Making Great Customer Onboarding Experience

Even though we’re past the pandemic, its impact on digital experiences can’t be underestimated. It has changed how people access financial services. The digital revolution has increased the number of people who use a range of financial services across the globe.

It has significantly impacted how people send and receive money, borrow, and save. 

With a sudden shift in the way customers use the services, customer expectations have changed significantly as well. Compared to 10 years ago, Gen Z is now leading the Buy Now Pay Later industry.

These are the same consumers who are more than likely to see digital engagement as the industry standard and want a seamless customer onboarding experience for financial services.

What Consumers Expect from Customer Onboarding

According to a BAI report, “75% of millennials surveyed would switch banks for a better mobile experience.

Gen X on the other hand is looking to open more banking, saving, and loan accounts online. 

Salesforce also conducted a survey of what customers expect from financial services and found that 80% of customers consider user experience a part of the service that an institution provides. 

Around 30% of all customers abandon the onboarding process because it’s too long and complicated.

All the data points towards one thing. Financial institutions need to find a balance between seamless customer onboarding and simultaneously preventing fraud.

The best approach to providing great customer experience is to place identity at the center of customer experience. This can help brands build stronger relationships with customers based on trust.

Best Practices for Customer Onboarding

1. KYC in Financial Services

Know Your Customer is a series of checks every business has to do to verify a customer or entity’s identity. These KYC checks are done during customer onboarding and several moments during the customer lifecycle. 

Types of financial institutions that have to comply with KYC checks include:

  • Banking
  • Credit
  • Payments
  • Money Transfer
  • Cryptocurrency (Some jurisdictions).

Complying with regulations also helps in preventing financial crimes. It also helps businesses avoid many risks that come along with a failure to comply, including financial penalties, brand reputational damage, and more.

2. Building Trust and Reputation

Considering KYC checks and Identity checks as a service of your business makes good sense in this digital-first environment. 

To establish quality relationships with customers, businesses need to find the right balance between:

  • Personal identifiers
  • Identity documents
  • Behaviors and signals.

If a brand can successfully find the balance, it can instill greater confidence about its brand in a consumer’s mind right from the onboarding. 

For customers, well-designed KYC checks and ideal customer onboarding practices remove barriers and provide access to financial services. It has one more benefit as it removes the risk of fraudsters abusing the system.

3. Risk Assessment and Multi-Layered KYC Solutions

Taking a risk-based approach to KYC is a crucial part of ensuring customer onboarding meets the industry standards and prevents fraudsters from being able to access the service. 

A risk-based approach, including geography, finances, and other key demographics needs to be put in place.

Great customer onboarding solutions should have a built-in automated risk assessment. They show how much risk factors a customer has. The best KYC solutions for financial institutions are multi-layered, they combine risk management engines that search customer risk parameters.

4. Speed and Convenience Matter

Speed and convenience are as important as security when it comes to customer onboarding. Consumers don’t want to go through a customer experience that’s slow, clunky, and poor. 

To avoid customers abandoning the customer onboarding process, KYC in customer onboarding needs to be done in minutes. 

Quick KYC checks and good experience during customer onboarding help in building trust in a customer-business relationship.

5. Analyze and Adapt for Great Customer Onboarding

The best customer onboarding for financial services will aim to balance sign-up with compliance and risk management. To make the best customer onboarding solutions, businesses must provide analytics to improve the customer experience. 

Businesses need to know which OS, browsers, screen resolutions, and devices customers are using to sign up. Which part of the customer onboarding process is experiencing the highest number of drop-off rates? 

Businesses also need to focus on their customer onboarding conversion rate. How many prospects are automatically being accepted, rejected, or referred for review?

Identifying this data can create an improvement cycle that learns from mistakes, and continually evolves to enhance customer onboarding experience and conversion rates.

1. What are KYC, CDD, and EDD?

KYC is know your customer, it covers a number of activities such as identifying and verifying a customer’s identity. Customer Due Diligence (CDD) verifies the identity of a customer and also assigns a risk profile to the customer. 

If a customer has a high-risk level, they have to go through enhanced due diligence (EDD).

2. When should businesses do KYC checks?

At a minimum, KYC checks should be done when onboarding a new customer. Ideally, businesses should do KYC checks when there are any changes to a customer’s situation. 

The most robust KYC is an ongoing risk assessment, and it may be a requirement for EDD.

3. Who is responsible for doing KYC checks?

Any financial institution that is trying to onboard customers is responsible for doing KYC checks. This could be any activity, such as:

* Opening a bank account
* Getting a loan
* Real estate purchase, or more.

The customer has to go through KYC checks to be able to access services.


DIRO for a Faster Customer Onboarding Process

How you handle customer onboarding sets the tone for your partnership with the customer. Potential customers will drop the process if you have a clunky and slow onboarding process. This is why it is important for businesses to carefully build a robust customer onboarding process. It does more than offer a good customer experience, it helps in boosting revenue, security, and more.

Customers are a crucial part of any business, so it makes sense that their onboarding process should be as smooth as possible. If your customer doesn’t like the way you’re handling the onboarding process, they’ll soon lose interest in your product/service.

