Digital Onboarding Explained

If you're familiar with online marketing, then you've heard of the term before. As the COVID-19 pandemic grips the world, industries must find ways to evolve to remain active. The banking industry is no different, and it must find ways to facilitate and improve customer satisfaction. Like getting most of their banking information online, many people will often choose banks that offer the best online services. That's where digital onboarding comes in to play.

What Is Digital Onboarding In Banking?

Digital onboarding in banking is the practice of signing up for a bank account or other banking services entirely online or via mobile. The process of onboarding generally occurs during the client's first interaction with the bank. During onboarding, the client and bank establish a relationship; the client provides the bank with necessary identity information.

The concept of digital onboarding received significant traction in 2016 after FINMA allowed banks to verify new clients digitally using video authentication. Before this allowance, no such option was available for any banks, and customer authentication could only occur during bank visits.

Using the digital onboarding platform is the easiest way for banks to attract new customers and retain older ones during these testing times.

What Is The Purpose Of Onboarding?

The purpose of onboarding is two-fold, firstly it's a method for banks to attract new customers. Now more than ever, clients are expecting to get convenient and easy-to-use services. Banks can compete with each other depending on the quality of onboarding services they offer. Another reason why banks engage in onboarding is so they can provide clients with additional information.

After attaining your information after onboarding, banks are free to message you and talk about other services. This allows banks to retain existing customers by offering them newer services and giving information about different products. Moreover, banks can't allow clients to open up their accounts until all the necessary documentation. While it's understandable that banks need to have thorough processes to ensure the financial security, consumers are mainly concerned with their time.

If the onboarding process is too long, the clients will just give up and not sign up for the service. Banks that have a shorter onboarding process immediately seem more attractive to customers. A key aspect of offering digital services is ensuring that the process is as quick as possible, which is why modern banks need to place a lot of importance on digital onboarding.

Benefits of Onboarding

There are multiple benefits to engaging in digital onboarding. Banks need to thrive in the current economic conditions, with several countries imposing full lockdowns, it's only natural that digital onboarding becomes the precedence.

1. Allows Banks to Compete With One Another

Acquiring new customers is becoming increasingly more painful and expensive because of the various numbers of options that are available to customers. One way banks can compete with one another is their digital onboarding services.

When clients are looking to sign-up, especially millennial clients, instant connectivity is one of their most crucial requirements. They aren't fans of the age-old idea of visiting the bank and long drawn out processes. The convenience of checking your balance at any given point and making transactions is key to the modern consumer.

Banks that offer easy-to-use instant access will have an advantage when it comes to attracting a new client. The number one reason why clients give up on the onboarding process is if it’s too lengthy. One of the most important things you need to do is completely streamline the process; this will help ensure that nobody gives up on your onboarding process.

2. Client Centricity

One of the key features of growing your business is always keeping your client at the center of your focus. It doesn't mean just collecting data and burdening yourself with administrative duties; banks need to understand their clients. The digital onboarding platform helps ensure that clients will always focus on the process and it gives banks a more significant idea of their preferences.

3. Efficiency

Arguably, one of the essential features of digital onboarding is increasing efficiency. As the system is dependent on new data validation, handling the whole process is possible in minimal times. Due to the process being automatic, there's no chance for manual errors. Customers can now just as easily use their phone as an alternative to carrying money; banks that embrace the digital onboarding process can help give clients more freedom.

4. New Customers

Lastly, one of the most significant advantages of the digital onboarding process is the end goal. After taking the time and effort to streamline and creating an efficient system, the banks are rewarded with new clients. Banks also get the chance to sell the customer additional products and services.

Conclusion

Given the current conditions of the world, the banking industry must embrace the digital onboarding process. Customers need to remain the sector's priority, and this is the new direction banks need to bring their focus towards. Embracing the digital age will help ensure that the banks remain future proof!

This article does not necessarily reflect the opinions of the editors or management of EconoTimes