Digital onboarding: an essential tool for today
Although it started out as a novelty, digital enrollment was soon positioned to be an essential solution in the context of the pandemic. Its proven benefits explain why it has become a key asset for the success of financial institutions
Digital onboarding is a technological solution that transforms the relationship between a company and the user. On the one hand, it provides online tools for verifying the identity of customers that acquire a digital product. But also, in a broader sense, it is essential for improving customer service, both for new and existing users, since it allows for faster registrations and answers to be provided in real time, anytime, anywhere.
During the COVID-19 pandemic, companies from different sectors, including the financial industry, were forced to overcome new challenges and rethink the way they provide remote services to their clients, taking the benefits of the bank branch and making them available to the user 24/7, 365 days a year and in any location. That led to digital onboarding becoming the cornerstone of this digital transformation.
Virtual enrollment went from being optional to becoming an essential step for approaching clients or products, with safe, fast, simple processes while providing users and institutions guarantees against fraud prevention.
This evolution is based on a fundamental premise: people look for digital features that make online processes easier, in order to have time for other matters, such as personal or family life. This represents a challenge — and also an opportunity — for the financial industry.
WHY HAVE DIGITAL ONBOARDING?
The objective of this business solution is essentially to offer people the opportunity to carry out their operations away from branches, ensuring their identity can be confirmed via digital devices, such as cameras and biometrics, in order to prevent fraud and identity theft.
It is a process that taps into official databases to corroborate documentation and personal details as a way of verifying that the person is who they say they are. Therefore it is very secure and also enables shorter response times compared with traditional methods.
The process of acquiring financial products goes from taking days to minutes, allowing customers to open their new accounts digitally and start enjoying the benefits immediately.
BENEFITS FOR USERS: UX OPTIMIZATION AND FINANCIAL INCLUSION
The incorporation of digital onboarding is an advantage for the banking industry, since it offers a dynamic process that improves interactions with digital channels and enhances the user experience (UX); this, in turn, fosters financial inclusion.
Clearly, it is a tool that makes it possible for more people, from a broad range of social and educational backgrounds and with different levels of Internet accesses, to open accounts and take out products, avoiding bureaucracy, travel, and the complexities that often distance customers from institutions.
Likewise, it offers MiPymes, small businesses and the self-employed the possibility of joining the financial system through savings, loans and transactions that are entirely online.
The benefits of this type of onboarding can be summarized thus:
- It improves the customer experience by providing a simple, accessible service.
- It allows users to complete the process almost in real time, increasing the quality of the service and optimizing the experience.
- It helps to prevent digital fraud, which bolster the security for the user and the institution.
The numbers underline the importance of adding frictionless, error-proof onboarding. Approximately 450 million customers, about 25% of the population, are already customers of exclusively digital banking, according to the Global Digital Banking Index 2021, prepared by the European neobank N26.
The study also points out that almost half of the consumers surveyed who said they do not have a digital account were open to the idea of acquiring one. “Taken together, these findings suggest that digital banks still have a huge potential market to discover (up to 1.4 billion people of 28 countries surveyed)," the study said.
Offering users an effective digital onboarding is therefore the first step for financial institutions that want to remain up to date and connected with the demands of the markets in which they operate.
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