I’ve noticed a trend throughout my career that businesses operating in a strong economy focus less on onboarding inefficiencies.
It’s understandable. During those times, organizations lean into seizing the moment and accelerating their growth. As such, onboarding as many customers as possible outweighs the possibility of certain segments having a lower lifetime value or higher customer acquisition cost.
When the economy slows, however, businesses must pay closer attention to the likelihood that inefficiencies exist, take stock of what is and isn’t working and recalibrate. That’s what I’m seeing across markets and regions now.
It’s a course correction toward more refined, precise onboarding. Companies want the most valuable customers for the most manageable cost, and streamlined identity verification is often the answer.
I’ve worked in the identity verification industry for nearly a decade, and the company where I’m chief operating officer helps many of the world’s largest enterprises tackle that challenge. Honing in on value for spend ensures that, just like other business metrics, onboarding is as efficient as possible.
Here are three fundamental strategies that can help companies achieve that goal.
1. Leverage the Right Verification Method with Optimized Performance
In any given situation, there is a range of verification methods a company could use, including identity document verification or checking personally identifiable information (PII) against government registries, credit bureaus or other data sources. Businesses find efficiency by choosing the best method for a specific type of customer.
Let’s say you’re onboarding a 20-year-old. Identity document verification rather than checking PII against data sources is likely more efficient because younger demographics often have a lower credit footprint. If you’re verifying a 50-year-old, PII matching is probably more efficient because that person has transacted in the economic system for longer.
Those are simplified examples, but generally speaking, businesses can go further toward onboarding efficiency by optimizing the performance and speed of each identity verification method.
Another vector is the dynamic optimization between decision rules and databases. Suppose you want to check PII against data sources in Italy. If you have the local expertise to assess those sources’ strengths with different data points such as addresses or birthdates, you can customize verification to prioritize the more robust data points and, in turn, accelerate onboarding.
The key is to find efficiency in the broader sense of verification type and in the granular realities of the sources you leverage.
2. Ensure Onboarding and Identity Verification Match the Market Reality
Market realities for onboarding verification vary around the world. ID numbers are required in China. In the Netherlands, name verification relies heavily on the first initial as opposed to the full first name.
In Paris, apartment numbers are few and far between, meaning that specific data point is challenging to include in your risk-based approach to onboarding. Ignoring, or not knowing, that market reality could delay onboarding, frustrate customers and increase abandonment.
If you’re considering working with technology partners for identity verification, make sure they understand the global market and its nuances, show expertise and match it to the right onboarding strategy. This understanding is critical to onboarding success if you’re operating in global markets.
3. Consolidate Your Technology
User onboarding touches multiple business departments. Risk, compliance and legal play large roles and often have their own teams such as for anti-money laundering and know your customer. In many companies, those departments are spread around the world. Business unit silos can rise quickly in that environment.
Within those silos, departments often select country-specific verification or onboarding partners and tools—many of which overlap or are ineffective compared with those in other business units. Inefficiencies arise when those technologies don’t communicate well with each other, integrate with new services or adapt to market changes.
Technology and operational consolidation can overcome those inefficiencies by opening the door to onboarding partners and platforms that work across the company. It can improve the customer experience, reduce needless expenses and close gaps in security.
Agile Onboarding can Limit Inefficiencies
Onboarding, much like all other business operations, isn’t one size fits all. Each customer and each market presents a different identity verification challenge.
Agility is the key to efficiency. It gives companies the flexibility they need to adapt to any market reality anywhere in the world. They can adjust to changing economic conditions, evolving regulatory requirements and emerging threats.
That verification flexibility removes the barriers between businesses and their most high-value customers. It provides the precision to grow in any economic environment.
This article first appeared in Forbes.
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