Banking
Digital Account Opening: Future-proofing the Digital Customer Experience in Banking

The financial services landscape is shifting. The market share of the big four legacy banks is shrinking (from 92 per cent to 70 per cent in a decade), and it’s been predicted that one in ten European banks won’t exist in the next five years. The fintech explosion – including the rise in challenger banks built on modern technology – has brought the spotlight on the quality of the services banks offer like never before, and consumers’ expectations are only getting higher: customers simply won’t tolerate inconvenience or poor interactions.

Tim Bedard
Agreements sit at the core of all businesses, but for banks and financial institutions (FIs) they’re often higher value and higher risk. Opening a new bank account, onboarding new applicants, or taking out a mortgage are usually more sensitive than your everyday employee agreements, and they’re also subject to regulatory standards and legal enforceability.
Worryingly, many banks are still relying on manual, disjointed approaches to agreements, which exposes them to potential operational, regulatory, fraud and customer experience risks. Agreement automation, which has been made possible thanks to significant advances in ID document verification and other technologies, such as identity verification and e-signatures, can help to mitigate these risks.
Banks and financial institutions need to ensure they adopt these new technologies in order to future-proof the digital customer experience, and remove the risks inherent in manual agreement processes.
E-signatures: Eliminating the Paper Trails and Increasing Compliance
Signatures are a foundational component of financial agreements that have traditionally required customers to visit a branch, or go through the time-consuming process of printing, scanning, signing and posting documents. This becomes even more testing if you’re spanning geographical regions, and as we continue to operate in an increasingly dispersed world, banks need to ensure they’re able to offer the same positive customer experience no matter where they, or their customers, are located.
Additionally, e-signature solutions can also capture a comprehensive audit trail which records what the customer consented to, when and how they signed. This is a crucial capability so banks and FIs can be GDPR compliant along with other regulations.
When it comes to agreement automation, many banks start by adopting basic e-signature capabilities which eliminate the pain-points associated with traditional “wet” signatures. However, e-signatures alone are not enough. Banks with semi-automated or siloed processes end up being insufficient from both a customer experience and risk perspective – either because paper agreements are introduced back into the process at a later stage, or because manual identity document verification checks are required.
Context Aware Identity Verification
Customer Identity verification has historically been one of the most challenging processes for banks to digitize. Up until now, it has either involved requiring a customer to come into branch or by leveraging legacy knowledge-based authentication (KBA) methods that rely on cross-checking information provided by the customer with third-party databases or credit agencies.
There are obvious downsides to both approaches. As bank branches continue to close combined with the accelerated adoption of digital banking, requiring customers to come in-store to verify their identity is a significant source of friction in the new account opening process. This has been compounded by the rise of mobile-only challenger banks who have played a large part in altering customer expectations of what they want from a bank. If someone can open a bank account with Monzo on their mobile phone, then they expect to achieve the same quick and positive digital customer experience from other providers.
The problem with KBA is the static nature of the information, combined with the rise of large-scale data breaches. If the information is stolen, then it’s all too easy for criminals to open fraudulent accounts.
In order to verify identities securely and without compromising the customer experience, banks need to adopt a context-aware identity verification approach, which combines risk analytics with multi-layered digital identity verification methods, such as ID document capture and biometrics. By doing so, banks will be able to digitize an essential component of account opening process that allows them to acquire new customers quicker while boosting customer experience.
There are a range of benefits to agreement automation and digitizing the account opening processes, including boosting conversion, reducing abandonment rates, stronger regulatory compliance and increasing operational efficiencies, all of which contribute to an enhanced customer experience.
Banks are operating in an increasingly hyper-competitive market, and customers are no longer wedded to one provider. Digital account opening goes a long way to ensuring financial institutions can provide a secure digital customer journey, which will not only safeguard ongoing customer loyalty, but also win new customers from competitors.
Banking
Commerzbank to lose 1.7 million clients by 2024 – Welt am Sonntag

