Kofax White Paper. Transforming the First Mile : Kofax Customer Onboarding for Financial Services

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1 Kofax White Paper Transforming the First Mile : Kofax Customer Onboarding for Financial Services Executive Summary Customer onboarding is one of the most important events in the life cycle of a banking customer, setting the stage for the entire relationship going forward.when an account opening experience is slow or painful,it can leave your customer with a negative impression that may linger for months, eating into future sales and even leading to defections. This is hardly conducive to success in an industry where institutions are working overtime to sign up new customers and where margins and budgets remain tight. Leveraging Technology to Onboard Customers Faster and Drive Loyalty Why do so many banks deliver such unsatisfying onboarding experiences? Three reasons stand out: Process complexity, more demanding customers, and expanding channels. Process Complexity Banks are dealing with increasingly complex business environments created by the growing burden of regulatory requirements, inefficient organizational compartmentalization (silos), and entrenched legacy information systems all of which makes it more and more difficult to orchestrate onboarding activities. Tighter government and industry regulations designed to protect consumers and curb fraud is partly to blame, adding a raft of new requirements around information gathering, document verification, and fact checking during the account opening process. The new verifications and document checks may be necessary, but they also complicate and lengthen the onboarding experience.

2 White Paper Transforming the First Mile : Kofax Customer Onboarding for Financial Services Page 2 System inflexibility can introduce additional bottlenecks during the onboarding process, creating unnecessary friction with your customers during the sensitive period of time when they are just being introduced to the financial institution and its people. In fact, studies show that when customers decide to leave, it s usually early in the relationship. These early months are also prime time for selling related products and services; all the more reason to get off on the right foot and deliver a fast, painless onboarding experience. The reality is that most banks structure their customer interactions to match their existing set of business processes and information systems when actually it should be the other way around: Customers needs should be driving the bank s business processes and systems. Such misalignments are common, though most banks are compartmentalized in functional silos that make it hard to integrate and automate basic business processes, including customer onboarding. More Demanding Customers The job of onboarding new accounts is tougher for banks because customers are more demanding and expect a higher level of convenience than ever before. The new breed of customer is almost always savvy and likes to shop around online for better deals. They are accustomed to one-click access to services and grow impatient with too much paperwork. Banks need to figure out how to appeal to this new generation of customers with a fast, streamlined onboarding process that shows just how connected and convenient your bank can be. You should never worry that customers will perceive your bank as behind the times. Expanding Channels Customers expect to connect with your bank around the clock through a multiplicity of channels and devices. Face to face to be sure, but that s only a start. They also want online banking right from the start as well as mobile banking via smartphones, tablets and other devices. Offering a full range of channels for banking customers can complicate the onboarding process.the key is to figure out the optimal mix of channels and services that maximizes the customer experience while meeting regulatory requirements and controlling costs. Onboarding Challenges So far banks have fallen short of delivering a fast, seamless, and convenient onboarding experience. So, it s not surprising that 90 percent of new customers abandon account applications before they are completed, and customer churn remains a serious problem in this sector. According to Cornerstone Advisors, the average branch reported closing 100 accounts for every 112 it opened per month. The good news is that there is a better way. The Impact of Inefficient Onboarding Ineffective and disjointed process Siloed customer, account and product information Need to support multiple channels Multiple systems, manual and paperbased workflow Increasing regulatory environment Business systems have embedded entitlements Onerous application process Hard to support multiple products Poor and inconsistent client experience Inability to track progress and manage the process Requires flexibility in system and Processes Entitlements are difficult to setup and support Negative customer experience Long average time to onboard clients Loss of transaction fees High internal cost to support Longer time to market to add new products Diminished competitiveness and market share

