Thursday, May 31, 2007

New account opening: as good as it gets?

I've been talking with many coworkers and customers recently about the new account opening problem. It seems that people outside the financial services industry rarely identify a big problem with this phase of a customer relationship, until something goes wrong. After all, what could be so difficult about the process of opening a new brokerage account, buying an annuity, or getting life insurance?


Inside the industry, and depending on who you speak to, the view varies, fitting one of several categories:

  1. Help!!! I'm drowning in paper and my competitors seem like they are a million miles ahead of me.
  2. We've squeezed every last penny out of the process, centralizing our application processing, offshoring the data entry and outsourcing the credit and risk checking
  3. We've made a giant leap to online application forms, which spool out the back of a printer in the backoffice for keying into our current systems
  4. We're better than the others. Electronic forms are actually captured directly into a business application and delivered to a group of people in the back office for processing. We still need to handle paper for signatures and ID, but we think we're fairly electronic
So, if you're at the final stage, everything is great, right?! This has been the view of many US banks and financial institutions for a while - the nirvana of the electronic form and automated process. And other places outside the States are still striving to get to this point as well.

The fact is that Europe is leading a new wave in optimizing new account opening. They've already cut the waste in the process to a level that, in the leading organizations there is little left to save. They've reduced the processing time to a level that customers are comfortable with. What's left?

As we've all seen, there has been a backlash against offshore customer service - we want to hear a voice on the phone line that has a familiar accent and is not distorted by ten thousand miles of cheap copper cable. In fact, many people have shown a desire to pay for personalized service, even face to face. Unfortunately lean, centralized, outsourced processes don't allow that type of familiarity or human interation with the customer. Rarely in fact do they allow visibility into where a customer's new account application actually is in the world.

The optimization of new account opening for the European leaders, and the leading US banks are hot on their heals, is around customer service, personalized attention, and having the customer's information and application to hand instantly on request. This may be why we see a new Citi branch opening on every street corner in major US cities. But without the ability for agents in these branches to get involved in the business processes around their new and most impressionable customers, they'll just be another layer of annoyance between the customer and their new account getting opened correctly.

There is always more to do, so don't sit back on past successes. The rest of the world is getting ready to leapfrog the old-time US customer service reputation.

[UPDATE: By the way, I meant to say that these thoughts are often reflected by The Bankwatch Blog, a constant observer and commentator of banking and financial services globally. For more evidence of what the leaders are doing, take a look]

Technorati tags:

A post from the Improving New Account Opening blog

4 comments:

Mohan Babu said...

I like the way you build the story: Technology brings in automation and convenience; but is no substitute for good customer management.

Phil Ayres said...

Mohan,

You summed it up perfectly. I think that customer service will become a central feature of business improvement until the next big efficiency drive.

Looking at your blog, you've had a lot of experience in the pros and cons of many process outsourcing approaches.

Cheers

Phil

Savvy Intrapreneur said...

Phyl,

Great article that keeps things in perspective that technology will never replace good ole fashion customer service. As technologists, we must keep perspective with all the cool systems we bring online.

I saw you post regarding "Intrapreneurship" on Scott Gatz' blog. If you would send me a Bio of yourself, it would be an honor, if I could highlight your story on my blog www.SavvyIntrapreneur.com

Cheers!!

C.E. Reid
SAVVY INTRAPRENEUER

Phil Ayres said...

Thanks for reading, and for the comments.

You can get my bio on LinkedIn, at:
LinkedIn Profile

And yes, please feel free highlight any of posts - all I ask is you link back to this blog in reference.

Thanks

Phil