WHITE PAPER

Seven Guiding Principles of

Digital Account Opening
Customers and prospects want to transact digitally. Millennials and
mobile savvy rich segment want great customer experience.
Application abandonment rates are high. It goes without saying that
Online Account Opening is no more just an alternative to branch
banking, but the preferred mode for your prospects today.

Banks have made strides towards making the account opening

process more web based and mobile based. However, that is not
enough. Banks need to move fast and make their account opening
process truly digital. We propose the seven guiding principles to
help you do that.
 Seven Guiding Principles of Digital Account Opening

Online Account Opening is hot,

as of yesterday!
There’s no doubt, as of today, that your customers want to
transact digitally. Your prospects want to open accounts
online, without hassles and without friction. Granted, that
there are still the traditional loyalists of branch-banking
that drive a lot of transactional banking revenue for
financial institutions (FIs). However, when it comes to
opening new accounts, the millennials and mobile savvy
class of financially rich can only be ignored at one’s own
peril. These classes of customers prefer online and digital
channels to apply for accounts and expect it to be rich on
customer experience.

If your institution is still toying with the idea of Online

Account Opening, unfortunately, it’s already late! Now, it is
time to go beyond Online Account Opening, and go truly
digital with your account opening process.

Is Online Account Opening strategy enough?

Online Account Opening, in essence is a term that primarily is an
opposite of branch based account opening, leveraging the web
and online channels including mobility. FIs have invested their
energies into converting the traditional applications and
processes to fit the web-based model of account opening. This
typically involved providing a web interface, making it available
to prospects directly in order to help them apply for accounts
online.
As an extended online strategy, banks have also created mobile
apps or ensured that the web application is responsive to
support various mobile interfaces and form factors.
But, is this sufficient?
What does it mean to make the Online Account Opening truly
digital? Is Digital just another glamorous nomenclature for a
better online account opening? Or is there more to it?
© Newgen Software, 2016 2 of 16

What’s happening
- Abandonment rates are
high, and continue to
increase.
- Marketing part of the
process is disjointed from
origination.
- Prospects switch to
another provider at the
first sign of trouble.
- Web and Mobile forms
continue to be the
emulation of paper forms.
- Visit to branch continues
to remain an important
element from a Bank’s
perspective, and a
deterrent for customers.
- Identity frauds and new-
account frauds continue to
be on the rise, mandating
banks to be cautious and
stricter on the other hand.
Seven Guiding Principles of Digital Account Opening
The stark reality of digital onslaught
Digital is making its presence felt in various ways for
Financial Institutions. Prospects and customers are
increasingly preferring the online and digital channels for
various transactions, just like they do in other parts of their
lives, such as shopping, dining or commuting.
Banks today need to address multitude of challenges
(some of which present themselves as opportunities) -
More people than ever are applying for various accounts
online, ranging from credit cards, to loans, to checking
accounts, to mortgage. According to a study conducted
by Javelin Strategy and Research, the volume of
applications on smartphones and tablets has jumped by
more than 60% for auto loans, mortgages and credit cards.
The preference for digital channels is consistently on the
rise, with 70% of checking account opening applicants
indicating preference for digital channels for account
opening applications.
Brand loyalty is phasing out. Given a choice, customers
would switch to another provider in a snap. While
customers would give first preference the existing banking
service provider for their other needs on account of
convenience, if they face even a minor obstacle in the
process of opening an account, the other options come to
the fore pretty quickly in this increasingly digital world.
Competition is coming in from unrelated quarters. What is
being seen in the world of payments, with alternate digital
sources of payments eating into the banking business, is
only the beginning. Many services in the areas of loan,
mortgage, credit and checking are being made available
by the digital technology players. Millennials do not really
care where they get the service from, as long as they get
good service.
Banks also face myriad factors including the myths and
misconceptions surrounding online account opening.
© Newgen Software, 2016 3 of 16
 The Five Myths of Online Account
Seven Guiding Opening
Principles of Digital Account Opening

Myth - Digital Account Opening is a prerogative of larger banks

No. There’s no direct correlation between the size of the bank and the number of online
applications. In fact, it’s rather imperative for banks with rather limited reach to establish a
great online account opening experience, and hence, to go digital.

