Have you ever been on a blind date only to realise it’s a bad one? Your date doesn’t look anything like their profile pic, is rude to the servers, orders too many drinks, and wants you to pay when the cheque comes. Sounds familiar? If you think about it, onboarding a customer for banking and financial services is pretty much on the same lines. They don’t know who their customer really is or how they will behave, and if they aren’t careful, they lose a lot more than the price of someone else’s drinks. Banks and financial institutions (FIs), need to enhance customer screening and create the optimum onboarding workflows to stop fraudsters from accessing their services. 
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Digital Onboarding and its Challenges

The onboarding process requires many steps, including gathering comprehensive financial and personal data of the customer, verifying against approved sources across government agencies, setting up accounts, and post-onboarding, constant monitoring for compliance. According to a survey by Deloitte, customers expect as high a level of service and personalised communication as they enjoy in other areas of their lives. To deliver an exceptional customer experience, the onboarding process needs to be as seamless and straightforward as possible, but the challenges to creating a seamless experience are significant.

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Too Much Friction

For every 100 customers screened during onboarding, only a few will raise red flags and be blocked entirely from accessing the services. But the repercussions may be higher if legitimate customers experience too much friction during the screening process. Introducing identity proofing solutions where users need to provide documents during signup is tedious and discourages them from completing the process, resulting in poor conversion rates, high costs of customer acquisition, and diminished revenue opportunities. A Deloitte research reveals that at least 38 %  of customers drop out of the onboarding process, often as a result of frustration with the sheer volume of touchpoints and paperwork involved. Here’s how Risk-Based Authentication can help your business.
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Security and Compliance

While digital onboarding emphasises convenience and customer experience, safety and security cannot lose priority. Along with high-end encryption and compliance with KYC and AML, additional ways to address security through onboarding is essential.
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Falling Behind the Times

Technology is evolving with every passing day. You’ll need to keep up with the times to understand what features can help in improving the onboarding process. You need to regularly analyse and identify areas which lead to customer abandonment. Fixing pain points and bottlenecks can go a long way.

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Data Management

You may need to walk a fine line between collecting so much data that the customer gets annoyed and not collecting enough to serve them or stay compliant. 

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How To Upgrade your Customer Screening Process

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Collaborate with Reliable Data Providers

Every bank and financial institution needs reliable data providers for their due diligence and customer screening. When a customer types in their phone number or email, external data should quickly check whether the customer is who they claim to be. Here’s why you should know your customers better.

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Focus on Reducing Customer Friction

Automated solutions also help to reduce customer friction. For example, solutions that can automatically pull out information during the onboarding process can help banks and FIs to approve trustworthy customers faster. They can also be more effective than humans at uncovering non-intuitive or subtle fraud patterns. Read more about automating decisions for faster fraud detection.

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Lower Operating Costs

Banks and FIs can lower their operating costs by automating acquisition and, to some extent, servicing. Automation enables a more sophisticated screening process for prospective customers and leads to the early detection of high-risk behaviours that signal risk of default and fraud. An Accenture report reveals that with AI-based solutions, banks can achieve a 2-5X increase in the volume of interactions or transactions with the same headcount.

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Team Up to Lessen Friction

Often, organisational teams work in silos with minimal communication within teams. As a result, it creates an information silo where the customer service team isn’t aware of why a customer was rejected or why a particular customer had a bad experience. They are unable to explain the same to the customer, which becomes a bad experience for the customer. Having a single source of truth when it comes to rules for accepting or rejecting a customer is therefore essential 

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Bureau: Onboards More Users with Less Friction

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The future of banking rests on a digital infrastructure that can create reliable digital customer journeys for onboarding by gathering appropriate information with the least friction possible. A slick, agile and flexible solution such as Bureau’s checks for fraud and friction seamlessly. Bureau’s ML models are built upon 50+ signals to help you identify good users and bad users. With data from user inputs, device, their behavioural history, and digital footprints, Bureau draws up comprehensive risk-gauged profiles for each user and matches them with the details provided by the applicant. High-risk profiles are then flagged for further checks, while those with matched-up profiles are granted a smooth onboarding process. Every critical interaction is accessed to make informed decisions in real-time. So while you get the right users, better conversions, and less fraud, your customers get a seamless experience.

• Reduces manual reviews and lets good users create accounts online with minimum friction.
• Identifies high-risk users and reduces fraudulent signups before they can abuse the system and bust out.
• Fast-tracks good users and penalises the bad ones with additional checks or reviews.
• Automates manual compliance checks without compromising on security.

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Conclusion

With Fintech companies disrupting the traditional retail banking model, the future of banking depends on how banks and FIs transform their customer relationships through an efficient digital onboarding process. Smooth onboarding can be achieved only through an innovative, agile, and customer-focused process like Bureau that helps you calibrate your funnels and provides enriching insights behind every action so that you never sacrifice growth. Learn more about Bureau here.

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