DIRO is an emerging business that aims to improve every single part of the customer onboarding process. With a range of use cases and services, DIRO can add speed, security, and efficiency to the customer onboarding process.

Why is the Customer Onboarding Process Important?

Before you understand how DIRO can streamline your customer onboarding process, you need to understand why the process is crucial.

Any business needs a steady number of customers coming in each month to survive. If they have a poor customer onboarding process, they’ll lose more than half of their potential customers.

Consumers of today want seamless experiences and fast results. If a customer has to wait for minutes just for a contact form to open up, they’ll abandon the process altogether.

So, to generate revenue, and boost the brand reputation, businesses need to build every part of the onboarding process carefully.

Build a Customer Onboarding Plan

It becomes easy to build an onboarding process when you know what the end goal is. While keeping this goal in mind, start developing a process in your mind. All your efforts should be dedicated to fulfilling that goal. 

In most cases, the goal is to onboard a new customer and get them to use your service. Businesses can build an effective customer onboarding process by breaking the process into smaller processes:

1. Choose a Demographic

This is a step that a lot of businesses skip, or overlook. Understanding this part is crucial for developing a customer onboarding plan. The truth is that not everyone wants your service, so there’s no point in casting a wide net.

You want customers who need your service. So, choose a demographic or a series of demographics where you want to promote your services. A demographic also means targeting the right age group.

2. Understand the Market

If you don’t have an understanding of your market, your business will never succeed. Understand the ups and downs of the market and then build customer onboarding strategies. Not every market is suitable for your product, and you should know it.

3. Give Value Proposition

Once your product/service is out in the market. You need to start sharing the value that the product is offering. You’ve already completed the toughest task if you can tell your customers why they should jump onto your product/service.

4. Communicate Well

After you’ve finally onboarded a customer, you need to keep in touch with them. Staying in touch with customers serves two purposes, the first one is providing feedback regarding the product, and the second one is providing ideal customer service.

5. Stay Relevant

The world of technologies is ever-changing, there are always some changes. So, as a business, you should always try to keep up with new technologies. Especially the ones that can enhance the customer experience. Staying relevant is a great way to onboard new customers and retain old ones.

How DIRO Makes Customer Onboarding Easier?

Although customer onboarding remains an ever-prevalent challenge for most businesses, it can be streamlined a little with the right technologies.

Currently, the biggest challenge companies face while onboarding customers is verifying documents. There are not too many ways to verify if documents presented by customers are legit or not. This becomes a major concern for businesses under the financial industry umbrella. 

So, DIRO helps businesses of all kinds in verifying online customer documents with global coverage. Verify bank accounts, proof of address documents, utility bills, KYC, and KYB documents, and others to streamline the onboarding process.

DIRO can verify over 9,000 document types instantly by verifying documents directly from the issuing source. DIRO can boost the overall customer experience by reducing the time taken in document verification during onboarding.

You can contact us today if you’re interested in learning how DIRO can help you make the customer onboarding process faster. Moreover, DIRO online document verification can reduce the risk of onboarding fraudsters. As DIRO eliminates the use of fake and stolen customer documents by 100%.


Customers Onboarding Under KYC & AML Requirements

Financial institutions have to comply with various AML, CFT, and KYC regulations while onboarding customers. Businesses operating in the financial industry have to provide a risk assessment to their new customers. The reason why these compliances are vital is to enable companies to identify the level of risk a customer poses to the business. They can then apply appropriate fraud prevention methods to mitigate the level of risk each customer possesses.

The AML regulation is made up of a variety of factors to fight against money laundering and terrorist financing in banking. Banks spend millions upon millions to develop measures that can help in fraud detection and prevention during the initial stages of customer onboarding. Financial institutions and banks that fail to comply with these regulations have to face huge fines imposed by regulatory bodies. One of the biggest examples of this is the $5 billion fine faced by Facebook for not having measures that protect customers against data breaches.

Relationship between Customer Onboarding and AML

AML (Anti-Money Laundering) regulation is set in place to ensure stability in the financial system and prevent financial crimes including money laundering, terrorist financing, and so on. The losses due to money laundering are equal to 2-5% of global GDP. Every year, a global bribe of almost $1 trillion is given. The money that is laundered helps the growth of illegal businesses such as drugs, human trafficking, and so on. Therefore, regulatory bodies ensure that AML compliance is followed strictly by companies during the onboarding process to prevent financial crimes.

Most financial crimes happen because of the financial institution’s inability to detect fraudsters in the early stages of onboarding. When financial institutions fail to prevent fraud, the financial stability of an economy is impacted. 

Regulatory bodies do their best to prevent financial crimes by setting down a strict set of rules and instructions. Companies are legally obligated to perform customer due diligence checks and KYC checks to assess the risk level. Companies that perform robust due diligence checks comply with KYC requirements.

KYC & AML Requirement for Customer Onboarding

Companies have the authority of building their own unique verification process for complying with KYC and AML regulations as long as it yields results. Businesses need to hire compliance officers to fulfill and conduct the liabilities of the companies during compliance. Identifying and verifying customer ID is the most critical part of the KYC process. If a company fails to build a proper customer and ID verification process during onboarding, it could lead to huge fines imposed by the regulatory bodies.

