Digital onboarding opens the possibility of attracting more clients, at less cost. Here’s how it works – and why it’s so important in banking
Digital onboarding is changing the game for banks’ customer acquisition, offering an easy new channel to access banking services for clients who are used to visiting physical branches. Today it is possible to ‘get close to’ a high-potential target, solely through digital channels.
The trend for digital transformation calls for banks to rethink not only their back-end processes, but also the way in which products are offered. The traditional model involves a large amount of documentation, time, branches, and staff to capture a client, who may just end up being a visitor. It’s a very large investment for uncertain results.
Digital onboarding allows customers to open a bank account in minutes, and critically, it allows banks to open the door to financial inclusion. Never before has opening a bank account been so practical and easy.
How Does Digital Onboarding Work?
Digital onboarding runs on agility. In the case of banking, institutions need to have robust tools that offer not only speed but also security guarantees for both the user and the financial institution.
This is where biometric verification comes into play. This technology can validate documentation, cross-checking it against official databases to accept it as a digital identity. All this happens in just a few minutes.
From here, stem many questions about data protection. Most importantly: how secure is this process of collecting personal information?
“The most fundamental aspect, and the key for digital onboarding, is that there is no identity theft,” explains Marcelo Fondacaro, COO of VeriTran. “For this, we must use all possible measures: white lists, black lists, connections to official systems, validation that the document is active, current and real, and that it is not forged.”
The security of the digital onboarding process is strengthened by banking sector regulations which require not only strong data validation measures, but also data protection systems in order to prevent money laundering, fraud, or other criminal activities.
As advances have been made to perfect biometrics systems, today so-called “passive” liveness tests also form part of this ecosystem. These tests bring together a series of identification formats to validate the user, including face recognition, voice recognition, and even patterns in the way someone uses their mobile phone. These additional passive tests add security to the process and create a more robust shield against fraud or cyber attack.
Digital onboarding: Everyone Wins, Especially Users
As part of a broader transformation trend, digital onboarding should be 100% focused on the user experience.
For the client, the greatest advantage of digital onboarding is that it cuts the time needed for banking and offers a practical, always-available solution. It is certainly much more attractive and advantageous than that of traditional banking, something that can be more personal, but also more complicated.
Although most demand for digital channels comes from millennials, these new digital offerings encourage a broad range of potential users, including new customers. For people at all stages of their lives, time is of the essence – digital onboarding is the perfect answer to that.
In Latin America, the acceptance of digital onboarding is increasing. The value generated by digital onboarding can be seen not just in an increase in the conversion rate, but also on the added value that these tools provide to users.
As banks move more and more of their operations to digital interfaces, digital onboarding should be one of the first steps.