Digital Bank Account: SignUp and Closure

You opened a digital bank account.

A fintech app where your money moves as smoothly as data. 🔮

Opening the account and activation was smooth.

Even after the app was in a partnership with a legacy system of a bank, NBFC, insurance or investment broker. 👴

Frictionless and every other jargon used in their marketing pitch. 👌

But after a while, you had a few ugly experiences. 😠

Now what?

You have ranted enough on customer support calls, emails and all other social media channels.

But at this point, you are fed up and want to end this relationship with the app. 2 things can happen here, Closing the account and deleting the data.

We’ll talk about the first part, where You want to close your account.

How ??

Why there ia no close account or a delete button? Why no one thought of it?

Well, actually, people have thought of it.

Opening a digital bank account

Now let’s take a step back.

Customers don’t want to visit the bank to open an account.

Don’t worry the bank will send you a guy with a biometrics device at your place. All you have to do is to be present at the time and the place you promised. That’s biometric KYC. 🚶

You don’t want to wait for a guy to visit your place, don’t worry, we’ll have vKYC.

Ohh, you don’t have your physical PAN at the moment. Don’t worry we;ll have ePAN in vKYC. 📹

Ohh, you don’t want to be part of a video call or something. Don’t worry we’ll have cKYC. Although RBI is eying on this as this is not a face-to-face method to open an account. They need to be reminded every 6 months that they are the ones who they claim to be. 💳

Now, you understand this is a little difficult now. 🛑

cKYC is such a smooth process but now RBI thinks, this can lead to fraudulent accounts and stuff.

How ? 🤔

How do you make sure the bank account opening in your name is actually done by you? Not because someone got access to your KYC document and OTP.

Now, this is happening at the time of account opening. Little tricky but vKYC fixes this. ✅

I mean it’s operation heavy. But a few tweaks can improve this.

For example, why do you need a signature in vKYC? 🖋

So that, in the future when you wish to have a chequebook, the bank can verify the transaction. 🎫

Think about it, when was the last time you felt the need for a cheque from a digital bank account. 🤔

Yes, some people do need them.

Then why not ask signature or just do a vKYC again for the customers who want the cheque book.

Why do you have to bother the complete customer base or top-of-the-funnel audience? 😮

Closing a bank account

Let’s fast forward to 5 years now and back to how it started when you wanted to close your account.

How?

Just tell the bank that you want to close it.

Once a bank account is created with a customer, a relationship is established.

Savings accounts, debit cards, credit cards, loans and more are products tagged to that account. That’s why having a customer ID is more important for a bank, not a savings account number.

Ethically, if you want to break a relationship, you should do it in person, not via text. 😿

How it works traditionally? 🏛

1. You visit a branch.
2. A person listens to your reasoning and tries to empathize with you and promises for better experience moving forward.
3. Even after this if you are not convinced, they close your account.

This process does 2 things, gives banks a last chance to retain their customer and verifies that the person was alive and in the right mindstate to take this action.

Nominees can also do that, but we’ll talk about it sometime later.

Now do this digitally. 💻

Digital product companies have cracked the 1st half.

When you try to end a subscription, they give you discounts, free extensions and more.

This works. Either they retain the customer or delete the account.

This is because it’s just a digital product, not your bank account.

Even banks haven’t figured out how to do it.

The thing is that banks can.

They have physical branches, so they are RBI compliant.

How digital apps will offer these solutions?

They don’t have a physical branch.

Ooh wait, they are not even their customers. They are the bank’s customers.

Ideally, they can’t close the account. Similarly, they can’t open an account on their own.

They use the bank’s digital solution’s APIs.

Now, even banks don’t close accounts digitally, how fintech will do that.

This means banks don’t have a service to close a bank account digitally, how will they build API on top of that so that partner fintech can perform the same action.

It’s like Sheldon’s wishlist of items that are not invented yet.

Yes, all of this is painful, and so does opening a bank account a decade back.

People are working, and banks are also participating in these discussions.

Fintechs are close to users. They are coming up with use cases, which banks haven’t thought of cz it was never their north star and that’s okay.

You can’t be everyone’s everything.

So, what will it look like? 🤔

Similar KYC process which is built for onboarding?

A new KYC process account closure?

RBI will come up with something seeing the sheer amount of accounts opening digitally without a digital process to close them.

How banks will pitch customers in an attempt to retain them cz vKYC agents are usually now bank employees.

What if the nominee of the bank account holder wants to close the account and transfer the amount or transfer the ownership?

What will happen to your EMIs, SIPs, and auto-pay?

You refunded something on Myntra and selected your bank account as the destination for refund money. What will happen in that case?

Where will that money go? How you’ll be notified?

When you close your account, will you get an option to select an alternate account to transfer all such standard instructions and more.

Will the bank tell you where all my bank account details are given already?

If they can, can they now ??

If they can, then why they are not doing it?

So many unknowns and interesting times ahead. 🤓

Stay tuned. ✌️

Example:- You can close a credit card only when unpaid bills are zero. Now think about the cases when you want to close a bank account.