The next step involves the company investigating the customer’s history. Based on the previous transaction history, any previous suspicious transaction is investigated and a risk profile is created. Based on the profile created by financial institutions, businesses choose a transaction monitoring pattern for the customer. Having too many high-risk customers can be risky for a business as monitoring can take up a lot of time.

The risk assessment part of the compliance contains Customer Due Diligence procedures including checking sanction lists, PEP lists, and adverse media screenings. These lists are created by regulatory bodies and they contain high-risk customer profiles for companies. Companies should determine customer risks during customer onboarding and proceed accordingly. Some things that FIs should consider while determining the risk level are:

  • Whether the documents submitted are real or not?
  • Industry in which the customer works?
  • Sanction and Politically Exposed Person List Screening
  • Financial Transactions History

If the customer is identified as a high-risk customer, enhanced due diligence (EDD) methods are applied. If there aren’t any suspicious activities during this period, the customer’s account is opened. To ensure that no illegal activities happen, continuous monitoring is required. To comply with regulations, companies need to control the financial transactions of the customer and analyze them.

How Can Companies Improve their Customer Onboarding Process?

Banks, financial institutions, payment providers, and others that provide financial services have to comply with KYC and AML regulations. The guidelines that they have to follow are seemingly endless. Financial service providers, such as banks, should ensure that they uphold a good customer experience while performing strict checks. Using manual methods of verification to combat financial fraud is outdated and ineffective. With the rise of the latest FinTechs, companies can comply with regulations all the while providing the best possible customer experience.

DIRO’s online document verification software can assist businesses in verifying customer documents like proof of address documents, bank statements, Income tax return documents, and so on. Document verification is instantaneous with DIRO, and it also provides a stronger proof of authentication with each verified document.


Customer Onboarding Costs: Simple Steps to Reduce Expenses and Enhance the Process

Onboarding new customers have always been a challenge, be it a manual process or digital customer onboarding. Up until a few years ago, customer onboarding included standing in lines, slow manual document verification, and a waiting period ranging up to a few weeks. Fortunately, the pandemic took the standing in lines out of the equation. If not done properly, customer onboarding costs can go through the roof, and still, the customer experience won’t improve.

Signing up new customers should be a simple, fast and seamless process. However, most banks, financial institutions, and other businesses fail to provide a good customer experience. Every additional 5 minutes in a customer onboarding process increases the abandonment rate, thus increasing the customer acquisition costs.

By offering a seamless and positive customer experience, you’re showing your users that they’ve picked a brand that cares. However, creating a seamless, friction-proof customer onboarding process isn’t easy, here are the 5 ways you can avoid the increasing customer onboarding costs:

Steps to Reduce Customer Onboarding Costs

1. Speed up the Process

The primary reason for the increased rate of customer drop-off rate is the speed of the abandonment process. If your process takes days or weeks to confirm if a customer will be approved or rejected then you need to change the process. Most customers won’t wait that long and move towards a competitor that can provide a better experience. 

Businesses need to stay on top of the changes in industry regulations and perform the needed KYC and Due Diligence Checks while customer onboarding. However, relying on human resources to conduct KYC/AML and other checks while providing fast and accurate results are impossible. That’s where the integration of technology comes in.

2. Reduce the Number of False Positives & Negatives

Since industries of all kinds are forced towards digital transformation, fraud detection and prevention have become tougher. Fraudsters can easily create fake documents and identities that can pass as real persons. Too many false negatives mean that fraudsters are easily slipping past your defense mechanism and too many false positives mean that genuine customers are getting flagged as fraudsters and potential risk elements. The inability of reducing the number of false positives and negatives results in business loss.

Organizations need to find the fine line between fraud and friction. They need to pick fraud detection and prevention solutions that can effectively separate legit users and bad actors. According to a report, the eCommerce industry will experience false-positive losses of $443 Billion by the year 2022.

3. Update the ID Verification Methods

Traditional checks still hold some value, but outdated methods like checking credit history often result in good customers abandoning the process of being rejected by businesses. The majority of millennials don’t have CRA data and that’s one of the reasons why they are rejected. In countries where this type of data isn’t available or available with difficulty, an automated process of verification can make a lot of difference. 

By utilizing and analyzing other data sources, businesses can easily enhance their ID verification process while still providing a secure and fast onboarding experience.

4. Automation is Necessary

Technology has penetrated every aspect of our lives, and excluding it from basic business operations will only increase customer onboarding costs. Relying on manual processes is costly, ineffective, onerous, and prone to human error. Customers are unable to track their application status and there are thousands of other things that can go wrong with manual processes. 

Banks that have automated their manual processes have achieved a 32% reduction in lost documents, and have reduced the processing time by almost 60%. Automation also helped banks in reducing their storage, handling, and transportation costs by more than 35%. 

Needless to say, automated customer onboarding is faster, more accurate, and more efficient.

5. Mobile Friendliness For Better Experience

Allowing onboarding through mobile devices makes the process more accurate, and fast. The mobile onboarding process also comes with its own set of challenges, the inability of conquering these barriers can also lead to an increased drop-out rate.

