Digital Onboarding Process
Digital onboarding is the online process of introducing and incorporating new users and customers to a company, organization or government institution, and for these users to gain access to certain services and products. This process can look different depending on the type of organization and what information they require, but in the end they all aim to collect enough information to make sure a new user is who they claim to be.
eKYC simplifies the onboarding process
Digital onboarding usually requires the new customer to provide personal information such as name, day of birth, address etc., and an ID to verify these data – say a picture of a driver’s license or passport, and some type of biometric information. This can for instance be a fingerprint or a face scan from a selfie or short video. It’s common to speak of this process in terms of Know Your Customer (KYC) and it’s mandatory by law for financial institutions to follow KYC regulations to be allowed to operate. This is because it’s a big part in working to prevent money laundering and other financial crimes.
The KYC process itself isn’t anything new but as more companies and government institutions digitize their business, they also need to digitize their KYC process. Earlier this would’ve required in-person meetings to sign a paper or for customers to verify themselves by their mere physical presence. Today it’s easy to use eKYC – digital onboarding made completely remote and paperless to save customers the time and hassle it would take to sign up to a service at a physical location.
For the financial industry however, there lies a huge challenge in making eKYC processes safe enough for providers to use, whilst simultaneously meeting the demands of their customers. For instance, online shopping and the number of digital transactions made daily keeps constantly increasing at an extremely high rate. Because of this, the pressure is high for online payment providers to have implemented well-functioning, user-friendly and efficient eKYC procedures that comply with government laws. The customers on the other hand are of course also looking for a safe shopping experience, but demand a quick and smooth verification process to not abandon a purchase.
Important to implement proper customer onboarding processes
Unfortunately, it’s not uncommon that companies experience a high number of customer abandonment due to poorly designed digital onboarding processes. Onboarding processes that tend to be too time consuming or simply too difficult to navigate can oftentimes cost a business their potential new customers. This can however be avoided by getting help from RegTech companies, who specialize in compliance management, to set up an onboarding process that simplifies the workflow of data checks, whilst still following government regulations.
Financial institutions do truly benefit from online customer onboarding as technology has turned a former tedious and bureaucratic process into a smooth and fluid one. Today, features such as video identification allow real-time verification to be independent of time and place restrictions. Making digital onboarding a quick and painless part of the customer identification process for both users and providers.
Institutions and other organizations also benefit from the fact that digital onboarding makes it easier to gather personal data, which in turn can be used to track customer behavior to better tailor products and services after customer needs. In other words, using proper eKYC processes is not only necessary, but a must for those who wish to build a strong and lasting relationship with their customers.
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