Myth: Web interface = online account opening

It cannot get more misplaced that this. Web interface initially
was a starting point for banks to move from branch banking to
online mode of operations. Requirements today are much
more than a web and mobile interface.

Myth: Mobile First = Mobile App

A Mobile App is an engagement strategy. However,
in order to get people to use mobile first, banks have
to make the experience seamless. Also, a mobile app
is irrelevant for non-customers, rather an overhead.

Myth: Mobile
and Social
replace human
interaction
No. Mobile and social
need to enhance
human interaction,
and not replace it for
cost saving purposes.

Myth: Digitization of paperwork =

Digital account opening
No. Digital doesn’t mean translating paper
based processes into a “digitized” process. It
could be starting point, but account opening
needs to be truly digital, leveraging process
© Newgen Software, 2016technology with mobility and4imaging.
of 16
 Seven Guiding Principles of Digital Account Opening

Driving Factors for Digital

Account Opening
Online Account Opening may seem like a relatively simple
process. However, multitude of factors drive it -

Revenue Growth. The key driver for FIs undertaking online

account opening has to be revenue and new customer
acquisition. Even though it sounds obvious when stated,
most banks have initially adopted online mechanisms as a
way to reduce the account opening costs, and to reduce
the overall manpower needs at branches. This mentality
stems from the traditional branch-centric banking, and
unfortunately still carries forward in the way banks
approach online account opening. Most account opening
initiatives at banks look like an extension of manual and
branch-centric processes.

Customer Experience. Today, your customers and

prospects do not look for a transactional approach.
Accomplishing a transaction is a given. What they need is a
great customer experience. They expect you as a Bank to
deliver the same experience that they get in other aspects
of their lives. This requires more than KYC (Know Your
Customers), CIP (Customer Identification Program), and
the single face to customer. A great customer experience
needs to address the prospects and customers in their
own context and be preemptive and proactive in
engagement.

Omni-channel. A lot of organizations today look at social

and mobility as a vehicle to improve their reach and as a
tool for customer experience. While that is true if done
well, it is often not about technology but how these
channels are integrated in the process. Ability to
seamlessly apply for accounts through any of the channels
available is important. However, prospects expect you to
consider what works best in which channel, be in mobile,
web based, social, SMS or email, and do that.

© Newgen Software, 2016 5 of 16

 Seven Guiding Principles of Digital Account Opening

Bank’s Role - From Utility

Provider to Lifestyle Enabler
It’s easy to look at a bank’s role as a
transactional value provider for increasingly
commoditized offerings such as Credit
Cards, Loans, and Checking Accounts
services. However, Banks can change the
way they look at prospects trying to open
an account by really understanding their
motivations behind the same. While banks
understand how their services affect the
lifestyles of customers, they still do not look
at Online Account Opening as the very
“first” experience that a prospect has with
them.

Cross-Channel. One of the biggest obstacles to a great

online account opening experience is the broken process
leading to abandonment. A prospect should be able to
show the interest through social, initiate account
application through mobile, capture details with phone
camera, complete the application on web if convenient,
and go back to mobile if needed. An ability to save and
resume in a cross-channel fashion is an implicit
requirement for a digital account opening process.

Unified Platform. You need to break the silos and create

processes that cut across departments, functions and
systems seamlessly and also carry the transactional and
customer context. It’s not enough to provide a mobile
interface in form of an app. It is important to leverage
information available in other parts of the organization in
order to serve the customer better. Bankers need to look
for connecting people, processes, systems and things in
their ecosystem to deliver customer-centric, agile and
responsive organization.

© Newgen Software, 2016 6 of 16

 Seven Guiding Principles of Digital Account Opening

Contextual Engagement. It’s easy to justify treatment of

account applications as just transactions, because there
are supposed to be just so many of them. However, from a
customer standpoint, it is important for the bank to
remember the context of the customer at every interaction
and at every step. This is how the overall experience for the
customer gets built, through additional context getting
added in every step.

Fraud Prevention. While digital is taking over the account

opening landscape, at the same time the frauds are
surging in the new-accounts and fraudulent account
opening activities. Data breaches have also been a source
of worry because these directly enable a fraudulent activity
with access to private and sensitive information belonging
to individuals. Information Security is an important element
in digital account opening.

