In 2019, banks lost 78 percent of their customers to digital-first competitors such as non-banks and FinTechs. The pandemic has spurred digital channel adoption, with digital-only clients now accounting for 41% of all retail banking customers, up from 30% a year earlier. organizations must re-evaluate their current offers and processes in order to keep up with disruptive banking services and provide relatively frictionless banking experiences. Customer onboarding is the first and most important step in the customer-bank relationship. This is the customer’s first contact with the bank of their choice. The onboarding process determines how much faith clients will place in the bank in the future, not just for one product but for a range of different products and services.
Traditional On-boarding is Complicated
In traditional onboarding, the response to COVID-19 has exacerbated two key kinds of demerits. The first set is concerned with the customer’s experience. Traditional methods are sometimes slow, repetitious, and difficult to understand. Low delivery speed can result in a 40% dropout rate in mobile onboarding, and nearly 7 out of 10 millennials expect a fully integrated experience across all channels. As a result, rather than being a difference, smooth omnichannel consumer journeys are becoming the norm. The internal workflow of the company is impacted by the second set of demerits in the following ways. Because traditional onboarding involves several stakeholders, it takes a long time to complete. It results in sales teams spending less time on the field, poorer employee engagement, and a big percentage of the workforce performing repetitive duties. In today’s constrained corporate environment, it has the potential to stifle service delivery and expansion initiatives.
Digital Onboarding Makes Way for Financial Inclusion
According to the World Bank, approximately 1.7 billion people — roughly one-third of the global population — do not have access to official financial services. When asked why they don’t use financial services, people provide a variety of reasons: they don’t trust banks, it’s too far to travel, it’s too difficult to open an account, or they don’t have the appropriate papers. As a result, various financial inclusion programs, with a special focus on digital activities, are emerging to expand the number of ‘banked’ individuals. Using digital IDs to enable electronic KYC (e-KYC) and entirely digitize the onboarding process makes it a lot easier to open accounts and more cost-effective for financial service providers to reach out to underserved customers, particularly in rural and remote areas where opening a physical branch office is not economically viable. According to McKinsey, eKYC processes can lower onboarding expenses by up to 90%.
Advantages of Digital Onboarding
- Customer centricity: The only sustainable approach to grow a business and improve customer experience with simple and direct navigation is to keep the consumer at the center of attention. It entails not just the collection of data and the acceptance of an unavoidable administrative burden, but also a comprehension of the prospect’s requirements. The computerized workflow allows the procedure to be tailored to the needs and preferences of the consumers.
- Fast Onboarding: Bank onboarding is typically a high-friction cycle: go to the office, stand in unending lines, deal with messengers, and fill out laborious paperwork. What would normally take three weeks in a regular banking scenario can now be finished in three minutes. The digital onboarding of bank clients can register an individual with all of the necessary prerequisites and additional documentation that the bank may demand their needs at that time.
- Easy to use: The procedure itself, as well as the specifics involved, are simple to comprehend and implement. A shift from paper to data allows for improved rearrangement, autofill implementation to prevent asking the same questions, user-friendly and interactive information, and digital signatures, to name a few benefits. By engaging with the web interface or the banking app, anyone having an electronic device with Internet connectivity and an integrated camera can perform a digital onboarding procedure that avoids unnecessary rerouting to physical channels.
- Robust and real-time security: There are various built-in security procedures in digital onboarding to ensure that strict security is maintained. Real-time security precautions are also taken; the biometric pattern of the face certifies accurate online identity identification as well as the individual’s life existence.
- Enhanced productivity: Productivity is one of the most crucial benefits of digital onboarding. Data mistakes, internal handling effort, and time are all minimized with the help of system-guided data validation.
Make your customer’s eKYC experience easy breezy while steering clear from all the identity thefts!