To discover the benefits of digitalization in the true sense, banks need to overcome manual onboarding and opt for digital onboarding.

FREMONT, CA: The banking sector is under a strong spell of digitalization. In a quest to convert banks into banking companies into digital-first entities, technology is being incorporated at various levels. The onboarding process determines the customer experience. Today, the markets have become customer-oriented and staying to stay competitive banks have to embrace digital onboarding. By making digital customer onboarding mainstream, banks not only enhance customer experience but also improve security and sales performance. A research report has stated that manual onboarding processes can amount to losses up to $4.5 billion. Thus, the digitalization of the onboarding process is not just an option; banks have to prioritize it to stay profitable.

Why Digital Over Manual?

Recurring challenges that impair the efficiency of banking services can be overcome with digital onboarding. Manual customer onboarding is time-taking and requires customers to fill physical forms, visit bank branches, and interact with bank officials through calls, emails and official letters. Millennial customers expect frictionless services and these shortcomings prevent banks from delivering convenience. Due to the detriments of the manual onboarding process, banks are also subject to potential customers abandoning the onboarding process midway. Besides, out-of-date onboarding does nothing to boost customer data security, which has become remarkably crucial for banks in the times of rising financial frauds and tightening regulatory guidelines.

Enhancing Customer Experience

Digital onboarding has been demonstrated as a useful way for banks to ensure fast signing-up of consumers, with minimum delay and maximum comfort. A report published by Deloitte says that 38 percent of customers consider CX to be the most decisive factor while choosing banking service providers. With digital onboarding, banks can provide customers with a glitch-free and fast experience, creating a satisfying experience. From engaging more people to streamlining applications and verifications, digital solutions provide banking firms to attempt better onboarding practices.

Reduced Financial Frauds

Banking security also gets a significant boost when banks make onboarding process digital. Evaluating new customers manually has been the norm for a long time, but now it is considered uneconomical and inefficient. It is tough to keep a check on all the applications, and discovering risks is also complicated. With digital onboarding, banks get to refine applications and conduct better authentication of personal documents using AI and ML-backed applications. This not only makes the process quick but also decreases irregularities and risks that might get overlooked. Detection of unusual applicant becomes easier, allowing banks to improve security. The digital process is less resource-consuming as well, making it less costly. What adds to the security aspect is that, when a bank transforms its manual onboarding into digital onboarding, it gets to renew the information of old customers as well. This gives rise to a complete, digital database of old and new customers.

Increased Sales

Another advantage that banks get out of digitalized onboarding process is that of increased revenues. Attracting customers is easier when banks offer hassle-free experiences during onboarding. When users can sign up remotely through apps, upload documents for checks through online ways, and get updates in real-time, banking services get a better response. Also,  customer data find a secure place in the banks, making it easier for banks to arrive at insights using analytics tools. Banks can process the data to generate actionable intelligence regarding customer behavior. Recognizing customer behavior allows banks to optimize offerings by personalizing them to a vast extent. With customized products and services, banking firms have the convenience of offering individual customers precisely what they need. Thus, digital onboarding helps banks accumulate analytical data that drives up sales.

Ensuring Compliance

With the risk from hackers growing, regulatory bodies are formulating strict frameworks for banking companies. Today, most of the banks have to conduct KYC. When onboarding process is digital, banks get to ensure regulatory compliance properly. The example of KYC shows the value of adopting digital onboarding by banks. Banks with digital onboarding have successfully overcome the challenge of ensuring KYC. On the other hand, the banks which have not digitalized onboarding, have struggled to fulfill KYC guidelines. Other rigid regulatory obligations also become convenient with automated, intelligent solutions that are deployed to ensure digital onboarding.

Along with improving customer experience and reducing the time and effort that go into onboarding a new customer, digital methods allow banks to realise competitive targets and fulfill compliance requirements with effectiveness. Although banks need resources during transformation phases, the investment in digital onboarding pays quickly and results in better returns and loyal customers. With technology vendors offering easily deployable solutions, and fintechs providing deep expertise, banks are being able to transform legacy onboarding processes into modern, digital ones with significant ease. Considering the benefits of digital onboarding, it is no surprise that customers, and banking service providers, want it. It is time for the banking sector to extend their digitalization endeavours into the field of onboarding, enhancing the customer experience in the process.

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