 According to several studies, more than 50% of Millennials will abandon the application process if they are unable to complete it on their smartphones. That’s the reason why mobile-friendly services have a more competitive edge across industries.

How does DIRO Help?

To reduce and avoid the increased customer onboarding costs, banks and financial institutions need the help of a tool that makes their process smooth. 

With DIRO’s online document verification software, onboarding customers is easier than ever. Document verification is instantaneous with DIRO with a stronger proof of verification. DIRO’s online document verification tool can verify over 7000 document types from all over the globe by cross-referencing document data from original web sources. This results in 100% elimination of the use of forged and stolen documents during the onboarding process. By integrating DIRO’s online document verification technology in the customer onboarding workflow, firms can cut down on both time and costs while providing a secure and good customer experience.


Importance of Client Onboarding: 5 Reasons for a Smooth and Seamless Onboarding

The client onboarding process is the first step in a customer-business relationship, so businesses need to make sure that the first impression is the best one. The moment a prospect becomes a client, a smooth and seamless customer onboarding process is crucial.

Unfortunately, complying with KYC and AML regulations has made this customer onboarding process incredibly tough and challenging for businesses. Since their first introduction in the 1970s, the total amount of laws and directives has increased significantly with annual updates. The regulatory bodies have been raising the bar for compliance, thus making the client onboarding process incredibly tough.

Under these circumstances, it’s more than important to onboard clients simply and seamlessly. Current onboarding practices, however, are often cumbersome, time-consuming, tedious, and frustrating. That’s why the importance of customer onboarding is growing which enhances customer experience.

In this article, we’ve mapped out why a business needs a simple and smooth client onboarding process and its benefits.

What Is a Good Client Onboarding Process?

One client onboarding survey found that banks themselves consider their onboarding process inefficient for the customers. Some banks and financial institutions even stated that they still rely on a paper-based customer onboarding process.

As customers are becoming technology-friendly, this process needs to be changed. Therefore, businesses need to understand the basic attributes that make for a “good” client onboarding process. 

There are a couple of things that make for a good client onboarding process.

  • Simple Process
  • Smooth Process
  • Seamless Process

A user-friendly process should be a priority while building a customer onboarding process. The ideal customer verification process sets the tone for a robust and long-lasting client relationship.

The client onboarding process should also comply with all the KYC and AML regulations. These regulations are also used to support risk assessment, it includes a long list such as Anti-Money Laundering (AML) practices, and Know Your Customer requirements. In an ideal customer onboarding process, compliance shouldn’t slow down the customer onboarding process. 

A good customer onboarding process should be fast and with a quick response time. An average customer onboarding process often takes 2-3 weeks. This needs to be changed, and the client onboarding process needs to be replaced with the online customer onboarding process. This can be achieved by leveraging technologies such as online KYC verification software, online AML verification software, or online customer document verification process.

What’s The Importance of a Good Customer Onboarding Process?

There are 5 biggest reasons why businesses should have a seamless client onboarding process:

1. Demonstrate Own Value

First of all, the implementation of a smooth and simple client onboarding process allows for a company to build healthy and loyal customer relationships early on. A good customer onboarding experience goes a long way and it stays with the customers during their relationship. First impressions of these onboarding processes count, and missed opportunities to demonstrate your company’s value.

2. Exceed Client Expectations

This is a huge reason for building great customer onboarding experiences. The customer experience can be significantly improved by implementing a simple, smooth, and seamless client onboarding. Companies can make this happen by introducing a user-friendly process for onboarding. Customers are accustomed to tiresome and tedious processes and they can be pleasantly surprised when they experience a smooth operation.

3. Increase Efficiency & Revenue

This is another reason for banks and financial institutions to build an ideal customer onboarding process. Financial services companies should focus on enhancing their process as much as possible and make that visible for the client onboarding process. The drive for efficiency should enhance the customer experience. 

4. Customer Satisfaction

If a business fails to build an impressive customer onboarding process, it’ll end up losing customers to businesses that offer better processes. There’s no business that wants to lose customers instead of acquiring them. A good customer onboarding process will bind your clients to your company. 

5. Improve Regulatory Compliance

The final reason for building a smooth customer onboarding process should make sure that all parties comply with all the rules and regulations. This part isn’t actually easy. However, a smooth and simple client onboarding process with proper AML and KYC compliance can happen by leveraging technologies.

Benefits of Client Onboarding Process

The benefits of a good client onboarding process include a variety of considerations, such as:

1. Increase Efficiency

  • Boost customer onboarding time by eliminating unnecessary touchpoints.
  • Always stay compliant with the right set of requirements.
  • Reduce costs by increasing efficiency

2. Enhance Business Potential

  • Increase the scalability of business by understanding requirements across major jurisdictions.
  • Minimize risks and misconduct by understanding the regulations.

3. Try to Boost Client Satisfaction

  • A simple, smooth, and fast customer onboarding process is equivalent to limited interactions, which leads to increased customer satisfaction.
  • Increases the reputation of the business by adding real value based on great customer experiences.

