How to Offer Efficient Account Opening for Complex Entities
Over the last decade, vendors have solved the problem of consumer account opening. Many solutions allow your company to open a consumer account in minutes. The Identity and Verification (ID&V) tools for individuals that power these consumer account opening tools are mature enough that they're now being commoditized. On the other hand, opening accounts for businesses and other complex entities like trusts, not-for-profits, MSBs, or foreign individuals, still requires manual processes and lengthy account opening times.
Not all clients are alike: Each business can have a unique structure with different types of beneficial owners. The business can engage with a plethora of products and services each requiring its own disclosure, forms, and document set. Different corporate structures require different documentation and different compliance reviews. This complex set of paths makes automation more challenging, leaving financial institutions (FIs) stuck with legacy manual procedures and teams managing all the administration.
Multiple Points of Contact: Numerous departments and contact points are likely involved when onboarding and serving business clients. In even a simple business account, you could have a banker, deposit operations, and Bank Secrecy Act (BSA) team all collaborating over a multi-day process. When you get into more sophisticated accounts with lending and treasury management, there could be as many as five or more departments involved to open one account.
Utilizing Different IT Systems: Each department may not use the same system, which could mean that onboarding an account requires entering the same information into many tools, such as banking core, document management, Anti-Money Laundering (AML) tooling, online banking, treasury management, and Customer Relationship Management (CRM). These processes and data entries are time consuming and create more opportunity for human error.
Clunky Legacy Systems: Older legacy softwares can be inflexible, expensive, difficult to navigate, and incompatible with other systems. Often, trying to connect and integrate your multiple software systems is more complex and costly that the solution might be hiring more employees to connect the manual processes.
In order to keep up with the industry leaders, FIs need to update these legacy and paper-based processes in favor of digital solutions. The COVID-19 pandemic caused many consumers to realize that the traditional brick and mortar branch isn't as important as they thought it was. Pre-pandemic, two important factors a businesses considered when looking for an FI were the in-branch services available and number of branches nationwide. These swiftly became irrelevant as business clients were forced to bank remotely.
This change, though painful and disruptive at the time, has created a once-in-a-decade opportunity for smaller or medium-sized banks and credit unions. A major selling point for larger institutions has always been their nationwide network of branches—but their second major selling point was superior technology, and that is a gap that smaller FIs still need to, and can, close.
The Enterprise Service Bus (ESB) does much more than simply connect various systems. It contains the intelligence to build out workflows allowing true automation between systems, unlocking the second secret to true automation of complex onboarding. This intelligent orchestration layer connects your best-in-class onboarding tool to your core, document storage, and any other systems used during the opening of an account—allowing for an onboarding experience that can truly meet and surpass the expectations of your new clients.
Offer an omni-channel, online from start to finish, account opening process.
Allow all accounts to be opened online, rather than only basic consumer accounts.
Build out sufficient anti-fraud and AML tools to minimize the risk of remote onboarding.
Ensure the user experience during onboarding remains excellent.
Accomplishing these objectives requires seamless connectivity between many different systems, in addition to a flexible onboarding tool. Once you have digitally collected all your client information and verified their identity, collected signed documentation, crossed all “t”s and dotted every “i”, you still need to open the account. This means, at a minimum, interfacing with the core and document storage. Optimally, it might also include treasury management, the loan origination system, and online banking too.
With the right architecture, FIs can meet the needs of their customers and members remotely and seamlessly while still maintaining top-notch customer service.
nCino acquired DocFox in March 2024. Learn more about our capabilities in the commercial onboarding and account opening space here.
Like many businesses across the US, community and regional banks face challenges stemming from economic fluctuations, regulatory reforms, and shifting consumer preferences. To navigate these headwinds, they’re leveraging their unique strengths, such as personalized customer interactions and local market insights.