FRANKFURT (Reuters) – Commerzbank expects to lose 1.7 million customers by 2024 as part of its current restructuring, resulting in a 300 million euro ($364 million) hit to revenue, weekly Welt am Sonntag reported, citing sources close to the bank.
The lender hopes to offset the drop by growing its loan business as well as by expanding its business with corporate and very wealthy clients, the report said, without giving any further detail of why customer numbers were expected to decline.
It also didn’t say if any specific category of client was most likely to be lost.
Commerzbank declined to comment.
According to the bank’s website it serves around 11.6 million private and small-business customers in Germany and more than 70,000 corporate and other institutional clients worldwide, so the reported loss of customers would suggest a drop of around 15%.
The bank earlier this month reported a $3.3 billion fourth-quarter loss, sinking further into the red as it continued a major restructuring and dealt with the fallout of the COVID-19 pandemic.
The bank’s restructuring plan involves cutting 10,000 jobs and closing hundreds of branches in the hope it can remain independent.
($1 = 0.8253 euros)
(Reporting by Christoph Steitz and Tom Sims; Editing by David Holmes)
Banking
Citigroup considering divestiture of some foreign consumer units – Bloomberg Law

(Reuters) – Citigroup Inc is considering divesting some international consumer units, Bloomberg Law reported on Friday, citing people familiar with the matter.
The discussions are around divesting units across retail banking in the Asia-Pacific region, the report https://bit.ly/3pD57WP said.
“As our incoming CEO Jane Fraser said in January, we are undertaking a dispassionate and thorough review of our strategy,” a Citigroup spokesperson told Reuters.
“Many different options are being considered and we will take the right amount of time before making any decisions.”
The move, part of Fraser’s attempt to simplify the bank, can see units in South Korea, Thailand, the Philippines and Australia being divested, the Bloomberg report said.
However, no decision has been made, according to the report.
Revenue from Citi’s consumer banking business in Asia declined 15% to $1.55 billion in the fourth quarter of 2020.
The divestitures could be spaced out over time or the bank could end up keeping all of its existing units, the Bloomberg report said.
The firm is also reviewing consumer operations in Mexico, though a sale there is less likely, the report said, citing one of the people.
Last month, New York-based Citigroup beat profit estimates but issued a gloomy forecast for expenses. Finance head Mark Mason said the lender’s expenses could rise in 2021 in the range of 2% to 3%, weighing on its operating margins. (https://reut.rs/2ZwXRB1)
(Reporting by Niket Nishant in Bengaluru; Editing by Maju Samuel)
Banking
European shares end higher on strong earnings, positive data

By Sagarika Jaisinghani and Ambar Warrick
(Reuters) – Euro zone shares rose on Friday, marking a third week of gains, as data showed factory activity in February jumped to a three-year high, while upbeat quarterly earnings boosted confidence in a broader economic recovery.
The euro zone index was up 0.9%, with strong earnings from companies such as Acciona and Hermes brewing some optimism over an eventual economic recovery.
The pan-European STOXX 600 index rose 0.5%, as regional factory activity was seen reaching a three-year high on strong demand for manufactured goods at home and overseas.
Another reading showed the euro zone’s current account surplus widened in December on a rise in trade surplus and a narrower deficit in secondary income.
Still, the STOXX 600 marked small gains for the week, having dropped for the past three sessions as investor concern grew over rising inflation and a rocky COVID-19 vaccine rollout.
But basic resources stocks outpaced their peers this week with a 7% jump, as improving industrial activity across the globe drove up commodity prices.
“This week’s slightly adverse price action has all the hallmarks of a loss of momentum temporarily and not a structural turn,” said Jeffrey Halley, senior market analyst at OANDA.
“There is not a major central bank in the world thinking about taking their foot off the monetary spigot, except perhaps China. (Markets) will remain awash in zero percent central bank money through all of 2021 (and) a lot of that will head to the equity market.”
Minutes of the European Central Bank’s January meeting, released on Thursday, showed policymakers expressed fresh concerns over the euro’s strength but appeared relaxed over the recent rise in government bond yields.
The bank’s relaxed stance was justified by the euro zone economy requiring continued monetary and fiscal support, as evidenced by a contraction in the bloc’s dominant services industry in February.
The STOXX 600 has rebounded more than 50% since crashing to multi-year lows in March 2020, with hopes of a global economic rebound this year sparking demand for sectors such as energy, mining, banks and industrial goods.
London’s FTSE 100 lagged regional bourses on Friday due to a slump in January retail sales and as the pound jumped to its highest against the dollar in nearly three years. [.L] [GBP/]
French carmaker Renault tumbled more than 4% after posting a record annual loss of 8 billion euros ($9.68 billion), while food group Danone and German insurer Allianz rose following upbeat trading forecasts.
(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Sriraj Kalluvila and Shailesh Kuber)