Mar 16, 2020
What is Digital Onboarding Process and how it affects financial industry
In this article we will try to explain the Digital Onboarding process, its meaning, types, operation and the benefits it presents compared to other onboarding methods.
After analyzing these aspects, we will be able to understand why digital onboarding process is crucial for business.
What is onboarding process?
Onboarding is the process of acquiring new customers, ensuring that they access all the services and products contracted in a simple and fast way, integrating into the company’s customer base.
The onboarding process is the official beginning of a direct and consensual relationship with a client, being the key moment in which it will be decided if the potential client becomes a current client of our company or abandons in this attempt. The client is registered in our company, providing data that allows its identification and accessing the contracted products and/or services.
Discover in this article all the details about the Know Your Customer (KYC) process.
- On-Site: It is the conventional onboarding method. The customer moves to the commercial office, branch or store of a company and must show his identity document as proof of identification.
- Semi-On-Site: Companies offer digital documents to their new customers to fill in the data at home, but still, they must move to the branch hand them in.
- Digital: Also called online or remote. The process is completely digitized and customers do not need to go to an office or store if they do not want to, being able to become a customer remotely with the same security and guarantee.
How does identification work in Digital Onboarding?
Digital identification is completely transforming the financial sector. Banks and financial institutions have understood the needs of today’s customers, transforming their processes to offer them an experience that they find comfortable and accessible, without friction and difficulty when registering to obtain products. Times have been optimized and costs reduced.
Digital identification is a 100% online and remote process. Customers do not need to move to acquire and access products and services: The remote opening of bank accounts with same guarantee and security as face-to-face methods is now possible with the new regulations and technological solutions developed by RegTech companies.
Find out here why opening a bank account is the clearest example in relation to digital bank onboarding.
Why is Digital Onboarding transforming business?
Companies in the financial sector have benefited from this revolutionary new technology and its legislative framework. First of all, this technology is easy to use by the user, making a tedious and complex process an immediate and fluid one. On the other hand, Video IDentification allows real-time verification, thanks to the implementation of artificial intelligence and machine learning by some software providers in KYC (Know Your Customer) processes.
These aspects have shown that companies using this technology for customer acquisition have exponentially increased their conversion rates thanks to the incorporation of digital onboarding. This new system also protects customers against fraud, as this technology complies with the strictest video identification security standards.
Digital onboarding advantages in the financial industry
The digital onboarding process is the key to increase the conversion rate and improve the user experience at the same time it meets the strictest regulation and drastically reduced costs, boosting productivity and eliminating barriers and waiting times.
Many companies, especially in the financial industry, lead the market having adopted AML5 Directive in its digital onboarding processes, accessing a new European market with 508 million potential customers.
For more information about AML5, download this whitepaper.
Data on digital onboarding
9 out of 10 banks with Video IDentification systems have implemented our technology, which has allowed them to increase their customer acquisition by 84%.
Traditional onboarding processes, which usually require about 3 weeks on average, is done in 3 minutes or fewer thanks to digital onboarding. Time savings for both employees and customers is substantial, reducing bureaucracy and avoiding losses of potential customers in the last stages of client-acquiring processes. All these components have allowed these companies to reduce their operating costs and increase their sales volume.
If you are interested in knowing how to make your onboarding and KYC processes go from 3 weeks to 3 minutes, download this guide.