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What Is Digital Onboarding & How Is It Better Than Manual Onboarding?

It’s Time To Level Up!

Digitization is ruling the world! Technology has not just advanced but has leapt. Today, by just scanning documents through our phones, we are good to go! What’s more, is that digitization has allowed us to go paperless in one of the most tedious chores of our lives.

We couldn’t be happier ditching the long lines for paying the electricity bills and sweating our ways for hours together for opening one bank account. Thanks to digitalization, life has become so much easier and more time-saving!
Having said that, KYC verification and fraud checks still demand us to physically visit banks and get things done. But, what if we tell you that this could be done from the comfort of your home too? Well, it is possible now. Wondering how? Kudos to AI, it’s time to level up to digital onboarding.

What Is Digital Onboarding?

The ulterior goal of customer satisfaction has led to multiple innovations in the field of technology. In this race, financial and banking institutions are no less. So, what is digital onboarding?

Digital onboarding is a journey where the client starts their onboarding process with a bank or a financial institution. This ordeal is well-described as a relationship between an organization, its customer, and everything in between. The evaluation of the customer commences with their requirement, fulfilling legal aspects of the onboarding process, opening an accountant, and making it operational.

Before digital onboarding, customers needed to provide data either in person or through the mail, which would often turn out to be an expensive and time-consuming process. As every business continue to shift their operations online, there is a rise in the need for a secure and reliable digital onboarding solution even more now during this pandemic.

Financial institutions and businesses are benefiting immensely from this technology. The onboarding of customers into companies database helps the business to keep track of the customers more easily and also to maintain their services in an efficient, hassle-free, and convenient manner.

Why Is Digital Onboarding Better?

Time is money and it waits for none! There is a mountain of challenges experienced in the manual onboarding process such as the bombardment of information, lack of clarity and quality with insufficient time, planning, and resources. Result? Manual onboarding and our reality aren’t a match made in heaven.

To derail these challenges, financial institutions and banks are now opting for digital onboarding which is the future of customer onboarding.

With the advent of AI & ML, digital onboarding has taken a swift turn towards automation. It has helped save several paid hours, resources and has cut down costs making client onboarding easier, effective, and profitable. 

Having said that, digital onboarding will always have an edge over manual onboarding by providing

  • Enhanced user experience 
  • Cost reduction 
  • Validation of accurate evidence
  • Better customer experience and reduction in customer lead time
  • Streamlined process
  • Enhanced customer loyalty 

Research from PwC says that the customer onboarding process varies from country to country. So, if a client visits bank XYZ in Australia and America, the process of onboarding will differ. This is the case but thankfully digital onboarding has brought in a sense of uniformity which eliminates the variations of onboarding across the globe. This is the future of customer onboarding, have a look at what models will these processes utilize.

Artificial Intelligence

If there is something that is helping computers make more human-centric decisions, it’s AI. Companies like Paypal have put AI monitoring technology to its advantage by reducing fraud alerts by 50% which has resulted in huge profits. It has seen that HSBC has spent $2.3 bn in AI & digital innovation and moved into digital onboarding.

Blockchain

Now, banks can make use of DLT technology like blockchain for completing KYC procedures. This allows users to access and manage their identity with supreme security. This also eases out the load on financial and banking institutions by allowing them to manage data with absolute ease and efficiency.

Digital Identities 

Digital identities are a technology that throws out accurate data and helps to identify a person they claim to be. This entails a feeling of transparency, security, and credibility in the onboarding processes. One of the firsts to implement this technology are Singapore’s electronic identification & Trust service for electronic regulations since 2016.

Biometric 

When we talk about face ID, fingerprint, iris scanning & voice recognition, that’s all your biometrics. Many banks like Maybank & OCBC are already using this technology. There is a huge scope for this technology to become an industry standard in the future.

Data Collaboration 

In 2015, the ChartisRiskTech 100 research said that banks and financial institutions were looking for a technology that cuts down Anti-money laundering (AML) and anti-fraud systems into a single ecosystem. This will help them to find some insightful data for their client base.

What are Digital Solution Available?

Digital customer onboarding solutions end crude regulatory compliance financial regulations which include KYC, AML/CTF, FATC, CRS, Dodd-Frank, EMIR, and MiFID II. 

A product must contain certain qualifications to be included in a digital customer onboarding software category. They include;

  • They must comply with your customer regulations
  • They must provide a client interface phone boarding
  • They must allow users to orchestrate customer onboarding journeys
  • They must be designed primarily for use in financial services and include identity verification functionality

Looking at the various solutions available, let’s have a look at how they work.

Face Match & Electronic Identification: It is observed that 90% of the banks that have onboarded a video identification system technology have seen a rise in their customer acquisition by 84%. This procedure helps eliminate any fake ID and synthetic documents by invoking government ID checks in real-time.

Aadhar Verification & KYC: Right from Aadhar masking to Aadhar verification, digital onboarding has brought down the waiting time from 3 weeks to 3 hours! That’s the power of technology we are using today. We can now cost-effectively complete our KYC. With a two-step process in your mobile App, the KYC selfie check with image support of 50KB, your signature is verified and the document is made operational.

Fraud Checks: Digital onboarding has accustomed businesses to run an online fraud check of the details such as Face ID and location. Before any application is accepted, a thorough background check is run. Once all the requirements are met, the application is accepted.

Other Solutions: Amongst many other solutions offered by digital onboarding, Bank verification, PAN verification, PIVC, OCR auto application form filling, and geolocation checks are various onboarding processes that are being used to increase customer acquisition.

The key focus for the future for every business will be to enhance, improve and change the customer experience. The first impression is the last. To attract, retain and engage in returning customers, businesses should focus on improving customer experience and digital onboarding helps in achieving the same. With the cutting-edge technology of AI, ML & Blockchains, we will soon be able to shift to a parallel reality where businesses will are able to streamline a rich customer experience.

 

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