Digital Onboarding - A must have for banks
According to industry studies, more than half of consumers fail to finish their onboarding process for a number of reasons. The amount of information required, as well as the time commitment, form complexity, and trust in communication channels, all have a negative impact on the customer acquisition flow – so much so that more than 64% of banks have experienced a revenue loss due to issues with their current onboarding processes, which can end up crippling an organization when the cost of acquiring a customer is over 20 times higher than the cost of retaining them. If the process is too complex, customers are 70% more likely to seek an alternate digital experience that matches their expectations.
Need for Digital Onboarding?
How you communicate with and onboard a client, how you digitally confirm the client's identification, and how you make the process seamless and adaptable are all critical components of navigating the digital onboarding world. Many reasons have contributed to banks' need to provide digital onboarding processes to new customers and clients in recent years. As a result, banks have been forced to build software and systems that can efficiently collect data while adhering to strict rules. New clients are expecting digital onboarding from banks since it can drastically shorten the time it takes to complete the onboarding process. As a result, financial institutions must embrace platforms and digital transformation services that enable digital onboarding.
Digital Onboarding Makes Banking More Accessible
According to the World Bank , 1.7 billion people — almost one-third of the world's population — lack access to legitimate financial services. People give a number of reasons for not using financial services when asked why: they don't trust banks, it's too far to travel, it's too complicated to open an account, or they don't have the necessary documents. As a result, a variety of financial inclusion programs are emerging, with a particular focus on digital activities, in order to increase the number of people who are "banked." Using digital IDs to enable electronic KYC (e-KYC) and completely digitize the onboarding process makes it much easier and more cost-effective for financial service providers to approach underserved customers, especially in rural and remote areas where building a physical branch office is not economically feasible.
Digital onboarding defines future customer relationships
Getting new clients is neither simple nor inexpensive. Banks must discover new ways to reach out to customers, entice them in, and sell them new products and services. Customer onboarding establishes the tone for the rest of a bank's relationship with its customers. It's critical to get this "first journey" right in order to avoid squandering a significant amount of money on customer acquisition. Many people around the world have turned to working from home, and many now want to bank from home as well. They could be spending some of their time in lockdown to reassess their financial arrangements and check out new providers. Those who decide it's time to switch to a bank with a more appealing digital offer should be able to do so in a simple, secure, and stress-free manner. Customers expect a quick and flexible experience with no annoying delays. They don't want to answer the same questions several times, even if they use different channels.
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Long-Term Benefits of Digital Onboarding
Digital onboarding will necessitate collaboration between members of a financial team and clients in order to reach a common goal. While technological developments have become the new normal for many customers, it is still critical that customers have access to tools and help as they explore the platform or application during the onboarding process.
1. Customer centricity
Keeping the customer at the center of focus is the only sustainable way to grow a business and improve customer experience with simple and straightforward navigation. It includes not only data collecting and acceptance of an inescapable administrative burden, but also an understanding of the prospect's needs. The technique can be adjusted to the demands and tastes of the customers thanks to the computerized workflow.
2. Fast Onboarding
Onboarding with a bank is often a high-friction process that involves going to the office, standing in long lines, dealing with messengers, and filling out tedious paperwork. In a traditional banking setting, what would ordinarily take three weeks can now be completed in three minutes. The digital onboarding of bank clients allows an individual to be registered with all of the essential requirements and additional evidence that the bank may require at the moment.
3. Robust and real-time security
Digital onboarding has a number of built-in security protocols to ensure that stringent security is maintained. The biometric pattern of the face guarantees accurate online identity verification as well as the individual's life existence in real time. With the support of system-guided data validation, data errors, internal handling effort, and time are all reduced.
4. Lower Operational Costs
Electronic KYC processes, according to McKinsey , can cut onboarding costs by up to 90%. Automated processes and digital databases enable a significant boost in the overall efficiency of a bank's processes. On-site document handling and filing can be expensive, but with digital onboarding, many of those costs can be removed.