Best Practices for Keeping Millennials Hooked to Account Onboarding

Banking has gone digital, and when was the last time you went to a physical bank? Traditional brick-and-mortar banking is slowly becoming obsolete, over the last six months, 40% of Americans haven’t stepped foot in a traditional bank. Most generations are in the favor of digital banking as it saves time and offers all the features of traditional banking. Millennials are taking the lead when it comes to using online banking, 47% of all millennials are relying on digital banking instead of traditional banking services. Millennials are more apt to adopt mobile banking, but they’re also the most likely ones to walk away if they don’t like the services. Almost 93% of all millennials abandon the customer onboarding process whenever they run into any trouble. 

Financial institutions have a huge opportunity to win all millennial customers by offering seamless mobile account opening, or digital account onboarding. Customers aren’t willing to sit through the cumbersome digital customer onboarding process. 

Identity verification is a vital process in the customer onboarding process and more than often the step where countless potential customers abandon the process because of the time and effort it requires. ID verification is important because that’s the step that will help banks determine which online customers are legit and which ones are fraudsters. By enhancing the number of fraudulent checks, banks can increase the chances of reducing the risk of fraud, this additional due diligence steps can also increase the level of friction during customer onboarding leading to an increased rate of abandonment. 

According to a report by IBM, more than 75% of all millennials have no problem in leveraging biometric authentication for digital onboarding. This signifies that traditional ID verification methods like Knowledge-Based questions and Multi-Factor Authentication will no longer be relevant. Millennials are more than comfortable with mobile-based ID verification methods that are needed to prevent fraud. 

So how is it possible for financial institutions to find a balance between tackling fraud and ensuring that new customers have a seamless experience while opening a new account? By working with a perfect online ID verification solution, you can make the customer onboarding process as smooth as possible.

Best Practices to Provide a Seamless Customer Onboarding Experience

1. Speed Up the Process

The biggest reason behind abandoned customer onboarding applications for banks is because the processes take way too long. Traditional customer onboarding methods are used to take up to 3-5 weeks. Millennials don’t have the time or the attention span to wait this long. For banks to keep millennials engaged in the onboarding process, it’s essential to quickly and correctly verify users within the mobile experience in minutes.

2. Better User Experience

User experience is a major part of customer experience and is mindful of the number of screens in use. Banks can utilize on-device data extraction to pre-populate forms during the ID verification process, thus reducing the amount of information a customer has to add manually. Create a custom journey for users by providing different colors and themes to the screens and sections. Make sure that you take care of the needs of every customer by adding multiple functionalities. 

3. Provide Clear Instructions

Not every user is tech-savvy, so banks should focus on making the process as clear as possible. There should be clear language on each screen so that every step is explained easily to the user. Provide clear instructions in simple English. It’s vital to clearly explain why banks require a picture of the ID document and the selfie and what they’re willing to do with the information. 

4. Instant Feedback is the Key

Users want to know their application status in real-time. If there are any issues with the ID document or photo submitted, then users would want to get that feedback in real-time too. Providing instant feedback allows users to understand how long it’ll take for their application to be completed. 

5. Omnichannel Support

For companies that want to capture as many users as possible, it makes sense to ensure that you provide Omnichannel support for potential customers. For example, a variety of ID verification solutions support smartphone image capture and exclude other channels such as desktop webcams. By doing so, banks are leaving out customers that are more comfortable on their desktops and laptops. 

Bank Onboarding

Future of Digital Onboarding, Security and Open Banking

Open banking is perfect for changing the environment of the API economy. For the finance and banking industries, as well as payments, insurance, and marketing, open banking offers a whole new scenario in the digital economy. Open banking can offer innovation, disrupt the traditional banking market and greater efficiency inspires optimism, but still, there are some challenges. Educating customers about new opportunities created by open banking will soon become a priority.

Open banking has all the capabilities of the future, but FinTech companies and their partners have to work hard to see open banking become a mainstream service. Customer onboarding, data privacy, and security of services are the three primary elements that’ll allow open banking to continue changing the world.

Current Situation of Open Banking 

Open banking means that banks have to allow FinTech companies access to individual customer accounts and transaction details when the customer requests it. With this, it is easy to reduce friction, increase customer choice, and improve competition. 

Various use cases are ranging from easier small business lending to new payment options like cryptocurrency to better savings accounts. In the UK, the payment service directive, or PSD2 has jump-started the success of the sector. Similar businesses are working around the world, with countries like Japan, Singapore, and Australia focusing heavily on Open Banking initiatives.

Given that the service is relatively new, countries like the U.S are hesitant in passing the laws that make the service mainstream. The biggest innovation in the space of Open Banking hasn’t happened yet. Open Banking hosts several features but it is new and the lack of education around it makes it suspicious in the eye of customers and businesses. 

The suspicion around open banking is deserved. If you’re giving them access to your bank account to a third party, it is imperative that you trust the entity completely. How is it possible to guarantee security all the while ensuring open banking remains untouched by a regulatory body?

Winning Consumer Trust in Open Banking?

FinTech companies in an open banking environment have to ensure security to potential customers. Open Banking companies will also have to show an original and innovative side while demonstrating that they offer secure data management. For a majority of companies, winning consumer trust will be the biggest challenge. 

But how can FinTech combine innovation with security? In simple words, open banking businesses should follow the lead of traditional banking businesses. Over time, traditional banking has built a huge amount of customer trust by focusing on security and privacy by performing rigorous due diligence. 

