What is digital onboarding?
Imagine you’re a twenty-something young adult. You’ve scored your first corporate job out of university, and you’re excited to start earning some real-world money. You decide to open a new bank account to store this newfound windfall.
As a digital native from a young age, you’ve come to expect ease and convenience when it comes to undertaking administrative tasks and opening new accounts. So, when your new employer asks you to attend their office in-person to photocopy your ID documents, and the bank asks you to visit a branch to verify your identity in order to open the account, you’re dismayed.
Attend in person? Visit a branch? Couldn’t this all be completed online? You’d be right to ask these questions – and businesses are cottoning on.
Digital onboarding refers to the process of leveraging online tools and software to get new customers seamlessly incorporated into a business. Due to the use of entirely online applications, the process can generally be completed anywhere, anytime, and on any device.
Onboarding customers digitally has recently seen immense growth in demand by customers and in implementation by businesses, as both customers and businesses appreciate the efficiencies that it brings to the new customer process. According to Future of Financial Services research conducted by Salesforce, 78% of banking customers are now initiating applications via a website or app.
Digital onboarding has become particularly prominent due to three important factors: (a) the proliferation of technological solutions to facilitate the necessary digital processes, (b) the onset of the pandemic which required an innovative way to onboard customers during a time when physical attendance was not possible, and (c) tech-savvy millennials and Gen Z beginning their foray into conducting administrative tasks and bringing their digital-first expectations to the experience.
Benefits of digital onboarding
As with most online and automated processes, digital onboarding brings many benefits to both the business and customer.
Reduced time and cost.
Digital onboarding creates efficiencies by introducing automation into the process. Workflows can be implemented to send account setup and identity verification steps to new customers for them to complete at their convenience, thereby minimising the need for customers to attend a store or office during working hours.
Onboarding new customers digitally also removes a significant timely and manual process from the workload of customer service representatives. This frees up their time to focus on value-add customer service tasks such as responding to complex enquiries or re-engaging lost customers.
- Increased consistency and reduced friction
Automated onboarding workflows create an environment where all customers have the same experience. It removes the variability of a customer service representative having an “off” day or a customer seeking to open an account on a particularly busy day in the store/office and having a negative experience as a result.
Providing digital solutions for customers also reduces the level of friction in the onboarding process, which helps to ensure efficient customer acquisition. Thales reports that 68% of people have abandoned a digital bank account application due to the amount of information required or time taken to complete their application. Digital onboarding helps businesses to avoid this, minimising the drop-out rate and facilitating a positive experience for customers.
- Tailored and flexible experiences
One goal that all businesses are moving toward is a seamless and tailored experience for customers. Customers are demanding the ability to complete processes in their own time and in a way that is flexible and remote.
This is not to say that customers don’t also want customer support when digital processes aren’t sufficient. They want support but they want it at a time and in a way that is suitable for them – they may prefer online resources, or they may need a call or visit to a customer service representative for more complex issues. The digitisation of the onboarding process allows customer service representatives to focus on providing this support rather than basic administrative functions that can easily be automated.
- Ongoing business operations
A final valuable benefit of digital onboarding is that it allows businesses to maintain ongoing business operations, even in difficult circumstances such as the pandemic. Instead of a delay or lapse of opening new accounts during weekends or other difficult times, customers can be onboarded anytime regardless of the inability to attend in store. Any necessary physical items can be sent via post and customers are equipped to open their accounts at their own convenience.
Digital onboarding in the wild – how does digital onboarding look in action?
Simple digital onboarding is widely implemented in e-commerce stores and SaaS products where new accounts require verification via single-click authorisation from a linked email account. This enables businesses to confirm they are dealing with a person rather than a bot.
However, more complex digital onboarding is necessary in certain sectors such as financial services and government. When applying for a new bank account or credit card, additional verification works as a benefit for both the business and customer to avoid fraudulent accounts and bad actors.
We have also recently seen increased regulation around Anti Money Laundering (AML), Know Your Customer (KYC), and Know Your Business (KYB) in most jurisdictions. It is therefore vital for banks and financial service businesses to conduct enhanced due diligence as part of their onboarding process to ensure they meet their compliance requirements.
This includes the verifying the identity of the applicant, and the ultimate beneficial owners (UBO) if the applicant is a business, checking the applicants past and real time ongoing monitoring to uncover any potential red flags in activity and behaviour.
How can AsiaVerify help?
AsiaVerify is a RegTech company providing instant verification services allowing users to streamline workflows for Know Your Business (KYB), Know Your Customer (KYC), Anti-Money Laundering (AML) and Ultimate Beneficial Owner (UBO) as well as addressing other compliance challenges.
AsiaVerify harnesses technology to provide instant data access and real-time translations of government sourced information from 11 key markets in Asia and ANZ.
If you’d like to speak to one of our multi-lingual regulatory experts or are just curious about what we do at AsiaVerify, learn more at our website.