Keeping Up With Fintech: Why Financial Institutions Need Fully Digital Processes

By Nisha Pattan, Product Marketing Director, Docusign

In 2017 and 2018, the Matrix FinTech Index, a stock index of 10 top publicly traded fintech companies, showed returns one hundred times higher than a similar index of traditional top 10  financial institutions that includes Visa and JP Morgan. At the same time, venture-backed fintech startups raised a record $39 billion in 2018, 120% higher than fintech funding in 2017.

These numbers  reflect what all of the legacy financial institutions already know: fintech is transforming their industry and threatening their dominance. Many of these upstarts are appealing to a tech-savvy customer base by modernizing and digitizing processes that have been stagnant for decades.

Startups set the standard

Fintech startups are notably dedicated to a simplified, intuitive digital customer experience and are investing heavily in the technology to enable it from end to end. For example, Lemonade, a property insurance startup, uses chatbots and AI to provide a faster and more seamless customer experience. It takes mere minutes to sign up for a policy, and the company has paid out claims in just three seconds thanks to automated anti-fraud algorithms and cash transfers. The result? Lemonade is currently ranked the top provider of renters insurance on insurance ratings and reviews site Clearsurance.

Kabbage, a small-business lender, also uses AI to review loan applications. This creates operational efficiency and a smoother customer experience. Kabbage’s tech also goes a step beyond the traditional credit check by analyzing business performance data, which can be a better risk indicator.

Financial services companies of all sizes want to build strong relationships with their customers, but in an era defined by fewer in-person interactions and an expectation of digital experiences, large financial institutions need to emulate the fully digital experience offered by fintech competitors like Lemonade and Kabbage, who are increasingly nipping at their heels.

Digital transformation starts with Salesforce

Many financial institutions’ made one of their first digital and cloud investments in a CRM system, specifically Salesforce. In the past decade, Salesforce has become a partner to the financial industry, providing so much more than just a customer database. It allows access to key decision-making data, improves employee productivity, and enables many front-end capabilities that improve the customer experience.

Although many of finance’s operational elements are digitized in Salesforce, one key process is often left behind: agreements. Across every type of financial institution, from banking to wealth management to treasury, agreements are a critical part of getting business done. So when a small business has to print a 50-page loan document or a new wealth management client has to print and sign a lengthy Form ADV, the entire digital experience up to that point is undermined. And so is the investment in Salesforce.

And is fully realized with Docusign

Docusign for Salesforce digitizes the “last mile” of financial transactions requiring agreements and signatures. Together, Docusign and Salesforce allow financial services companies to prepare and send digital agreements to their clients—ensuring convenience, compliance and a better organized end-to-end process.

Know Your Customer (KYC) and Anti-Money Laundering (AML) processes, for example, can  take financial institutions an average of 40 days to complete, slowing the onboarding process to a crawl. Much of this delay is due to the many questions and forms that customers must address—often on paper. With Docusign for Salesforce, KYC and AML forms can be auto-populated using CRM data and sent to the client digitally to complete and e-sign from anywhere on any device. Digitizing these processes decreases the 40 day turnaround to just a few hours.

Financial institutions feel the mounting pressure to provide intuitive digital experiences for their customers to keep up with their new fintech competition, and that means ensuring the entire process is simple and digital, including the critical final step: agreements.

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