: High dropouts during KYC. Understanding the challenges that non-STP customers go through is vital. Male ex-pats, for example, drop out at a proportionally higher rate than female cohorts. They also have difficulties navigating registration requirements and are less likely to return when facing generic POI and POA guidelines.
Here is what we did: No KYC during registrations! At the risk of losing your trust, please stick with us for a moment. Revolut (UK) did it, and it was a huge success (growing awareness, simplified onboarding and, customers get to know the product and the time to love it).
In 2015 Revolut introduced its prepaid card at TechCrunch (UK), handing hundreds of cards to tech-savvy early adopters. They asked potential customers to download the app and activate the card—simple! When asked about KYC, the answer was also simple.
“We will send you a message before you hit a transaction threshold (GBP 1.000). Only then we will ask you to go through KYC.”Revolut at TechCrunch Disrupt London2015
One of our clients, during that time, asked their customers to go through a lengthy process and it took between ten and fifteen days before customers received their card.
A delayed KYC approach lets customers test a product faster and in return, can reveal valuable data and reasons to improve even when they choose to leave. It is also possible to register customers without KYC and let them demo products first, without allowing any transactions. Once they're ready, and with the right messaging, a demo account can make KYC a joyful experience (+loyal customers with elevated customer lifetime value LTV).
Challenge two: Dropouts during marketing questions. Reasons to introduce marketing questions during registration could be anything from tracking affiliate programs to matching high-value customers with agents. These questions make sense when customers get an immediate and tailored service in return. That usually requires a certain level of automation and a great effort from the back office.
Here are the critical dropout factors we observed.
- Customers have to put extra effort into answering unrelated questions, causing unnecessary frustrations.
- It will also increase time to critical metrics: time-to-register and time-to-first-transaction.
- The accuracy of these answers is usually low.
When asked about how much they will transfer when opening a currency account, users found it hard to define a value because the transaction frequency varies from case to case. The data inaccuracies, in return, cause a chain of additional CX deficits, such as mismatching expectations and higher call centre costs.
Here is what we did: In return, we divorced the marketing questions altogether and moved them to the post KYC journey. We used 45 data values captured during the registration, in particular browser type, time to register and postcode to predict the LTV. Provided there is enough historical data available; a simple ML algorithm can predict LTV more accurately.
- We shortened the time-to-register.
- We sped up the time-to-first-transaction.
- We improved the agents' performance by matching them with high-value customers more accurately.
- And we drastically reduced the call centre costs.
Our best performing ROI secrets cover customer identification threshold, delayed marketing questions, ML to predict LTV and demo accounts. These didn't require significant tech effort and barely interfered with our clients' backlogs. And there is plenty more you can unlock with our low-tech and high-impact approach. Beyond our expertise in FS, today, we understand the importance of a setup that can help teams to collaborate more often, more organically.
One of the most challenging components is the alignment of security, product, operations, legal and marketing. We have seen organisations embrace collaborative ways of working, and others that took months for the very same transformation effort.
Local banks and smaller FS providers find it hard to spare time for redesigns and improvements, let alone innovation. They mostly rely on the capabilities of white label core banking solutions. That makes it even harder to offer a customised experience and requires an exceptional understanding of the white label offering. Our core banking experts have successfully implemented the most common white-label offerings.
At FLF, we continuously improve our frameworks to integrate innovation with BAU. We know what it takes to get it done and which pitfalls will make your onboarding redesign a costly journey. Talk to one of our FS onboarding specialists and find out how we can increase your ROI on CX while reducing your CAC.
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