Vincent Bezemer, SVP Americas at Backbase took the time to share a few highlights from Backbase’s latest research on how FIs need to improve their customer onboarding processes while sharing a few thoughts on the biggest trends their team is observing in the B2B fintech market:
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Vincent, welcome to this chat! Can you take us through Backbase is new research on the need for financial institutions and banks to focus on improving their digital sales and onboarding process – the key highlights?
We worked with Ron Shevlin at Cornerstone Advisors to get a better understanding of how financial institutions are doing in terms of implementing digital onboarding capabilities for both deposit account opening and unsecured and secured lending products. The results have proven incredibly interesting:
For starters, the percentage of financial institutions demonstrating the highest levels of digital sales maturity is still very low – which is surprising, considering onboarding/origination has been in the top three key digital initiatives for the past five years. According to the data, only 25% of institutions Cornerstone surveyed achieved the highest maturity benchmark for deposit account openings, while only 13% had done so for unsecured loan products and 3% for secured.Unsurprisingly, then, the FIs that had achieved high levels of digital sales sophistication outperformed the market in many areas, including deposit and loan growth, as well as online account applications.
Smaller FIs are not always technically behind bigger players on this front, however. They can compete, but it’s their focus that lags – can you originate multiple products at the same time? Can a customer/member customize a product? The market leaders excel because they take a holistic look at marketing, speed and integrations, seeing the full picture of what their customers and prospects need and expect(Backbase).
There is a lot of work to be done, and our business consultancy team can help with the “how” and the justification.
Can you throw focus on a few top trends that banks and FIs should be focusing on through 2021 and beyond, in terms of the capabilities they should be digitizing better to meet future customer needs?
The number one trend I’ve observed is that mature (in this context) FIs are taking a roadmap approach to digitization, meaning all onboarding, origination and self-services are integrated into a single platform. They also ask themselves – repeatedly – the right questions, which in and of themselves point to trends in client expectations:
-Can we originate multiple products in one account opening process?
-Do we understand if and where there is friction in our onboarding process?
-Do we understand the need before a process starts (dwell time), and does that lead to product personalization options?
Can you share some thoughts on some of the best digital sales processes in place by leading global banks and what key takeaways can come from there?
The best digital sales processes are characterized by three things:
1. An ongoing – that is, agile – improvement process
2. The option for a straight-through, fully digital processing
3. An omni-channel experience that ensures consistent, smooth service, whether a customer is switching between mobile and web interfaces, or between online interfaces and the branch/call center.
What are some of the biggest challenges that digital account opening capabilities and processes of today don’t solve yet for customers, especially given today’s need for a better remote process – what are some of the top technologies you feel should be adopted more to drive impact here?
The biggest challenge is that onboarding/origination always has been solved by levering different vendor solutions, such as one vendor for account opening, another for credit cards, another for mortgages, and so on. The solution to this challenge considers the benefits of bringing all those functionalities under a single platform, from simplified vendor management, to simplified architecture and tech maintenance, to access to specialized skill sets and change management expertise. From there, you can also originate more products in a single session and upsell content better. You can also apply BI, data analytics, AI and other advanced technologies more centrally and effectively.
As payments and B2B SaaS solutions reshape how users, banks, merchants transact today – what do you feel banks of tomorrow will look like or, how will banking as a service start shaping up?
Next to a digital divide, we will start to see a “trust divide”. There will be a place for CUs and community banks as we know them, but the rest of the market will be pushed to “Open Banking” concepts, and it will be critical for financial institutions to find ways to integrate with the full range of their customers systems AND processes.
Backbase focuses on serving all lines of business, through all channels, for all audiences, while being powered by one platform (and ensuring your compliance and security needs are met). Our platform is also open banking enabled so you can be future proof regardless of how your particular market develops or evolves.
A few thoughts on some of the most innovative B2B finance solutions you’ve seen in the market changing the game?
There is so much happening throughout the market. For example, we’re seeing more of:
1) Mobile ready/first B2B solutions.
2) Institutions plugging into ERP and bookkeeping systems.
3) More integrated payment experiences.
4) Low-cost routing.
5) More sophisticated data visualizations.
6) Entitlements being lifted out of point solutions and becoming available as an enterprise level/federated solution.
7) And a continued – relentless – focus on fighting fraud
As global fintech trends change and the market shifts due to business environments (and also Covid-19), what are your comments on the state of fintech in 2021 and beyond?
It sometimes feels that there are more fintech than financial institutions. We expect to see consolidation of both. Solvency will become one of the key selection criteria for banks looking to acquire or partner with fintechs.
The flipside to this consolidation trend is that FIs still want to avoid “concentration risk,” meaning they want to avoid procuring all their needs from one single, monolithic vendor.
Backbase is a fast growing fintech software provider that empowers financial institutions to accelerate their digital transformation and effectively compete in a digital-first world.
Vincent Bezemer is SVP Americas at Backbase
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