Article 5 min

What is a Digital Onboarding Process?

Digital onboarding process

July 6, 2022  

Digital transformation is changing the nature of business and the digital onboarding process is becoming the default way to onboard new customers. The onboarding phase is crucial for converting prospects to customers and allows you to integrate numerous services. Finding the right tools for digital onboarding makes embracing new technology more seamless for your customers and operations.

But how does it work? Here’s everything you need to know about the digital onboarding process.

What does digital onboarding mean?

Think of the digital onboarding process like you would the manual version. Imagine for a second that you’re a bank and you’re onboarding a new customer. There are forms to fill, information that needs verification and accounts that require creation. Digital onboarding replicates that same manual process using online channels, adding in automation opportunities.

This means the process can be entirely remote without customers ever having to visit your office or branch, or speak to a representative. This allows your business to convert a lead into a customer using exclusively online tools at a much faster rate.

What is a digital onboarding process?

While the digital onboarding processes varies from company to company, there are common use cases that will have similar requirements. For regulated organizations, such as banks and financial service companies, capturing and verifying the client’s data and documentation to perform due diligence is mandated.

From the customer’s perspective, they simply fill out an online form, perhaps upload required documents and wait for approval. This can be done through a phone or laptop, requiring far less effort than pen to paper.

The organization then needs to verify the information. Depending on the country you’re onboarding in, almost all data can be pulled from the local databases. For example, in Singapore, Myinfo allows you to acquire useful information about property ownership, vehicles, driving license and even their financial situation like CPF details and yearly assessable income. This means the client doesn’t have to provide as much documentation, saving them the hassle.

When onboarding is done manually, it can require a lot of back and forth over multiple touchpoints, including filling out a series of forms, printing documents and verifying identities manually. Naturally, this takes up a good chunk of time and effort. Oftentimes, processing a single corporate client can take three to four months.

The online onboarding process can unfold more rapidly, so your client isn’t left waiting and having to deal with mountains of paperwork. In some cases, that same corporate client is onboarded in less than a day. Best of all, everything then lives on one platform, making it easier as a business to process all the data collected.

What is digital onboarding in banking?

Digital onboarding in banking provides a new customer a way to sign up online quickly and seamlessly without visiting a bank branch. Automated processes check and verify the customers identity data to help the financial institution ensure the customer is not involved with financial crime.

Customers nowadays, especially since the pandemic, expect digital onboarding. According to Salesforce Future of Financial Services research, 78% of banking customers initiate relationships on a website or app. Having a solid data collection system that is accurate is vital, particularly when it comes to highly regulated industries. On top of that, digital onboarding in banking means you can stay on the cusp of compliance changes much more easily; you adapt system workflows digitally.

This is the major benefit of having a digital solution, particularly if you offer services across multiple countries and have to comply with regulations in different ways. Digital onboarding unlocks many automated functions that make conducting Know Your Customer (KYC), Know Your Business (KYB), and Anti-Money Laundering checks faster.

For customers, using digital identity verification makes the process truly remote and having an intuitive, easy interface can make a serious process feel less tedious and run far more smoothly. And a good experience is crucial for today’s busy customers; Salesforce found that 35% of customers switched their banking provider for an easier, more intuitive experience.

Some services can even automatically fetch and prefill a company or owner’s data from a local registry to speed up the process and ensure compliance. As signing important documents can be also done digitally, banks are increasingly focusing customer acquisition efforts on digital onboarding channels.

Why digital onboarding?

Digital onboarding delivers substantial cost savings, including reducing:

  • Physical locations
  • Manual processing
  • Clerical errors
  • Record keeping and auditing costs

Digital onboarding is also more efficient, user-friendly, faster at onboarding clients and far more accessible for everyone. Inundating customers with paperwork and long waiting times is a bad experience and can lead to frustration and even abandonment. Alternatively, making a customer’s life easier leads to happy customers.

For compliance, automating processes creates more systematic processes, resulting in less errors; errors detected during the onboarding flow are flagged immediately rather than waiting for your team to review a form manually.

Digital onboarding also improves internal workflows drastically with full access to data, making internal collaboration seamless and granting the ability to see where customers are in their onboarding journey.

Digital onboarding is a faster, more efficient path to customer acquisition. Conducting onboarding online is easier for customers and more efficient for internal collaboration. With robust and effective digital onboarding processes, your digital transformation initiatives are starting with a foundation of trust and security to propel your organization forward.