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Jul 12, 2021

Digital Onboarding: definition, characteristics and how it works

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Digital Onboarding: definition, characteristics and how it works

Digital onboarding represents the core process in which companies and organizations incorporate their customers and users in a fast, simple, secure and guaranteed way.

This essential part of the user-organization relationship is presented as the key moment for two fundamental aspects: The security of the company or organization to acquire as a client a legitimate user with the appropriate controls and the final decision of the potential client of to become a client.

What is onboarding process?

Onboarding is the process of acquiring or subscribing new users, ensuring that they have access to all the services and products that an organization can offer in a simple and fast way, integrating them into the database. 

The onboarding process is the official beginning of a direct and consensual relationship with an individual as a registered user or official client. This is a crucial step in which it will be decided whether the potential clients become a fomer client of our company or abandon in their attempt. Thus, the client will be registered in our company, providing data that allows its identification and access to the products and / or services contracted. 

Although the concept of onboarding is well known in the field of human resources and talent management, this term is widely used in any field in which an organization needs to incorporate a person into its structure, either as a client , as an employee or as a user.

This process, now digitized, can be done completely online and remotely from any device with a camera. Thanks to specific and exhaustive technical and security controls, companies in any sector, including those as sensitive as financial ones, can incorporate new customers and users from anywhere, at any time and through any channel with security and regulatory support. This is customer onboarding.

The customer onboarding process is also known as Know Your Customer (KYC) or Know Your Client. These terms, widely used in sectors such as banking, finance, insurance or related, are synonymous with digital onboarding, used in all industries and areas.

Thus, we know digital onboarding as that onboarding process carried out in an automated way and through a digital device.

For more information about the rules that set onboarding process standards, download this whitepaper.

Onboarding types

  • On-Site Onboarding: 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 Onboarding: 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 Onboarding: 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.

Discover in this article all the details about the Know Your Customer (KYC) process.

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.

Schedule an appointment here and access 508 million users thanks to the European standardization of customer onboarding.

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.

Data on digital onboarding

9 out of 10 banks with Video IDentification systems have implemented Electronic Identification digital onboarding 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.

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