6 Things to Consider before Your Financial Institution Adopts a Digital Onboarding Strategy

These days, everyone is leading very busy lives. We have jobs, kids and friends to keep us busy. One of the most annoying parts of everyday life is standing in line at the bank. It wastes more of your time than the three media: Facebook, YouTube, and Netflix. In fact, some people have to take a half day off or an extended lunch break to go to the bank or any other financial service points. In steps Digital Onboarding.

What is Digital Onboarding?

Most financial software development companies offer FinTech software services – dedicated websites or apps to acquire customers. A bank, for example, might have their business app listed on the Apple Store or Google Play. And their customers will just have to download the app, enter their personal data and voila - they are in for a treat. Even if they don’t like mobile, there is still the desktop website. As a result, customers can open their accounts from the comfort of their own home and at any time. The thing is that digital onboarding is nothing new. If you ever opened an email or Facebook account, you have already experienced a form of digital onboarding. You can see a number of financial services pop up on the internet. There is online banking, transferring funds like Transferwise, and even digital currency like Bitcoins. Large multinational institutions have started to pay attention and have partnered with technology providers to implement their own digital onboarding strategies. What are the issues you need to be mindful of when starting your journey to creating and implementing a digital onboarding strategy?

1. Regulatory Framework

Because many of the financial transactions are done online and there is no face-to-face interaction, they present some opportunities for unlawful activities like funding terrorism and money laundering. However, regulations are in place to protect the bank and its customers. Some steps to verify identification should be taken. For example, the bank’s technology partner can provide an identification verification service by using different software with access to governmental databases. Another thing is to allow the customer a chance to perform their own due diligence before the sign-up process. This could be a survey managed by the technology partner with a series of questions and information screens as a disclaimer. Online processes should be just as robust as in-person ones. This will generate trust in the system.

2. Money Laundering and Funding Terrorism

This is another issue where the financial institution needs to be fully aligned with the legal framework of a given geography. Having access to local and global criminal databases would be recommended to prevent dangerous persons from opening an account. In addition, geopolitics awareness is also essential in preventing the use of the service to orchestrate criminal activities by turning off capabilities in certain localities. Limitations should be in place to prevent fraudulent transactions with algorithms that can detect abnormal account activities. For example, if a customer is withdrawing more money than usual or they are doing it in a strange location, i.e. a country with lots of terrorist activities.

3. Data Governance

They say that data is the new oil and that businesses who can best utilize it will be the winners. Thanks to financial software development companies offering digital onboarding help massive amounts of data be generated. Therefore, your organization needs to decide how the data will be stored, organized and used. Analysis of data generated from account activities will give your organization insight and perhaps point out other opportunities previously unknown. In addition, based on this data, your business can perform analysis for risk management. Examples include monitoring of suspicious locations, activities, persons and transactions. Furthermore, clear policies on data governance will ensure that the data in the system is consistently high in quality.

4. Cybersecurity and Data Protection

In September of 2017, Equifax announced the breach of their database which occurred in July of that year. As a result, personal information of millions of customers was now in the hands of criminals. As a financial organization doing business with digital tools, it is imperative that your IT infrastructure is running the latest antivirus software and your employees are trained in recognizing different tactics employed by hackers, such as phishing. This also applies to the connection established to the device. It should be secure and encrypted. An emergency plan in the event of breach would be a prudent thing to have. During the onboarding process, training on safe cyber behaviors should also take place on the customer side. Remember, you and the customer are both playing for the same team.

5. Proper Alignment across the Board

The most important ingredient in any financial relationship is trust. Most customers have worked hard for their money. And they trust a bank to manage it correctly. Therefore, there should only be one version of the truth. This means the way one of the branches of the bank operates should mirror the rest of the branches and that every branch upholds the same policies. This means, everyone in the organization from the leadership to the frontline should have the same ways of working and value the same thing. For example, many corporations value cost-cutting. As the world is constantly changing, the organization should be agile enough to adapt to new realities, being able to deal with changes in law, political climate and economy.

6. Customer Experience

You finally got them to open an account with you. How do you keep your customers? You make things easy for them. The best services are the ones that work so well that you don’t notice them. For example, in China, as well as many emerging economies, most of the banking is done through mobile devices because they do not have access to actual banks; as a result, WeChat has become an app that can do everything.



A good UX should be minimalistic. Sometimes, it is enough to offer just the basic services, like checking the balance, transferring funds, and paying bills. This will allow you to keep your app simple and easy to use. It should also be responsive in appearance to the device used. The layout of the screen should be in the order in which the user would do the transactions, without hassle. Try A/B testing to find out what works best for your users. Some automation would be useful, too, to streamline the process for less customer data entry. As a result, there would be fewer errors made leading to better business results.

Conclusion

As a financial institution wishing to adopt a digital onboarding strategy, you are expected to do three things: protect, compete and innovate. You must provide a good amount of protection of your customers’ money and data. You must invest to the right financial software development companies and enable your business to use data for outstanding business outcomes. Finally, you must adopt a model that focuses on being customer-centric, agile, safe, and transparent.

Read next: How Your Personality Is Impacting Your Finances (infographic)

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