Customer Experience v/s Fraud Prevention

On the face of it, many potential practices that could provide a great customer experience are
orthogonal to prevention of a potential fraud. Financial products and services are directly prone to
well-planned fraud schemes and tactics. In digital world, it’s relatively easier to impersonate and
fake identities. All the efforts towards KYC, CIP, and UDAAP are focused toward legitimacy and
establishing fair business grounds. Still, instead of drawing a cautious long-drawn process in order
to block wrong people, banks need to leverage the help available in technological solutions to
improve the customer identification, verification and regulatory compliance, which involves
integration with third party verification agencies, including telco providers, and establishing
tighter and efficient processes that carry the documents and customer context throughout.

© Newgen Software, 2016 7 of 16

 Seven Guiding Principles of Digital Account Opening

Regulatory Compliance. Account opening process

involves multiple requirements stemming from information
security as well as regulatory requirements, such as
Customer Information Program (CIP), Identify Verification,
and Customer Due Diligence. Banks need to ensure they
comply with Dodd-Frank Act, and also leverage the
provisions available to them under E-Sign Act.

Process Optimization. Banks need to look at the areas that

need to be optimized for taking in more applications,
ensuring low abandonment rates, and increase the rates of
overall completion of account opening applications. That’s
not enough still, the process has to address the gaps and
silos and ensure that the overall customer experience is
seamless from leaden to account activation to funding.

Cross-sell. Digital enables mechanisms to up-sell and

cross-sell that were earlier difficult to execute. Your existing
customers expect that they are provided offers based on
context already available with you. In order to do that, and
ensure that your communication with the customers is
contextually correct, you need to integrate technological
solutions and also have processes that allow that.

Imperatives of Digital Business

© Newgen Software, 2016 8 of 16

 Seven Guiding Principles of Digital Account Opening

Digital Account Opening: Guiding Principle #1

Provide Omni-channel and Cross-channel

Experience

1
A true omni-channel experience requires that
you seamlessly integrate the experience
across various channels - social, mobile, web,
or even at the branch. All the interactions,
starting from lead response, until the time
when the funds are deposited, the account
opening process has to act as a single unified
experience across channels.

This cannot be done only through a mobile

interface to an existing process. The process
has to take care of the following in order for
this to happen -

- A consistent workflow driven process that

doesn’t get dropped in-flight

- Ability to support the same workflow step

through any channel - mobile, web or even
with an assisted digital channel

- Save and Resume capability for the

prospects to continue from where they left
off in the previous session

- A natively integrated mobility based

framework that drives the interactions along
with the workflow.

© Newgen Software, 2016 9 of 16

 Seven Guiding Principles of Digital Account Opening

Digital Account Opening: Guiding Principle #2

Leverage Mobile Imaging to Speed up On-

boarding Process

2
Expecting prospects to fill out page long
forms leads to bad customer experience.
While social integration is one way to enable
fast form filling, the customer identification
program also requires that the information is
verified against a state-issued identification
collateral. An image capture of a driving
license for example, with an OCR enabled
auto field capture helps reduce the friction in
account opening process. However, this
needs to be supported by the right
technology that -

- combines intelligent mobile capture

features with advanced image processing
and automated extraction capabilities to
transform operations.

- enables real-time information transfer to

back office by seamlessly integrating with
backend enterprise applications

- creates several layers of encryption to

ensure adequate levels of security while
dealing with sensitive information

- supports compression to enable transfer of

supporting documents over low bandwidth
networks
© Newgen Software, 2016 10 of 16
 Seven Guiding Principles of Digital Account Opening

Digital Account Opening: Guiding Principle #3

Treat Online Account Opening Like a Sign-up

Activity

3
One of the mistakes banks make when they
design their online account opening process
is that they take the same manual and branch
based process to the web and digital
channels. This results into heavy form based
approach to which the other digital amenities
are appended. If you look at what makes most
successful digital businesses so, it is that the
sign-up process is given the due importance
that it deserves.

Here are few things banks should do as well

for a smooth sign up process, to act digital -

- Allow for Single-click sign-up with minimal

information, such as email and name. This
also acts like a lead capture in case the user
decides to pause and come back later.

- Replace the long forms with step by step

page flow. At appropriate places, auto-fill
information with image capture.

- Allow for save, pause and resume to let the

prospects have a breather and not having to
repeat the whole process again.