3 White Paper Transforming the First Mile : Kofax Customer Onboarding for Financial Services Page 3 Onboarding Processes Lack Business Agility Kofax: A Better Way to Onboard Most banks can do a dramatically better job at Mail Branch Call Center Web/Mobile customer onboarding and garner significant payback in terms of customer loyalty and profitability. The new process, pioneered by Kofax, enables banks to Deposit Brokerage digitally capture essential documents such as IDs, proofs of residency, and more at the Point of Origination when and where customer facing Mortgage Securities Credit Card Comm. Banking interactions actually occur and launch automated processes and workflows that reduce onboarding Attrition & Cross-Selling Rates Among New Clients New Customer Attrition % 4.0% 3.5% 3.0% 2.5% 2.0% 1.0% 0.0% Onboarding Emphasis New Customer Cross-Sell % 12% 10% 8% 6% 4% 2% 0% Attrition % Cross-Sell % 2008 Harland Clarke client case study cycles to a fraction of the time they normally take. Throughout the process, the solution ensures greater accuracy, transparency, compliance, and smart risk management. Kofax focuses on streamlining the initial informationintensive interactions between a bank and its customers. Too often these interactions are labor intensive, slow and prone to errors, and can adversely affect a customer s perception of your business. This is what Kofax calls the First Mile challenge for business. It is where customer acquisition is won or lost and the journey to lifetime brand loyalty begins. Your Channel of Choice: Leveraging Mobile Channel of Choice Bank App Next-generation onboarding solutions from Kofax generate efficiencies because they incorporate every Local Branch Visibility Via Web Portal channel that banks and customers use to communicate Customer Submissions and do business, whether face-to-face at branch offices, through regular mail or , through web portals, or using apps designed for mobile devices. Telephone Processing Tracking Trailing Documents Error Correction Alerts

4 White Paper Transforming the First Mile : Kofax Customer Onboarding for Financial Services Page 4 Moving Closer to the Source to Reduce Complexity Kofax customer onboarding solutions allow banks to collect documents and information at their source and then immediately launch relevant business processes. The Point of Origination can be at the branch office or at the customer s home, where mobile and web channels can facilitate information transfer. Gathering information at the point it is created accelerates the customer onboarding process. Kofax Customer Onboarding Kofax Customer Onboarding transforms the critical First Mile of customer engagement, ensuring that banks collect the right information up front, the way the customer wants to interact with the bank whether via a mobile device, over a web portal, via fax or mail and route it automatically, providing fast, responsive and transparent service to the customer and management team. By getting the onboarding process off to the right start, you can boost customer satisfaction, increase retention, and drive greater share of wallet. Using Kofax multichannel onboarding solutions, banks can capture customer forms and documents anywhere, anytime. Managers can scan forms and supporting documents at the branch; customers can submit information through web portals or mobile devices. The centrally managed process can start via one channel and continue through another. Meanwhile the solution extracts and validates the content, handles exceptions, and uses dynamic workflows to ensure that the onboarding process stays on track and optimizes the customer experience. Banks that deploy automated onboarding systems report increased customer satisfaction during the crucial first few days of the relationship, when the foundation for Systems of Engagement generate real time, information intensive communications from customers. Kofax provides an essential link between systems of engagement & systems of record for an... Systems of Record are enterprise applications designed for internal purposes. Paper Fax Digital Scanners MFPs/MFDs Portals Mobile Devices s MS Office/PDF TIF/JPG Files Optimized Customer Experience & Greatly Reduced Operating Costs ERP/CRM/LOB ECM & Records Mgt. Databases & Other Archives IT & Telecom Infrastructure Integrated with LOB System to: Verify Identity Compliance Detect Fraud Establish Account Transfer Funds XML/EDI Data Streams