Customers must be aware of what steps their financial service providers are taking to keep their data and funds safe. Privacy and security aren’t about following Know Your Customer (KYC) and Anti-Money Laundering regulations. Banks and financial services have to be able to provide the best security and privacy to the people they are offering their services.

Centralization of Identity

Verifying customer identities has always been the core of financial services. It is almost impossible to open a bank account without getting their identity verified. Unfortunately, a majority of the world keeps operating with analog tools in an evolving digital environment. Driver’s licenses or passports were mainly intended to be used for in-person verification and not online verification. So proving the identities of people during the account opening process remains a huge challenge. Another big challenge is that more than 1 billion people globally don’t even have an identification document. These people can’t travel, take part in commerce and receive medical care or government benefits at all without identity documents. 

Things that were industry standard yesterday aren’t the industry standard today. Things are always evolving, banks and financial institutions constantly need new tools to verify customer identity. In some cases, simple verification is more than enough. Other situations require robust identity authentication checks. Numerous circumstances have different circumstances, but the need for digital ID verification will only grow as time passes. 

Future of Digital ID Verification

New technologies and services can enhance the identity verification process and remove friction from the customer onboarding process. The benefits of technologies and services are extraordinary for both customers and firms. 

The customer has to go through a frictionless process, the business on the other hand enhances the ID verification process and reduces the risk of fraud. While opening a brand new account, each customer has to go through a series of steps that takes care of risk and user experience.

The Decade of Open Banking

According to industry experts, the 2020s will be the decade of open banking. Open banking gives birth to new ideas, provides consumers greater and more control of their financial lives, and it also creates new opportunities for small and medium-sized businesses.

However, there are a variety of challenges to overcome to make open banking a mainstream service. They will have to work a lot to enter the market while educating the public about how they maintain the security of the data.

Bank General Onboarding

Customer Onboarding: Providing Seamless KYC and User Experiences

As a business, you’ve built your marketing campaigns and you have interested buyers ready but your customer onboarding process isn’t up to the mark and it’s hard for your business to acquire new customers. The customer onboarding process needs to be efficient and seamless. Whatever the reason, you won’t be able to grow your business without having a proper customer onboarding process.

According to reports, before the Covid-19 pandemic customer account opening process was the make or breakpoint in the relationship for a customer with a brand. That situation is even worse when firms were forced to shift to online methods.

The online sign-up process may seem simple at first, but the choices that a business makes regarding the customer onboarding process make the shape of the process. Finding and implementing ideal technological solutions are often the difference between success and failure. 

Providing a seamless onboarding process to the customer increases confidence and trust while building a great brand reputation. 

Customer Onboarding and KYC

For various organizations, performing Know Your Customer is a vital step in customer onboarding. While KYC isn’t a legal requirement for every business, it still helps in preventing fraud and verifying customer identities. A business should be aware of whom they are doing business with and what kind of risk they pose to the business. 

Sadly, if not carefully considered and optimized, KYC can lead to an onboarding experience that’s slow and tedious. An imperfect process often results in an increased customer drop-off rate. 73% of all customers have stated that the increase in intolerant poor experiences will force them to switch to another business with a better onboarding process. 

So what can an organization do that balances the need for security and speed while onboarding customers. The first thing to do is to use a risk-based approach, different customers have different needs. So being able to handle new clients the same way isn’t ideal. Understanding the different risk levels customers pose and adapting the onboarding requirements to fit specific scenarios offer better results. 

Document verification technologies can be used to verify customers. Verifying ID documents offers a certain level of secure ID verification for businesses.

You need to consider which technologies make sense when onboarding customers in specific situations. Having various options to verify customers and optimizing the workflows to meet the needs of the customers is the best way to enhance the customer onboarding process. Using deep data analysis, ID verification technologies, online document verification tools, and manual verification intelligence can lead to maximum conversion rates and enhanced ROI. 

Improving Customer Experience during Onboarding

Even the smallest of steps count while eliminating friction from the customer onboarding experience. Some common measures to improve the customer onboarding experience include:

1. Minimizing Data Collection

Most customers aren’t too comfortable with sharing their personal information with businesses. Banks, financial institutions, and other businesses need to carefully consider which information they need from the customers. The more information you ask from the customers, the fewer chances are a customer to stick around. Businesses also have to consider the complex set of data privacy laws, the more data they collect, the more risk they face of going through a data breach. Also, managing huge amounts of data isn’t cheap. 

Ask for the really necessary information. Firms can survive without asking for non-essential data from onboarding customers. 

2. Reducing Onboarding Time

 According to a survey, banks in the USA take up to 2 weeks to successfully onboard a new customer. To reduce the onboarding time and eliminate friction from the process, go through the onboarding process. Ask various members of your team to go through the process to figure out the major problem points. For most banks and financial institutions, this step can reduce the drop-off rate incredibly.

3. Measuring Benchmarks

It’s just not enough to go through the onboarding process once and forget about it. As a business, you should track the performance of the onboarding process. Measuring the success and failure points of your customer onboarding process can help your business get better success. Keep an eye out for metrics such as form abandonment and conversion rates. 

