Making a Great Digital First Impression
How to secure banking and be a hit with the customers
- By Katie Björk
- Apr 18, 2023
Onboarding customers digitally is a challenging juggling act for banks. Prospective customers will abandon the process if it doesn’t meet their expectations for an easy experience. But the fraud prevention measures banks must have in place can sometimes conflict with these expectations.
These fraud-fighting measures are essential for banks and financial services providers, who must follow local and regional regulations such as those related to KYC/AML. Banks and other financial service providers such as credit unions must execute proper due diligence by accurately verifying the identity of each customer during onboarding. This is a foundational step in the customer journey and must be as easy and intuitive as any other.
Importance of the Digital Identity Verification Experience
Incumbent banks and credit unions are under growing pressure to keep up with digital first banks that have raised customer expectations for on-line service ease and sophistication. If incumbents can impress prospective customers during the digital identity verification process done through onboarding, they have a chance to out-shine these competitors. If they can’t, they risk business and reputational damage.
The onboarding process must be both user-friendly and compliant. Today’s customers are familiar with creating an account for any service with just a few taps. There are several best practices to follow to achieve the same type of experience during onboarding, starting with taking a mobile-first approach to identity verification and then focusing on how information is requested, documents are submitted, and compliance requirements are met, and very importantly, how fast validations are processed.
A mobile-first approach is particularly important. Many people, regardless of age, now use smartphones more than their desktop or laptop PC, viewing them as an extension of themselves. If mobile onboarding is done well, prospective customers know the bank, or the credit union is a modern digital organization that can fully support their account management needs in a way that is effective and convenient. If the mobile experience is clunky or non-existent, however, it makes the institution look inflexible and archaic.
The next element of a well-constructed digital identity verification experience is simple, easy-to-follow information requests. The process must work for people who have embraced advanced digitalization as well as less computer-literate customers who may need more guidance. Key elements include easy-to-execute tasks, clear indications of where the prospective customer is in the process, how much time is still in the process. The interface must be simple and intuitive, and cover everything that is occurring behind the scenes, with ample due-diligence checks. Providing this kind of a process lets customers know that a bank respects their time, and that future processes will be equally simple, whether managing their account or signing up for future services.
Simple, easy-to-follow information requests are essential for moving the prospective customer through the onboarding process and paving the way for future success with account management or signing up for new services.
Likewise, the process of sending identity documents should take minimal effort, especially because it sometimes involves external steps, such as finding the correct document and ensuring it is valid. The process should be as easy as possible and include document-capture automation or clear instructions for how documents should be sent.
The system should also be intuitive enough so that, if a user’s document isn’t accepted, it can still facilitate submission of a correct ID document. Cutting this common bottleneck enables the customer to keep moving forward, rather than abandoning the process.
The identity verification process should also ensure that compliance requirements never jeopardize the user experience. For instance, when users must upload multiple documents, the bank credit union’s onboarding system should be capable of cross-referencing their information and ID with their databases, in the background. This simplifies compliance for the customer, who might postpone completing the onboarding process or abandon it altogether if this part of the journey is too difficult or complicated.
It is highly unlikely that prospective customers will have multiple documents on hand, so the process of verifying the identity should be simplified by searching its database and alerting the customer, when necessary, documents are already available in the system.
Finally, the period between completing the onboarding process’s identity verification step and receiving an approval should be minimized. If it’s too long, customers may worry that something went wrong, or they might lose interest in the financial services provider. Ideally, banks and credit unions should be able to use onboarding as a springboard into a successful new customer relationship, in real-time. If onboarding was smooth and speedy, customers are more likely to accept an immediate prompt to explore other services offered. This helps them know that the bank is eager to serve its customers.
A fast approval not only increases odds of successful onboarding, but also can also jump-start the process of introducing the bank’s services and accelerating adoption.
In general, multi-layered digital identity verification solutions for user-friendly onboarding should support the following “5 Cs” of identity verification, as shown below:
- Confirm document authenticity
- Capture and verify facial biometrics passively
- Curtail fraud through passive liveness detection
- Cross-check customer name and address using multiple databases for enhanced accuracy
- Comprehensive reporting.
Identity verification solutions with these capabilities are used for applications ranging from onboarding and account reactivation to registering new devices, renewing expired KYC and changing primary account information.
Customer-pleasing yet secure onboarding processes can be deployed using today’s out-of-the-box digital identity verification solutions that allow banks and credit unions of all sizes to quickly create an efficient and effective digital onboarding journey for their customers. These solutions minimize user abandonment without forfeiting security and can be combined with other solutions for the digital consumer journey, from risk-based multi-factor authentication to intelligent fraud prevention, as part of an end-to-end platform for online banking.