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3 Reasons Why Digital Customer Onboarding is Essential?

Technology, combined with the ongoing global pandemic, has accelerated the digitisation of many processes around the world. This allows for easier communication, faster processing, less manual errors, all from the comfort and safety from our homes.

Banks, especially those who have started integration with fintech companies, benefit the most from automated processes, where things run smoothly, fast, and with hardly any errors. It allows for better customer service and a quicker turnaround time. The question then, is why are banks not looking at digital customer onboarding processes?

What is digital onboarding?

Firstly, let us look at what digital onboarding means and how it works, especially from the point of view of a bank. The onboarding process is the task of adding new members or customers to a service, which will then allow them access to the products and services that they applied for.

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In order for an onboarding process to work, personal data, such as identification documents and addresses, are required when reviewing a new customer. This allows banks to perform AML (anti money laundering) and KYC (know your customer) checks. These checks are to ensure that criminals are not entering any of the systems, which keeps the bank and other customers safe.

Now, thanks to technology, the digital onboarding process is simplified. Security is implemented and financial institutions are able to digitally onboard customers using cameras and other applications. This allows customers to easily onboard onto systems, without risk to the institution, and from the comfort of their own homes.

How does identification work with digital onboarding?

The questions many people have are how does identification work with digital onboarding and will fraud not be easy when doing onboarding digitally. The answer is no. With loads of security implemented to ensure the safety of the employees, users, and the institution, it is not easy to use a false identity to apply.

Financial institutions do thorough AML and KYC checks to ensure that they are onboarding the correct client, that clients are who they present themselves to be, and that they do not have a malicious background. Because of many other implemented security features, digital onboarding can be far more accurate when checks are being performed, and it speeds up the process – saving the institution and the client time.


Main reasons for digital onboarding

There are three main reasons why banks should make use of digital onboarding process:

1.   It avoids manual errors

When a person is in charge of manually capturing the data of each person, such as typing names, many errors can happen. Because of factors that are outside of the capturer’s control – such as being sleep deprived, or simply just hitting the wrong key on the keyboard – manually data entry can cause errors that slow down the process.

When errors are captured into systems, they have to be corrected. Moreover, sometimes they cannot be corrected. This causes the process to take longer than usual. When a person is in charge of entering their own personal data and the system automatically captures it, it automates the process and allows for fewer errors.

2.   Automates and speeds up the process

When someone is left with filling out multiple data sheets per day, a mistake is bound to happen. When the process is automated and the client is in charge of filling out their own data, the process is sped up and there are fewer errors.

Once a process has been automated, it allows for the institution to onboard more clients in a day.

The process is sped up through use of proper technology that automatically onboards clients without hassle. This ensures that clients are happier and that they can make use of the institution’s services far quicker than with a manual onboarding process.

3.   Better data protection

When a financial institution makes use of digital onboarding systems, it means that it needs to make use of cloud services to store its clients’ data. A cloud-based service for the storage of personal data is far more secure and efficient than having thousands of documents stored in a dark filing room.

In addition, better security can be implemented when institutions make use of cloud-based services. It also makes the tracking of personal data and documentation much easier because of possible search functionality tied to the cloud service. This makes the process easier, safer, and far more efficient. Clients and employees benefit from the use of cloud-based services and digital onboarding.

The use of digital onboarding should be considered by most, if not all, financial institutions. It allows for quicker and better service delivery, it creates a good customer experience, and it makes everyone’s lives easier. The questions should then be, why should banks not make use of digital services?

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