3 Reasons Why Digital Customer Onboarding is a Must in The Banking Sector
Pedro Borges, Founder and Chief Operating Officer of LOQR, point of view about the importance of digital Customer Onboarding in the Banking Sector, published on The Fintech Times.
Technology advances have shaped the world we live in today, making it more competitive and accelerated than ever. Because of those rapid changes, traditional institutions, such as the banking sector, felt the need to create better and more optimized solutions for their customers to improve the experience. Therefore, it has become essential to focus on a practical digital customer onboarding experience.
Before exploring why digital customer onboarding is a significant part of the business, especially for the banking sector, we need to take a step back to understand essential points.
What is customer onboarding?
Customer onboarding refers to the process of introducing your product to a customer. It is the moment you will be teaching and guiding the customer on making the best use of your product or service.
Onboarding customers is about showing them what you can offer, your solutions, and listening to their questions and worries. It is an essential part of the beginning of the relationship, as you show the customer that you can and will offer him a smooth experience.
EVERY INTERACTION WITH THE CUSTOMER IS MEANINGFUL BECAUSE IT GIVES YOU THE CHANCE TO LEAVE AN IMPRESSION.
Customer onboarding is an essential part of this new interaction, and that is why so many companies have been focusing on this process recently. A report shows that customers are more likely to renew a relationship with a company if their interactions are fast and easy. The same research states that positive experiences make customers more likely to recommend the company’s product or service to friends or family.
What is customer onboarding for banks?
In the banking sector, the customer onboarding process is also part of the beginning of their relationship. It includes various activities, such as evaluating the customer’s request, legal aspects, opening the account, and making it operational.
The onboarding process for the bank is mainly checking a lot of information to comply with complex regulations that are different from country to country. On the other hand, the process for the customer includes many forms and applications, files, manual compliance checks, and in-person identification checks.
Why is digital customer onboarding changing businesses?
By now, you clearly understand that the onboarding process is an essential part of the customer experience; however, more than the onboarding process, the digital customer onboarding process has changed the way companies interact with their customers. It marks the beginning of a fully digital journey.
For the banking industry, digital customer onboarding was a game-changer as it facilitated every step of the onboarding process. Instead of multiple paper forms and in-person checks, you can create an optimized and easy-to-follow experience for new customers remotely.
Those significant improvements have proven the importance of offering digital customer onboarding in banking institutions more than ever.
Why should the banking sector invest in digital customer onboarding?
Digital onboarding reduces fraud
Banks have been dealing with revenue loss due to fraud for years. Statistics show that the annual value of online banking fraud losses reached approximately 159.7 million pounds in 2020. In addition, the traditional operation of banks is not able to avoid security breaches as technology advances.
The digital onboarding process helps banks increase their system’s security and reduce fraud because it provides numerous tools to help them effortlessly check the customer’s identity. With a digital onboarding process, it is possible to use reliable technology tools to connect with the customer, run liveness checks, guided interviews, and more.
With LOQR’s platform, you get to anticipate and adjust regulatory changes in your journeys and benefit from fully compliance journeys (AML/KYC).
Digital onboarding improves customer experience
Happy customers always come back for more. A satisfied customer tells other people about your company. The user experience is essential to ensuring that your bank’s reputation is solid and increasing in the market.
The digital onboarding process gives the customer a first glimpse of what they can expect from your bank – and how easy and smooth the operations can be. They can also make sure that the interface is easy to use and how fast the operations run.
The world is moving to digital faster than ever; however, the digital world needs to be easy to use and, with simple steps, provide quick and flexible access to bank services. At LOQR, we simplify processes, deliver journeys and focus 100% on user experience.
Digital onboarding increases operational effectiveness
Banks can improve their workflow and reduce the amount of time and costs spent on paperwork with more digital processes such as digital onboarding. The right tools can help reduce workdays to minutes if you have a suitable platform to help you with customer onboarding while following the regulatory standards.
There are so many time-consuming processes in the banking sector that can be reduced using digital onboarding services. From increasing security to reducing the number of forms and files, the customer must fill in and do every step of the way remotely.
Digital onboarding helps to decrease dependence on branches, reduce operating costs, and allows you to free your team from other relevant and more complex tasks. It can also help banks expand their business as they reach people from different locations and improve employees’ productivity, adding value to its growth.
Resort to AI – Artificial Intelligence and ML – Machine Learning for automated KYC processes, reducing time, cost, and potential inaccuracies.
The importance of digital tools
Technology evolves fast, and new tools are created every day to make our lives easier. As a financial institution, it is essential to be aware of those rapid changes and ready to adapt to provide the best customer experience to every customer. However, from everything that has changed, one thing remains solid: customer satisfaction comes first, and the customer experience is vital.
Understanding what needs to be done and the importance of digital tools to help to improve the business is also essential. It’s time to look at your business, review what needs to be adapted and focus on the best and most creative ways to engage with your customer and improve their experience in every step of the journey. Digital onboarding is part of this improvement, and it must be on your radar.
Those digital tools help you keep updated with the latest market trends and ensure your organization rapidly delivers innovative solutions, giving your company an edge over competitors.
If you’re looking for help to improve your digital customer onboarding process or to change the way your bank deals with customer onboarding, LOQR is the right place for you. Contact us and book a demo.
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