5 White Paper Transforming the First Mile : Kofax Customer Onboarding for Financial Services Page 5 customer loyalty is set. Banks say the benefits outweigh the costs by a wide margin, in part because these solutions require no fundamental changes to their existing business systems or proprietary procedures. We are actively building an onboarding solution using Kofax that automates processes across multiple channels such as mobile, web portals, branch network and third party. Financial Client Going Mobile for Speed and Convenience Mobile is currently a critical differentiator among banks. Many people using mobile banking today, for example, will not switch to an institution that doesn t provide a mobile app. Kofax onboarding solutions integrate with mobile technologies on several levels, allowing customers to submit documentation from almost anywhere, and enabling banks to update customers via texts, notifications, and other services. Achieve New Levels of Customer Service and Satisfaction Fast, hassle-free onboarding translates into more satisfied customers and helps reduce attrition and churn rates. With a full range of channels and devices available to support the onboarding experience, banks stay in close touch with timely, personalized follow-up communications, further building trust and loyalty. Increase Efficiency and Productivity A rapid account opening process enables customerfacing employees to spend more time with customers and close more business. Banks deploying Kofax onboarding solutions are generating up to 80 percent time-savings by minimizing manual paper handling and creating a unified platform for sharing data and documents across the enterprise. Mitigate Risk and Promote Compliance Financial services companies have reported a 20 percent to 60 percent decline in document error rates after deploying capture-enabled onboarding solutions that Broad Ranging Benefits of a Distributed Capture System Increase in scan and data 24% validated closer to the customer 32% Reduction in misplaced documents 38% Savings in storage, transportation & handling costs Fewer staff needed for head-office processing 9% Lower cost of equipment than centralized scanning operations 14% 8% Increase in feedback/approval rating while customer in store 57% End-to-end process time reduced Source: Survey of more than 200 financial services companies.

6 White Paper Transforming the First Mile : Kofax Customer Onboarding for Financial Services Page 6 All banks understand the importance of a well designed and thoroughly executed customer onboarding process. If the customer experience goes smoothly from the get go, banks experience lower attrition and higher cross-sell. Margaret Kane, chief executive officer and president at Kane Bank Services, a retail bank consulting group minimize manual work. The solution also enforces document tracking practices to meet industry regulations and reduces risk with rigorous central management of sensitive customer information. Reduce Operational Costs Manual, paper-based onboarding can cost up to 20 times more than automated systems, so the potential for savings is huge with capture-driven onboarding. For example, one financial services firm with 480 branches saved $1 million on overnight shipping of new account applications. Banks can now process more new accounts with the same or fewer resources. Increase Revenue and Profitability Positive customer experiences during onboarding often propel new revenue streams. One bank tripled new streams by leveraging enrollment information to create targeted, high-impact sales and marketing programs. Winning the Battle for Customer Loyalty With the battle for customer loyalty intensifying, financial institutions are seeking solutions that can adapt to an industry landscape marked by changing customer preferences and tightening regulatory requirements. By incorporating multichannel capture with business workflow capabilities that align to their unique business models, banks can deliver services that scale to their business, control costs, and deliver a truly satisfying customer experience. To learn more about Kofax Customer Onboarding: business closings by automating the capture process and linking real-time data capture with product experts and branch personnel. Other banks are expanding revenue 60 percent of cross selling takes place within the first month. The second and third months account for 13 percent of subsequent product purchases, and only about 25 percent of the lifetime cross-sell for a customer occurs after that. Margaret Kane The Benefits of a Kofax Onboarding Solution Increase time to revenue Enhance customer experience Create loyal, lifelong customers Reduce costly errors, and frustration Ensure agile compliance with new regulations Do business the way your customers demand Processes are visible, transparent and measurable

7 White Paper Transforming the First Mile : Kofax Customer Onboarding for Financial Services Page 7 About Kofax Kofax plc (LSE: KFX) is a leading provider of innovative smart capture and process automation software and solutions for the business critical First Mile TM of customer interactions. These begin with an organization s systems of engagement, which generate real time, information intensive communications from customers, and provide an essential connection to their systems of record, which are typically large scale, rigid enterprise applications and repositories not easily adapted to more contemporary technology. Success in the First Mile can dramatically improve an organization s customer experience and greatly reduce operating costs, thus driving increased competitiveness, growth and profitability. Kofax software and solutions provide a rapid return on investment to more than 20,000 customers in financial services, insurance, government, healthcare, business process outsourcing and other markets. Kofax delivers these through its own sales and service organization, and a global network of more than 800 authorized partners in more than 75 countries throughout the Americas, EMEA and Asia Pacific. For more information, visit Kofax, Inc. All rights reserved. Kofax, the Kofax logo and First Mile are trademarks or registered trademarks of Kofax, Inc. in the U.S. and other countries. Other names may be trademarks or registered trademarks of their respective owners. ( )