How Retail Banks Can Fix the On-Boarding Customer Experience

girl on laptop, retail banks
Retail banking in the UK continues to suffer from a bad reputation. I know that’s stating the blindingly obvious and has been for quite some time, but a recent report has illustrated how stark the situation still is.

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According to a 2015 survey of 10,000 current account holders by price comparison site uSwitch, some of Britain’s biggest lenders have the lowest levels of customer satisfaction. The poll was topped by the Royal Bank of Scotland (RBS), with customers voting it the worst current account provider for a second year in a row. Other big banks that saw a drop in their ratings included Barclays, HSBC and Lloyds Banking Group.

This lack of satisfaction is reflected in a further key statistic – at least 40 per cent of banking applications being abandoned before to completion.

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So why are banks still failing to deliver the standard of service customers expect?

I believe part of the reason lies in the ways in which banks handle customer account opening as well as later servicing. Some banks struggle to complete current account or loan applications in a timely manner. And even when banks that have ‘in principle’ accepted applications the process can be laborious as they insist on over vigorous checking.

Before looking at what banks can do to improve customer on-boarding, it is worth examining how we have arrived at this situation.

No single view of the customer

There are two principle reasons why consumers are not happy with the service they receive from banks. First of all, most banks do not store information about customers as single entities within their data repositories. Normally, this information is fragmented across multiple systems, product records and business units. Think about how many times you’ve had to repeat basic information when dealing with different departments within your bank.

Secondly, increased regulation has affected how banks manage and use their customer data. Banks are conflicted – they don’t know what customer data they are allowed to keep nor do they have any clear strategy on what they can do with it to improve their services.

The General Data Protection Regulation (GDPR) will have a direct impact on how banks handle the on-boarding of clients and manage their data. This new regulation which is due to come in to force in 25 May 2018 will ensure banks are only storing the data they need to give customers control over their personal data when requested in an open and transportable format. In a recent article on the impact of GDPR, Ugo Okonkwo summed up the outline beautifully:


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So whilst the banks will have to improve how they use and store data to validate a customer’s identity and suitability for a product, there is an opportunity to rethink how and more importantly why they should store personal customer data.

Customer Verification: A new approach?

It’s quite clear that banks need to take a fundamentally different approach to the way in which they store and leverage customer data. Banks have a tendency to silo customer data across different product sets, which makes it difficult to achieve a customer-centric model.

So how can banks effectively address these challenges and improve their on-boarding processes? One idea that is being floated is to create a central source of customers’ bank details that could be updated and validated externally. Of course, this would require unprecedented cooperation between the banks, but there is already a precedent in place.

The Legal Entity Identifier which directs businesses to detail the identities of all those within the organisation who are involved in a financial transaction. Whilst it has its flaws, namely in how accurate and timely that information is, the concept of a centralised identity database could work for retail banking.

At present, each bank has to bear the weight of managing its own compliance. I think there is a good argument for this function to be outsourced to third parties that have the right in-house expertise. In fact, this point was made persuasively by Jon Gudelis in an article he recently published.

In the UK, the government has recently launched the Gov.uk Verify ID platform. The system is intended to provide a single trusted login across all Government digital services, verifying the user’s identity in 15 minutes. There are certainly features of the platform that banks could replicate as a means to validating customer identities online. In fact, I would argue that it makes sense for the UK government to open up the system so that it could become a central identity platform online.

Actually, I would go further than Jon and suggest that banks should consider outsourcing the collection and maintenance of customer ID verification to a third party, similar to Verify ID. Naturally, there would be security issues that would arise out of making such a decision, but they would not be insurmountable. In fact, this policy was recommended by the PwC Retailing Banking in 2020 report and is a tangible way in which the banks could improve their regulation and customer service.

What’s your view?

There are significant barriers to banks improving their customer on-boarding experiences. At the same time there are viable solutions. It is now down to the industry to grasp the opportunity to rethink their approach to customer data.

I’d be very interested to hear your views. 

Glynn Roberts

Author: Glynn Roberts

Glynn Roberts is Transformation Architect for Financial Services in the UK and Ireland at HPE. Glynn has been working in the retail banking area, and associated disciplines, for over 30 years. His role today involves working with banks and building societies, including start-up and challenger banks, to determine from their business transformation strategies the operational and technological changes they need to make and how to make them.