Article 4 min

Frictionless Compliance: The New Paradigm for Onboarding Global Customers Online

Frictionless Compliance
Frictionless Compliance

When acquiring new customers online, the initial onboarding process is a critical point in the customer journey. The prospect is interested and has made the decision to proceed but is not yet a customer. If there’s unnecessary friction, any reason to second-guess their decision, they can easily abandon and move on to other companies or simply not proceed at all.

If the customer onboarding process is slow, complex or inconvenient, the risk of abandonment increases. One report found that 63 percent had abandoned banking applications, an increase of 57 percent in two years. However, to mitigate risk of money laundering and fraud, regulated businesses must verify the identity of customers and adhere to regulatory compliance requirements. How can organizations deliver a seamless onboarding experience while simultaneously having the necessary security and oversight functions in place?

Frictionless Compliance is a white paper that examines this vital digital onboarding stage of customer acquisition. Subtitled The New Paradigm for Onboarding Global Customers Online, it examines ways to overcome challenges that threaten user experience and expose companies to fraud and compliance risk.

Download Frictionless Compliance: The New Paradigm for Onboarding Global Customers Online

One indication of how important the onboarding experience is found in another study; 38 percent of new banking customers abandon the account creation process if they find the onboarding process is taking too long, or if it requires more information than they’re prepared to disclose. That 38 percent represents potential long-term customers who won’t generate revenue, won’t be good prospects for other service offerings and will not be evangelists.

Beyond revenue growth issues are the costs associated with Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance. Financial institutions (FIs) are spending between US$60 million and US$500 million annually on KYC and Customer Due Diligence (CDD) processes. If there are compliance failures, additional costs due to fines and sanctions are possible.

Onboarding is increasingly digital

Prior to financial services being made available online, customers were required to visit a physical location to show proof of ID to create an account. The process was slow and inconvenient for the customer and just as bad for the organization. They’d have to perform manual data entry, make copies, keep physical records and, if any change was necessary, do the whole process over again.

Now, online and mobile onboarding processes present the opportunity to bypass the brick-and-mortar location altogether. Using apps or websites, the customer can enter their information and quickly to create an account online. These digital onboarding channels provide an opportunity that is open 24/7, is available anywhere, and is quick, convenient and easy.

For the organization, staff are not bogged down by slow, manual processes and can focus on added-value compliance functions — as data entry is automated, record-keeping and audits are simplified and mistakes are minimized. By enabling customers to instantly create an account entirely online, the organization delivers a positive first impression and increases the likelihood of customer loyalty and retention.

However, for many organizations, digital onboarding is a deep unknown and a totally different way of doing business. Especially when handling money, the considerations of trust, security and compliance are paramount and processes must be carefully vetted, tested and implemented. Even for organizations that are comfortable with digital onboarding, it’s vital to optimize the process to make it as quick and seamless as possible while ensuring compliance.

Understanding the intricacies of compliant digital onboarding is fundamental to the new nature of doing business globally. To help organizations understand and enable digital onboarding in a manner that is secure, compliant, reliable and scalable, Trulioo has created the Frictionless Compliance white paper. It covers topics such as:

  • The current customer onboarding landscape
  • Legal frameworks surrounding identity verification and compliance
  • Innovative tools and technologies to build better onboarding processes
  • Ways to streamline account creation and customer acquisition processes
  • Critical use cases for deploying effective digital onboarding in a way that is frictionless, flexible, secure and, above all, compliant