The future of banking is digital. For banks, attracting and retaining customers depends on being able to provide a comprehensive, fast and convenient digital experience – an experience that must also extend to the initial customer onboarding process.
Recent research indicates that a staggering nine-in-ten businesses experience some form of attrition during the onboarding process, with the banking sector experiencing the highest rate of drop-outs at almost one out of every four new customers1.
Consumers cite lengthy and complex processes as the main reason for abandoning digital onboarding, which not only represents a loss of future business revenue but can also harm a firm’s reputation in the marketplace.
Welcoming a new customer digitally is not only a vital part of the broader customer journey, but also a key way for the institution to collect the data and associated insights necessary for facilitating that journey. It allows banks to better support the individual’s needs through more personalized product recommendations and advice, as well as ensuring full compliance with Know Your Customer (KYC) and other regulatory requirements.
Below we highlight eight key elements of a complete digital banking onboarding solution.
- User-friendly interface – The digital onboarding process should incorporate a user-friendly interface that guides prospective customers through all the important steps involved in opening an account and accessing wider banking services. It should be intuitive, easy to navigate, and provide clear instructions at each stage.
- Identity verification – A robust identity verification process is essential to ensure KYC/regulatory compliance (see below) and prevent fraud. Best-in-class digital onboarding will typically identity verification methods such as facial recognition or biometric authentication.
- Documentation and data collection – The onboarding process should provide a simple method for customers to digitally capture and upload any necessary documentation and personal information. This may include identity cards or passports, proof of address, tax information, and other relevant material. The digital platform should securely store this personal information in strict accordance with regulatory requirements such as the EU’s General Data Protection Regulation (GDPR).
- Electronic signatures – To facilitate customer authorization of legal agreements and consent forms, digital onboarding will ideally incorporate electronic signature capabilities, allowing customers to sign documents digitally, eliminating the need for physical paperwork or visits to a branch.
- Regulatory compliance – In addition to GDPR, banks must ensure their digital onboarding process satisfies regulatory requirements relating to KYC, anti-money laundering (AML), and customer due diligence (CDD) procedures, with robust authentication and risk management provisions integrated into the onboarding workflow.
- Omnichannel experience – Digital onboarding should dovetail seamlessly with a consistent user experience across a range of devices (mobile, laptop etc.) and channels (app, web, chatbots, email and telephone). Customers should be able to start the onboarding process on one device and resume it later on another without any disruption or data loss.
- Personalization and upselling – Banks can leverage customer data collected during onboarding and subsequent digital interactions to personalize (and evolve) the user experience and offer targeted product recommendations. By drawing insights from data about customer preferences and needs, banks can be more forward-looking and proactive in suggesting additional offerings that align with the customer's financial and life goals.
- Onboarding support – Providing customer support throughout the digital onboarding process is crucial. Banks should ensure there are multiple options for customers to seek assistance, such as live chat or messaging (whether in-app or through platforms such as WhatsApp or Signal) or telephone hotlines, to manage and resolve issues that may arise during onboarding.
When correctly implemented, digital bank onboarding offers compelling benefits to customers in terms of speed, accessibility and convenience, while providing banks themselves with opportunities to reach new customer segments, offer a more personalized and curated range of products and services, reduce levels of fraud, and more generally enhance levels of customer engagement and – ultimately – loyalty and trust.
References:
1. https://www.businesswire.com/news/home/20221115005637/en/90-of-companies-lose-potential-customers-during-the-digital-onboarding-process-according-to-ABBYY-State-of-Intelligent-Automation-Report-Q4-2022
