What slows down commercial account opening? 5 mistakes to avoid

Account openings play a key role in driving revenue for financial institutions. However, nowadays, many banking organizations face a major challenge: attracting and retaining

Challenges in commercial banking account opening

Account openings play a key role in driving revenue for financial institutions. However, nowadays, many banking organizations face a major challenge: attracting and retaining commercial banking account holders. 

This can be due to various factors. Opening a commercial banking account is often a slow and complex process that requires extensive documentation, which leads to frustration and the overall drop-off of the whole process.

Much like consumers in the retail banking space, corporate clients want easy, intuitive, user-friendly digital access to banking services and it starts with account openings.

Furthermore, with the acceleration of digital banking among all customer segments and the continued strength of fintechs, banks are under increasing pressure to set themselves apart from their competitors. 

Corporate clients care most about having access to fast, streamlined digital processes (one with minimal handoffs, no duplicate information, and a user-friendly portal).

McKinsey & Company, Winning corporate clients with great onboarding

5 mistakes to avoid

1. Lengthy processes and approvals

Lengthy processes and approvals create bureaucratic bottlenecks that frustrate businesses needing quick access to banking services.

Excessive paperwork, multiple layers of verification, and manual compliance checks delay account activation, causing businesses to seek faster alternatives elsewhere. It can result in lost business opportunities for banks.

To optimize this process, banks can leverage digital onboarding solutions, AI-driven document verification, and e-signatures to reduce paperwork and accelerate approvals.

Automating compliance checks through machine learning and integrating Know Your Customer (KYC) and Anti-Money Laundering (AML) processes into a centralized digital platform can further streamline account setup.

Additionally, offering pre-approved corporate account options and dedicated relationship managers can enhance efficiency while maintaining regulatory compliance.

2. Manual data input

Manual data input is a pain point at best and could even be a dealbreaker if the prospective client encounters too much friction. Manual data entry slows down corporate account opening by increasing the risk of human errors, duplication, and inefficiencies in processing large volumes of information.

Employees must manually input business details, verify documents, and cross-check information across multiple systems, which can lead to delays and potential compliance issues.

Streamlining the process can involve aggregating publicly available data or information banks hold on customers, taking care to check the data to avoid any regulatory pitfalls.

To enhance this process, banks can implement Optical Character Recognition (OCR) to extract data from documents automatically, reducing the need for manual input. Robotic Process Automation (RPA) can streamline repetitive tasks, while AI-powered data validation ensures accuracy and compliance in real-time. Banks are also advised to simplify the process into as few steps as possible.

3. Lack of technology infrastructure

The lack of technology infrastructure in banks is also a cause for slowing down corporate account opening by forcing reliance on outdated, manual processes that increase inefficiencies, errors, and delays.

Without modern digital systems, banks struggle with slow data processing, and fragmented verification procedures, which not only prolong account activation but also increase operational costs and the risk of losing customers to more tech-savvy competitors.

To resolve this issue, banks should invest in scalable cloud-based banking platforms that enable seamless data integration and automation. Upgrading legacy systems and implementing API-driven solutions allows for real-time communication between banking systems, reducing processing time and enhancing customer experience.

Moving away from siloed data architectures and legacy technology can help create a seamless, end-to-end onboarding experience. Fintech’s onboarding can be instructive, as they have been able to work with a blank slate to develop processes that are tightly focused on customers’ needs. 

Additionally, regularly upgrading digital infrastructure ensures banks remain competitive and efficient in handling corporate account openings.

 

4. A disconnected experience

The lack of consistency across banking channels creates a fragmented and disconnected experience, forcing corporate clients to repeat information and navigate different processes depending on whether they engage via online platforms, mobile apps, or in-person branches.

In an era where account holders expect a seamless and unified interaction with their bank, this cannot happen.

An omnichannel approach is the key to enhancing commercial account opening. It integrates all banking channels into a cohesive system, ensuring that customer data, documents, and application progress are synchronized in real-time.

With this approach, businesses can start their account application on one channel (e.g., a mobile app) and complete it on another (e.g., a branch or web portal) without losing progress.

5. Complex compliance requirements

Regulatory compliance is essential in commercial banking, but the diverse nature of corporate entities, ranging from small businesses to multinational corporations, introduces another layer of complexity.

Financial institutions need to tailor their onboarding processes to accommodate the varied needs and structures of these entities, which can be resource-intensive and require a high degree of customization.

AI and automation can help speed up background checks and flag suspicious activities, reducing manual work and human error. By tailoring onboarding processes to different business types, banks can make it easier for companies to provide necessary information without unnecessary delays.

Real-time monitoring and automated reporting also help ensure institutions meet legal requirements while preventing financial crimes. Additionally, ongoing employee training and collaboration with regulators create a culture of compliance, making the process smoother for both banks and businesses.

By leveraging technology, financial institutions can maintain regulatory adherence while accelerating the commercial account opening process.

Embrace an onboarding transformation with ebankIT

The challenges in commercial banking account opening—such as lengthy approval processes, manual data entry, outdated technology, inconsistent banking channels, and complex compliance requirements—create significant friction for businesses seeking financial services.

These inefficiencies not only delay onboarding but also increase the likelihood of customer drop-offs, pushing businesses toward more agile, tech-driven competitors.

To remain competitive, banks must modernize their processes by embracing digital transformation, automation, and streamlined compliance frameworks.

A fintech provider like ebankIT can help financial institutions optimize their services by offering omnichannel banking solutions, workflow automation, digital KYC, and seamless API integrations that enhance efficiency while ensuring compliance.

By leveraging these advanced technologies, banks can significantly reduce onboarding times, improve customer experience, and lower drop-off rates, ultimately fostering stronger relationships with corporate clients and gaining a competitive edge in the evolving financial landscape.