You should also monitor the backend process to reduce false positives and the rate of fraud. Analyze how effective your customer verification process is.

4. Optimizing Experience for Different Markets

Businesses need to understand the market in which they operate. Having an insight into the target market can help in optimizing a customer onboarding process based on customer behavior and industry trends. Different audiences have unique expectations from an onboarding process. Even something as small as asking for additional information can lead to instant customer drop-off. 

5. Providing a Safe and Secure Process

More than 70% of all customers consider security as the most crucial part of any account opening process. With the growing rate of fraud across industries, customers are wary of opening new accounts online. To ensure a customer has the best onboarding experience, brands have to establish a certain degree of trust in the process. 

Organizations need to offer the right trust signals and should have robust technologies set in place to detect and prevent suspicious activities early on. 

How does DIRO Assist in Customer Onboarding Experience Enhancement?

Manually onboarding customers is time-consuming, ineffective, and incredibly tough because of the pandemic. Businesses need to go digital and provide a smooth, frictionless onboarding experience to customers. 

With the integration of technologies in manual workflow, organizations can streamline and strengthen the overall process. DIRO’s online document verification software provides instantaneous document verification. With DIRO online document verification tool, businesses can verify customers from all over the world as it verifies 7000+ document types.

DIRO cross-verifies document data from the original web source, thus eliminating the use of fake and forged documents by 100%. It also provides 100% proof of authentication backed up by verifiable credentials. By using DIRO online document verification software, firms can add an element of security and speed to their customer onboarding process.


Steps to Improve Customer Onboarding Experience During Sign Up

Since the pandemic, our lives have switched online. Online work, online classes, online lectures and seminars and even visiting the doctor online. The way online technology has evolved and changed our lives, there’s no going back to the old and traditional methods. The proper digital onboarding process can improve customer onboarding experience.

In many situations, companies have to verify if the people are who they claim to be. But this has reduced the overall customer onboarding experience. There are other elements that reduce the customer experience are “Two-Factor Authentication, One-Time Passwords, Text Codes, Email Codes, and Time-Sensitive Codes”. None of these elements offer a great customer experience. However, firms need to verify their customers, recognizing customers in the initial step of the business relationship is always a good thing. 

According to a recent report, 57% of users claimed that ‘ease of accessing their accounts’ is more important than “understanding customer interests”.

Customer Experience and Identity Verification

When you verify customer identities, you need to understand that verification is the initial step of the business relationship. Most of the time, proving customer identities isn’t the sole purpose of a customer. Rather, it’s an obligation that they have to follow to finally access the services. Customers can access services like sending money online, book an appointment, or online financial services. 

So instead of creating an extra burden on the customers, you can focus on how you can make the verification process better, for both you and the customers. Firms can follow some steps to keep the security intact all the while improving the customer experience.

Steps to Improve Customer Onboarding Experience

1. Fewer Clicks Doesn’t Mean Better User Experience

Onboarding is an important part of the overall customer experience. The main goal is to keep the people engaged, improve the conversion rate and reduce the drop-off rate. Adding ID verification to the customer onboarding adds a new step and to reduce friction it can be tempting to shorten the process by reducing the number of clicks. 

But identity verification is a huge step, and it’s crucial that people understand why they have to go through the process. To also ensure that process is explained clearly, you need to offer guidance so that people just have to do it once. 

So instead of reducing the number of clicks, your aim should be a focus on being as helpful as possible. Explain to the customers the why and the how of the ID verification. Having a small and to-the-point guide can help you increase the customer onboarding experience. 

2. Get Smart About Waiting Times

It’s vital for businesses to quickly complete the verification process. Having to wait even 5 seconds can feel like hours when you’re in front of a screen. In a world that’s going fully digital, customers hate to wait for long periods. Your customers need to know how much they’ve progressed in the process.

Provide your customers with something to do, so they’re actively waiting, such as allowing customers to explore the app or to do something while the process goes on in the background. And if that’s not possible, let them know how much time it’ll take for the process to get completed. 

3. Get Users at the Right Time

In some specific industries such as financial services, the ID verification process is required by law. Businesses have to fulfill KYC regulations and take important steps to verify customer data. Although, adding identity verification in the framework can make all the difference in the world. 

The ID verification process needs to be in the right part of the whole onboarding process. 

4. Sometimes, Friction Can be Good

While identity verification creates an additional step in your flow, and usually people say that additional steps create friction. But friction sometimes has some benefits. You can add a biometric verification process that does add a new step yet verifies customer data quickly, securely, and efficiently. Businesses just need to use the friction to their advantage.

5. Customer ID Verification Adds Value

This step applies to industries where the user won’t initially expect to do identity verification. Industries like retail, sharing marketplaces, and gaming don’t usually rely on identity verification. But sometimes additional steps increase trust and brand value. Although, you’d have to let your customers know why and how it benefits them. 

Features like “Autofill data” are simple and they improve the customer onboarding experience. For biometric verification, they can just click a photo of themselves. One of the biggest advantages of the customer verification process is that they can use their biometrics to access their accounts if the customers are locked out. 

