Onboarding in digital banking: overcoming the first hurdle
Examining the benefits of digitised onboarding processes in banking, highlighting increased efficiency, flexibility, transparency, and security in a rapidly changing financial landscape.
As they say, you rarely have a second opportunity to make a first impression. First impressions set the tone for all that is to come, and the same logic rings true for the challenge of onboarding banking clients, forming the basis of the business relationship that follows.
As the expectations of institutional clients for digital accessibility and flexibility of services reach the same levels as retail consumers’ counterparts, banks must ensure their onboarding processes are meeting new levels of expectation.
Often built upon a patchwork of legacy systems, flexible and scalable digital platforms are not always offered by traditional banking providers.
As such, onboarding onto traditional bank accounts by filling up paper forms and sharing manual documents is an often-cited headache for corporate clients.
Banks must now consider the overall approach to and client onboarding experience and aim to make the process as frictionless as possible.
Here we examine some of the benefits of a fully-digitised onboarding process, designed and fit for purpose in the modern world.
The COVID-19 pandemic has emphasised the need for banks to accelerate their digital transformation strategies, and their approach to the onboarding process is no exception.
And everyone is a winner: for banks, digitisation offers both cost savings from a reduction in the manual intervention required, as well as quicker time to revenue from a truncated onboarding process.
For clients with complex corporate structures and multiple special-purpose vehicles, the benefits are magnified, with the ability to leverage existing data to streamline future onboarding of new entities and vehicles.
The future of tech-enabled onboarding solutions
Technology applied to onboarding can smooth out inefficiencies, saving clients time, resources and money, as while the sending of paper documents takes days, digital journeys can be measured in minutes.
While retail clients can now expect access to their active account in less than two days, average times for corporate client onboarding remain more than two months.
During the pandemic, the signing of hard copy documents with ‘wet ink’ signatures was suddenly not possible, catalysing the need for new approaches.
By applying a fresh, tech-enabled lens to documentation processes, the amount of redundant effort and duplication of documentation can now be largely eliminated.
Digital onboarding not only saves time at the point of onboarding but further down the line; the secure storage of documentation means it can be reused for future requirements, ensuring that the bank doesn’t request multiple copies of the same documentation at different stages of the relationship – one of the pain points flagged most frequently within the onboarding journey.
Flexibility & Transparency
Transparency is of growing importance to corporate banking customers who want to understand where they are in the onboarding journey and to identify any potential stumbling blocks on the horizon.
Hand in hand with transparency is the demand for greater flexibility in the onboarding process and the ability for clients to remain in control of the pace of their onboarding journey.
They have a clear view of what the bank requires for a given application and what information fields the bank has already populated.
The capability to not only accommodate complex structures but the ability also to simplify these into accessible and digestible onboarding steps will also become essential.
Security & Compliance
The current global regulatory framework surrounding financial services is highly (and increasingly) complex, but this presents opportunities for onboarding technologies, as well as challenges to overcome.
Whether digital or traditional, banks should thoroughly understand the differences between the regional or local standards, which could impact them and foster constructive relationships with regulators.
Data breaches and human errors: The downside of hard copy transmissions
Mailing hard copies of potentially sensitive documents remains the primary form of information collection for corporate onboarding, despite the recurrence of data breaches and the potential for human errors in these transmissions.
Document collection via a dedicated web portal is more secure and more convenient for the end user; instead of trips to a post office or even the office fax machine, the client can go through one seamless digital journey.
Essential steps like customer due diligence, identity verification, and KYC can all be enhanced and improved with new technologies, including biometrics, e-signature, and APIs, reducing the overall onboarding burden.
Indeed, the areas where technology has the most significant impact on corporate onboarding are capturing relevant KYC/AML information.
The convenience of onboarding as retail customers will also be expected in business banking, underpinned by a fully digital, seamless and efficient onboarding experience.
Improving the digital journey and interactions with banks from onboarding to service delivery will continue to be a competitive differentiator.
In the post-pandemic world, we see corporate banking users shouting out for the benefits of digital onboarding – and it is now up to banking providers to deliver them.
About the Author: Ankit Shah is the Head of Digital Banking at Apex Group.
This article was first published by Fintechly on March 24, 2023. Read the original piece here: https://fintechly.com/banking/onboarding-in-digital-banking-overcoming-the-first-hurdle/