Account Transfers Can Make or Break Customer Relationships: How Can Banks Support Them?

David Abbou

The relationship between banks and their customers often spans a lifetime — through all of the ups and downs. Customers rely on their bank or financial institution to manage the financial implications of personal and family milestones — good and bad — throughout the lifecycle. And some of the main ways that trust is tested are when account transfers become necessary.

Transfering or assuming a bank account, loan, or debt can often come with a lot of pressure for the customer as many involve significant sums of money, while some often involve hardships that have struck their personal life or their loved ones’.

Account transfer processes that heap more stress and complexity to these situations risk damaging their relationship with the bank for good.

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There are several reasons banking customers will request to either transfer or assume their existing account. Here are some of the most common ones:

  • Death of a family member or loved one: To repay or settle the account of a deceased loved one, customers will request to assume responsibility for a variety of loans and other debts the original account holder had been carrying.
  • Divorce: Between 40-50% of marriages in the U.S. end in divorce and typically spouses going through this will look to separate joint accounts and divide up their banking debts.
  • Disability due to illness or injury: As of February of 2021, approximately 8.2 million Americans receive disabled-worker benefits from Social Security. In many cases, Social Security Disability Insurance (SSDI) payments also extend to the recipients’ spouse and children.
  • Planning for future family milestones: Many parents open up a savings account and regularly contribute funds so that they can support them when they head off to college or university or get married. Often they may deem the best way to transfer this support to their children is to simply transfer that account over to them.
  • Unemployment: In large part due to the economic challenges caused by COVID-19, unemployment in the U.S. skyrocketed to 11.1% in June of 2020. Since the New Year, the unemployment rate has hovered around the 6% mark.
  • Underemployment: But financial difficulties have not just befallen the unemployed. The impact of the pandemic still lingers and has produced high levels of underemployment as well — and that’s affecting over half of college graduates in many major fields, resulting in many skilled young adults experiencing dealing with lack of income for extended periods of time.

Whether it’s how to transfer bank accounts or loans, how to transfer a mortgage to another person, or how to repay another customer’s debt, these transfers are important decisions and may well be high stakes for the customers who may already be experiencing trying circumstances.

Are current banking account transfer processes helping to make it easier or harder for customers to complete?

Broken Account Transfer Processes Add Grief To Difficult Lifetime Events

Current banking account transfer processes tie up the time and efforts of both customers and bank employees in bureaucracy. This slows completion of these processes and often exacerbates customer stress that’s already running high.

For example, someone who wishes to pay off the loan of a deceased loved one may typically visit the branch or call the contact center to update them that the original customer has passed away and that they would like to make installment payments on the account.

In many cases they may not already be a customer of that particular bank and therefore they’ll be asked to verify their identification. Depending on the type of loan and banking policy, this potentially new customer will need to supply identification documents to a local branch. Other times, they may be driven to a secured web portal to go through KYC identification.

The bank will email the customer a form to complete and sign indicating they agree to assume responsibility for the bank loan.

But receiving a crowded PDF form filled with legal statements and stipulations will lead to many customers pushing off this task and waiting until they can get that form printed so that they can review it carefully before signing.

Dealing with the death of their loved one, this customer quite likely already has a number of time-consuming tasks on their plate. Now they must print and complete a form, and go on a quest to find a fax machine or scanner just so they can send it back to the bank.

The paper chase doesn’t end there. The bank also requires a slew of supporting documents.

First, they’ll need to verify this new customer’s income and usually will run a credit check, while asking for income tax statements, pay stubs, possibly collateral assets, and additional documents that can prove their ability to pay on the loan.

In this case, they’ll also need a copy of the original customer’s death certificate. This customer needs to assemble all of these documents and then get themselves to that scanner or fax machine yet again — but they may want to avoid sending documents with sensitive information over email — thus necessitating another trip to the branch.

Digital Silos and Legacy Processes Hurt Both Customers and Banks’ Bottom Line

Banks’ reliance on digital silos and manual, paperwork-heavy processes are the root cause of these broken customer journeys.

Despite investing in a wide array e-signature solutions, secured web portals and a stack of other software to help collect eForms and supporting documents, patching together point solutions that are not integrated and can only handle one aspect of the customer’s journey still make it mandatory for them to take multiple steps for account transfers and many other banking processes.

Legacy processes that tie up employees at the call center or branch waste substantial time and resources on chasing paperwork. They also completely undermine the purpose of banks’ digital investment in the first place. As mentioned before, relying on outdated PDF-based forms will neither get them completed quickly or digitally and virtually guarantee the customer will be bouncing from channel to channel.

Broken journeys for completing transfer requests for bank accounts, loans or debts are riddled with pain for both sides:

Customers are forced to:

  • Interact with many channels and often least convenient ones for them
  • Dealing with the annoyance of submitting forms and documents
  • Wait for a reply to a process they have little to no visibility into

Banks:

  • Struggle to capture all requirements to process account transfers and experience delays in completing them
  • Rely on manual processes and must engage each party separately to complete account transfers instead of in a joint, unified manner

Digital Completion Technology Takes Customer & Bank Pain Away

In today’s digital- and mobile-first era, banks and financial institutions need fast and compliant automated workflows that take the pain and bureaucracy out of handling account transfer requests.

Taking advantage of emerging solutions that digitally complete the entire customer-facing experience enables banks to replace disconnected siloed solutions and legacy processes with one seamless and unified digital journey that encompasses all steps banks need the customer to take to review and process account transfers.

A Digital Completion solution integrates all eForms, eSignatures, ID verification, and supporting documents in one digital session that they can access and complete on their smartphone or device most convenient for them.

Customers can simply tap and swipe through this interactive experience to fill out forms, verify their ID with a simple selfie taken from their mobile, sign legally binding account transfer agreements, and upload all required documents. Live agent assistance during the session helps answer any questions they have in real time so they can efficiently complete the entire process.

Making it as simple and efficient as possible to assume or transfer an account is even more critical for banks:

It directly Impacts banks’ bottom line:

Many of the circumstances surrounding the transfer or assumption of loans revolve around continuity of legal responsibility (e.g. a family member stepping in to help pay a loan or debt for a terminally ill or deceased loved one).

Complicating or delaying account transfer requests for willing payers results in loans and debts that are unpaid for, and can lead to future disputes about interest that may have accrued during the time that a customer attempted to assume an account.

Accelerating this process for these customers helps banks:

  • cut overall time to resolution
  • prevent accounts from falling into delinquency
  • avoid needless disputes
  • get outstanding debts paid

It can make or break long-term customer relationships:

Customers hit with bureaucracy while simply trying to help that loved one in need or do right by them by assuming repayment of their debts remember those that added comfort or angst to this experience. A truly digitally complete journey allows banks to eliminate these pain points and enhance the relationship with these customers well into the future.

Banks and financial institutions currently streamlining account transfers via Digital Completion see improved:

  • First-call Resolution>
  • Turnaround Times for form collection
  • Overall time to resolution
  • NPS / CSAT
  • Customer experience

Simplifying a customer’s ability to transfer or assume accounts helps banks ensure loans and debts get paid quicker. But in the bigger picture, it also eases the customer’s stress and anxiety during what is often a difficult time, increasing confidence in their bank — and the likelihood of long-term loyalty and lifetime value.

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