© Newgen Software, 2016 11 of 16

 Seven Guiding Principles of Digital Account Opening

Digital Account Opening: Guiding Principle #4

Address End-to-end Lifecycle from Leadgen to

Account Activation to Funding

4
Online Account Opening is not a single
transaction. Even though it needs to be
completed within few minutes for an ideal
customer experience, it is still a process with
lot of straight-through processing
opportunities. And, it should be treated as
one.

A process approach means that it needs to be

supported by the right technologies that
allow for

- orchestration at the process level, with ability

to model and design the process the way
expected

- integration with the other backend and

external applications for background
verifications, cross-sell offers, identity
management, document management and
funding

- A robust rules management and exception

handling system in order to service varying
contexts and to make speedy decisions

- A workflow engine with ability to provide

multiple interfaces for the various steps in
the process to enable cross-channel

© Newgen Software, 2016 12 of 16

 Seven Guiding Principles of Digital Account Opening

Digital Account Opening: Guiding Principle #5

Contextualize Customer Touchpoints and

Customer Engagement

5
Customers and prospects like being
remembered. And, they hate being forgotten.
If they already hold an account with your
organization in any of the businesses, it helps
to pre-fill the information, and to help them
along with the right decision based on the
context.

Not only that, any documents linked with the

existing accounts should be brought forward
in the newly created context. Once the
context has been created, including the
customer information and the relevant
documents (identification proofs, signature
specimen and so on), then the system should
continue to hold them and make them
available through out the process. You need
to -

- integrate mobility with a content

management platform

- drive transaction content through the

process with integrated document
management

- allow for updates, archival, replacements of

any linked content and renew context

© Newgen Software, 2016 13 of 16

 Seven Guiding Principles of Digital Account Opening

Digital Account Opening: Guiding Principle #6

Measure What Matters to Your Customers, and

Improve it, and Keep Improving it

6
A great customer experience is intangible. Yet,
there are ways to measure what matters to the
customers. Time and again, banks measure
the overall cycle time, the effort, and try to
gather feedback. While useful, these are not
the right indicators. Banks need process
monitoring mechanism backed by strong
workflow, and also ways to measure -

- Number of applications initiated. there

should be a way to establish a process start
point and measure it.

- Number of abandoned applications, which

can be identified to the prospects.

- The bottleneck steps. The steps that are

most commonly the place of abandonment
need to be extensively analyzed with activity
monitoring (BAM).

- The rate of resumption. The applications that

are resumed, sliced by steps of
abandonment.

- The number of times the exceptions kicked

in, and how they were handled, so that
patterns could be converted to automated
rules.

© Newgen Software, 2016 14 of 16

 Seven Guiding Principles of Digital Account Opening

Digital Account Opening: Guiding Principle #7

Unify Product Offerings and Provide Seamless

Experience Across Products

7
A true digital experience is when an existing
customer is offered the most relevant needs in
form of cross-sell, without interrupting them,
and then to follow through the account
opening process without making it seem like
it’s a different process from what they are
used to.

This cannot be achieved without an unified

underlying process driven platform that helps
you to provide a uniform technological
capability for similar customer experience
across the stack.

The capabilities you need are -

- A process orchestration platform with ability

to model, implement, execute, monitor,
change and optimize workflows

- An integrated content management

platform to provide the seamless context

- Mobility framework with native imaging and

image processing capability with underlying
seamless integration with processes and
systems

© Newgen Software, 2016 15 of 16

 Seven Guiding Principles of Digital Account Opening

What can you do, today?

- Assess your current account opening process. What drives your
customers away today?
- Identify how you are addressing the seven guiding principles of
Digital Account Opening.
- Identify key differentiators for your organization and how a
flexible process platform with mobility framework would help in
longer term.
- If you think we can be of any help, contact us!

About Newgen
Newgen Software is a leading global provider of Business Process Management (BPM), Enterprise Content Management
(ECM), Customer Communication Management (CCM) and Case Management, with a global footprint of 1300+
installations in more than 61 countries with large, mission-critical solutions deployed at the world's leading Banks,
Insurance firms, BPO's, Healthcare Organizations, Government, Telecom Companies & Shared Service Centers.

Newgen's Quality Systems are certified against ISO 9001:2008 and Information Security Standard, ISO 27001:2013.
Newgen has been assessed at CMMi Level3.

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