6. Don’t Forget About Things that Can Go Wrong

Things can go wrong all the time with customers while trying to sign up for new services. What do you think happens to the customers who aren’t able to go through the sign-up process, or those who fail the ID verification check?

Fortunately, this happens to just a small number of customers. However, that often means the experience for these customers is deprioritized. People who are locked out of their accounts and can’t access online services have to:

  • Going to the ATM for getting money withdrawn
  • Withdraw a random amount of money
  • Then deposit the money to the bank
  • Get in touch with the bank by getting through exhausting customer services

This multi-level process is an experienced killer. Businesses only want people to go through our ID verification flow just once. If customers fail to do the customer verification check, businesses need to check why that happens?

7. Common Process for Everyone

Conclusively, every type of customer should have access to the products and services they want. That’s why it is important to make ID verification accessible to every kind of customer. 

The purpose of designing is to improve the usability and usefulness of digital services. Products that are designed with general accessibility in mind are extremely beneficial for everyone. Plus, making sure all kinds of customers can access your services is a great incentive for building the services.


How Ideal Digital Customer Onboarding Can Lend a Helping Hand In Reducing Fraud?

In the last year itself, the FTC (Federal Trade Commission) received over 2 million fraud reports, which led to losses of over $3.3 Billion. Fraudsters can run a scam to trick the onboarding process and by exploiting the identity verification program. Businesses, banks, and FIs need to employ the best risk management program to detect and eliminate fraud early on. 

An essential part of any risk management program of any organization is a perfect onboarding program that verifies the identities of people from the first step. Verifying identities using strong online document verification solutions is something organizations need to have.

Preventing Fraud Risk with ID & Business Verification

Identity theft is currently one of the most common types of fraud and growing technologies may keep assisting the growth of ID theft. The sudden increase in ID theft cases is because of sudden data breaches in recent years. These data breaches have provided the fraudsters with enough access to data that they can use to assume the identities of someone else. 

Using online document verification solutions like DIRO and employing organization-wide KYC compliance that can help prevent fraudsters from entering the inner operations of your system. The ID verification process usually helps in identifying the red flags in the early stages of customer-business relationships. 

Verification methods that can verify customer documents instantly and distinguish between authentic and doctored documents can reduce the pace of fraud. Countless methods can be used and data can be cross-referenced to verify customer identity.

Types of Online Fraud

As a business, you need to understand the techniques used by fraudsters that will help you protect your business. Some of the most common types of online fraud you need to consider to build your anti-fraud management program are:

  1. Synthetic Identity Fraud

Synthetic Identity Fraud is one of the most common types of ID fraud, where real information is stolen from someone else and fake information is blended to create a synthetic identity. Usually, all the real information used to create a synthetic identity is stolen. Synthetic identity fraud makes up 80% of all identity fraud. Being able to spot fake identities is the best way to defend your business against fraud. You need to reduce fraud all the while making sure the customer experience stays intact. 

SIF is designed to go around conventional methods of ID verification. The increased number of data breaches over time has made things worse for both organizations and customers.

  1. Account Origination and Takeover Fraud

Account origination fraud and account takeover fraud are other two types of identity theft that happen whenever a person gains access to an individual’s account. They can use this access to make fraudulent transactions or use their personal information to create fake accounts at different places.

ATO is much more complicated to identify as fraudsters are using legit credentials to access the accounts. Companies can lose millions of dollars by not prioritizing a solution for reducing fraud or identifying ATO in the initial steps.

  1. Card-not-present and Chargeback Fraud

Card-not-Present or CNP fraud is a general term for fraudulent transactions where a cardholder doesn’t present a card in person at the time of purchase. CNP usually occurs through mobile payments or online, which makes it tougher to prevent and detect fraud.

Chargebacks are a type of CNP fraud that happens when someone orders products or services and requests a chargeback from the bank instead of the merchant. To reduce this type of fraud, implementing an enterprise-wide strategic program is the best bet.

What is a Fraud Risk Management Program?

A fraud risk management program gives your business a foundation for identifying, analyzing, preventing, and mitigating fraudulent activities. Preventing fraud is a lot bigger than protecting revenues, it also minimizes the harm fraud does to a brand’s reputation.

One of the main reasons for fraud risk management offers a positive impact on decreasing the pace of fraud and losses incurred on fraud. Conducting risk analysis offers a greater understanding of the weaknesses of the businesses which can lead to an improved risk management program.

Digital Customer Onboarding with Ideal Technology

Online customer onboarding methods are one of the preferred target areas of fraudsters. Weak customer onboarding methods tend to cause a lot of harm for customers as their information can be used for a variety of fraudulent activities.

Organizations need to build fraud risk management programs that can support online customer onboarding methods. Technological solutions that provide online verification of Identity and documents are needed to mitigate fraud. 

DIRO’s Online Document Verification Solution for Fraud Management

None of the strategies a business can build will help in reducing fraud if there’s no technology to support your business’s needs. Customer onboarding can be made secure and faster with DIRO’s online document verification API.

DIRO can offer instant document verification for customer ID verification which reduces fraud and improves fraud detection and prevention. DIRO’s technology can capture data right from the original web source. It prevents the use of flake and stolen documents, with 100% verification of original data.