The Importance of Customer Onboarding in the Financial Sector

Digitalizing financial services has revolutionised the industry, helping to optimise processes while ensuring high security standards for customers and institutions. Financial transactions and operations are more digital than ever, and this trend will grow in the coming years. That is why it is so important for the sector to be increasingly aligned with digital changes and regulations.  

In this sense, the customer onboarding process has also undergone significant changes, revolutionising various sectors, whether they are 100% digital or still have some physical approach. The financial industry has been no different. Amid the digital revolution, banks have had to adapt to all the innovative processes that digitalization has brought while keeping up with the continuous change in their customer’s behavior and expectations. 

Statistics show an effective onboarding process can increase customer retention by over 50%. In this article, we’ll discuss the crucial importance of this process for the financial sector. 

What is Digital Onboarding?

Onboarding is a customer’s first step before starting their journey, that is, in the banking sector, to begin the process that will allow them to use a financial service. In a digital context, customer onboarding enables financial institutions to identify customers digitally and incorporate them as new customers and users from anywhere, at any convenient time, and through any digital channel ensuring regulatory compliance safely.

Customer Onboarding in the Financial Sector

In the financial sector, the customer’s digital onboarding journey usually includes data collection and identity verification processes to ensure the legitimacy of operations. However, in an increasingly fast-paced and technological society, people seek less time-consuming and optimised processes to reduce the time wasted on daily operations. 
 
Fewer and fewer people are willing to spend hours on banking processes such as opening a bank account, updating their personal information, or going to a branch for more information or support. Financial institutions must be prepared and adapted to offer increasingly fast, efficient, and secure solutions. Facilitating enrollment with efficient document verification, identity validation, and easy-to-use interfaces will improve the overall user experience and customer satisfaction.

Benefits of an Efficient Customer Digital Onboarding Experience

An efficient onboarding process is a game-changer for both the customer and the financial institution providing digital services. Institutions must ensure a secure, personalised, and compliant experience from the start. Creating a seamless experience at the very first interaction enables the customer to connect and build trust, and financial institutions can significantly reduce time and operational costs by leveraging technology, such as automated KYC processes.

A well-optimised onboarding experience eliminates unnecessary friction for the customer while maintaining robust safeguards against fraud and non-compliance in a highly competitive and regulated industry. 

Common Concerns of the Digital Onboarding Process

Although it seems a straightforward and beneficial process for financial institutions, organisations still face many concerns regarding digital processes, and customer onboarding is one of them. The most common fears are regulatory compliance, fraud detection and prevention, and integration with existing systems. 

Ensuring adherence to strict regulations such as KYC, Anti-Money Laundering (AML), GDPR, and other region-specific laws, balancing seamless user experiences with the need to collect and verify sensitive data without compromising compliance, mitigating the risk of fraud during the onboarding process, such as identity theft or account takeovers, and the difficulty of integrating new digital onboarding tools with outdated or fragmented systems are a few of the most common concerns from this highly regulated industry. 

How LOQR can help you Transform the Customer Onboarding Experience

With strong expertise in cybersecurity, compliance, and market regulations, LOQR plays a crucial role in empowering financial institutions to overcome their concerns and confidently adopt more digital solutions that transform their clients’ experiences and exceed their expectations. 

We understand this heavily regulated industry’s challenges and specific needs, delivering innovative solutions designed to guarantee our clients’ expansion and growth. Our Platform fully complies with the applicable regulations, ensuring our clients fulfill KYC/KYB and AML requirements while streamlining internal processes by automating many tasks traditionally handled by physical branches. This reduces operational costs and frees staff to focus on more valuable activities, such as personalised customer service or strategic planning. 

LOQR’s Customer Onboarding Solution

Our Platform allows you to build a secure, simple, fast customer journey. First impressions are the key to successful relationships. 

KYC Identity
Give your institution the flexibility to design an onboarding journey adjusted to your customers’ expectations. 

Improved Customer Data Acquisition
Reduce your journey’s duration and increase data reliability with advanced OCR mechanisms. 

Due-Diligence Advanced Checks
Comply with regulatory due-diligence processes (KYC and AML), including PEP, RCA, SIP, and ID authenticity checks. 

Assisted Video-Interview and Biometric Support
Secure and reliable video-call technology allows self-recorded or operator-guided interviews, with integrated biometric enrolment capabilities and automated liveness detection checks. 

Regulatory Compliance and Security  

LOQR’s solution is in strict compliance with: 

– General Data Protection Regulation (GDPR).
– eIDAS Regulation, ensuring the capability to issue qualified certificates (LOQR acts as a Registration Authority of a Certification Authority entered in the EU Trusted List).
– LINCE Qualification, providing advanced protection against cyber threats in video identification tools.
– ISO/IEC 27001 and ISO/IEC 30107-3 standards for information security and biometrics. 

At LOQR, we understand the importance of a smooth, secure, and personalised digital experience. We have all the tools to empower your business to grow on this digital journey. Contact us to find out more!