The COVID-19 pandemic has contributed to a change in the way both businesses and customers interact with financial services providers. Over the last 18 months, in-person onboarding has not always been possible, and customers are increasingly looking for touchless or remote services – a seamlessly-digital onboarding process with the same security and guarantee.
For a growing number of customers, a slow, paper-based onboarding process is a deal-breaker. Financial services companies recognise the need to speed up and streamline their customer onboarding service, and many are moving towards a more digitised offering.
In this article, we explore some of the drivers and challenges for the future of customer onboarding, what the future may bring and what financial services companies can do to provide customers of the future with the best onboarding experience.
What are the drivers of future customer onboarding?
The traditional onboarding process is entirely paper and agent-based. While increasing numbers of companies use at least a partly automated system, customers may still have to provide information twice, carry out unnecessary steps in the process, or wait for third-party validation.
Additionally, financial services companies must abide by know your customer (KYC) and anti-money laundering (AML) regulations to reduce fraud and other white collar crime or risk huge fines. The age-old way of onboarding customers risks creating data silos and/or duplicating data as a result of customers having to provide the same information on multiple occasions.
There can also be friction in the backend operation where companies need to verify data from third parties such as banks, utility companies and tax offices.
Any delay, duplication or errors in the system increases costs for financial services companies and delays the time it takes to onboard a new customer, which in turn delays revenue.
What are some of the challenges?
Given the wealth of new financial products and services on offer for customers, the days of having ‘a bank for life’ are gone. If a company’s onboarding process frustrates a customer, they can and will go elsewhere. After all, technology makes it easier to switch to a new provider.
While financial services companies continue to meet customer exceptions, they also need to make sure they comply with regulations in jurisdictions where they offer their products. The pandemic led to a rise in online fraud – a 30% increase in the UK – and authorities around the world are strengthening regulations, including in Europe, the US and Australia. Any technology solutions will need to be flexible enough to meet changes in compliance and regulation requirements.
What benefits will the future bring for customer onboarding?
Increasing numbers of financial services companies are taking advantage of secure technology platforms to vastly reduce friction during onboarding processes.
For example, customers provide data, and this is securely stored on the platform, scanning ID documents for verification using biometric tests. They may carry out liveness tests to prove they exist ‘in the real world’, either using technology or with a remote customer service operator. This removes the need to undertake further verification checks.
Likewise, customers enter their stated details into online forms and the platform automatically checks details against verified databases, like utility records and voter lists.
During the onboarding process, customers can also create an e-signature, replacing the need to send forms in the post or via email. And once onboarded, customers can execute contracts from any device.
The best platforms have tools to make sure that workflow is properly managed, so processes stay on track and lead to greater efficiency and accuracy, and therefore improved compliance.
A technology platform reduces friction in the onboarding process, making it more secure, efficient and cost effective. Meanwhile, customers will benefit from more robust but streamlined due diligence checks. All of this should persuade the customer to stay with the provider and not compel them to browse around online for another.
With these processes in place, financial service companies can be sure they are satisfying KYC and AML requirements, reducing the risk of errors, and storing customer data securely.
The future of accelerated customer onboarding is here
A leading provider of secure technology platforms is ideally placed to keep clients up to date with the future of customer onboarding. It will be fully aware of emerging regulation, keenly developing products to create seamless, frictionless tailored customer journeys and be able to consult with you on how best to streamline the onboarding journey and delight your customers.
BONAFiDEE’s digital engagement platform includes a comprehensive range of biometric and record checks for verification of new customer’ identities in a safe, compliant and fully-evidenced way.
The process is always tied to a customer’s digital identity, satisfying KYC and AML regulations as well as a full audit trail throughout the process.
If you want to discover more about our advanced digital signature and customer verification solutions, download our guide, or contact our team.
