Streamline data collection and validation with digital customer onboarding
Financial institutions in Africa have struggled to fully leverage customer data as an asset. The biggest challenges for financial institutions are: how to collect and store customer data, how to access customer data, and how to analyse it to better serve their customers with personalised products and digital experiences.
Manual onboarding of customers remains a significant bottleneck to building comprehensive and accurate data profiles of customers. Customer onboarding today, typically done in-branch or via agents, relies on customers filling up paper forms with the assistance of staff. This leads to errors on forms, incomplete fields, information entered incorrectly, or worst of all fake or fraudulent information that is hard to validate.
When the forms are processed and validated days later, there is significant back and forth to complete the information, high friction for customers, and unnecessary operational overhead for staff. This leads to poor operational efficiency, high costs and a frustrating experience for new customers.
- Challenges in onboarding customers for financial institutions
- Customer data is at the heart of digital customer experiences
- How digital customer onboarding streamlines data acquisition and validation
- Laboremus is helping financial institutions redefine their digital banking infrastructure
An automated, digital customer onboarding and identity verification process ensures that your customers enter the correct information during account opening, they upload appropriate identity documents and validate their personal details before the information is committed to your core systems.
With a digital customer onboarding process, financial institutions improve the quality of customer data captured on the first interaction and ensure that all data can be automatically validated to meet desired accuracy standards.
Challenges in onboarding customers for financial institutions
Global research shows that a staggering 9 out of 10 businesses experience some form of attrition during the onboarding process, with the banking sector experiencing the highest rate of drop-outs at almost one out of every four new customers.
Customers cite long and complex onboarding flow as a primary reason for abandoning their onboarding experience midway. This is a massive a loss of business revenue and also damages the company’s reputation in the market.
In our conversations with banks and other financial institutions across Africa, Laboremus has learnt that the top challenges facing operations teams for onboarding customers are:
- Verify customer identity reliably for KYC and KYB process
- Make onboarding faster and friction-free
- Transform account opening into a paperless process
- Collect complete customer data
- Ensure customer data is accurate and error-free
Customer data is at the heart of digital customer experiences
In face of the challenges though, there is clear evidence that using data to improve customer experience leads to exponential gains and reduced costs.
In a 2023 research by McKinsey & Company, the evidence showed a near 72 percentage point difference in Total Shareholder Returns between companies that were leading customer experience strategy (CX) vs. those that were considered laggards in CX.
Financial institutions can achieve similar gains by leveraging customer profile and transaction data, from multiple data sources including core banking, card and payments systems, open banking and cloud accounting software. By combining these data sets teams are able to create a holistic view of the customer, with a mission to improve the customer’s financial profile and to tailor products to customers’ needs
With sophisticated data analytics tools and AI, digital banks can provide personalised services and relevant offers at the right moment, through the right channel, and proactively provide for customers’ needs. Better data management and analysis helps financial institutions convey a strong brand promise and creates a competitive advantage based on customer experience leading to a clear differentiation in an increasingly competitive market.
In the 2023 analysis, McKinsey & Company found that customers find greater satisfaction with financial institutions that create a seamless digital experience and that leads to more transactions, higher engagement and increased profits.
Banks can deliver more of what customers want once they understand customers’ needs from their customer transaction data. However, achieving this level of digital proficiency requires a well-structured, error-free and exhaustive data set.
Existing paper-based customer onboarding and account opening processes make achieving that streamlined database a challenge. People make many errors on their forms, leave fields incomplete, place information in the wrong columns, or fill up fraudulent information. When this information is validated days later, there is a significant back and forth, high friction for the customer, and unnecessary operational overhead in the onboarding process.
This is where a digital onboarding process can create tremendous value for financial institutions and for your customers.
How digital customer onboarding streamlines data acquisition and validation
With digital customer onboarding, financial institutions acquire new customers by having them enter information digitally directly into their online user platform. The onboarding process can be setup on your website, in-app, and, crucially for Africa, in branch-assisted or agency-assisted environments.
An automated, digital customer onboarding and identity verification process ensures that your customers enter the correct information during account opening, they upload appropriate identity documents and validate their personal details before submission.
KYC checks are then performed in sync with government databases to validate the entered information and ensure your onboarding process meets all regulatory standards.
Crucially, digital onboarding process uses multiple data validation procedures to ensure that customer data is collected without errors and gaps. With better-designed form workflows, autofill steps that prevent asking users the same questions, real-time data validation of entered fields, user-friendly and interactive interface, and digital signatures, financial institutions can use digital self-onboarding to always collect comprehensive and accurate customer data.
As a final check, all user provided customer data is validated to ensure clean, accurate inputs and once added is automatically verified against centralised government databases. Only after the data is considered complete, accurate and properly formatted, it is committed to your core banking system.
The main benefits of streamlined data acquisition for financial institutions are:
1. Build accurate, error-free data sets
Getting the right data at the right time, looking at it the right way, and performing validations tests, has typically been a challenge for most financial institutions in Africa and globally.
With a digital onboarding process, financial institutions can design forms and fields that automatically enforce data hygiene standards from day one. For example, an e-mail field will only accept valid email IDs whereas a phone field will only accept standard ISD codes followed by numbers.
Citizen ID card fields can also be adapted to the specific format for that country. Similar data validation can be applied to nearly every field of the onboarding form. This level of data validation for nearly every field ensures that only clean and accurate data is captured at that first point of interaction with the customer.
With standardised an regularised data collection during onboarding, your data core banking systems are protected against gaps and errors in customer data.
2. Speed-up customer onboarding and account opening
Current manual processes for customer onboarding are high-friction. Typically, new customers need to visit a physical location - branch or agents, carry all their documents, stand in queues, wait for their turn, deal with paperwork, and they often end up making mistakes while filling up their details in paper forms.
The reality is that the current account opening process is too long. For a customer with manual onboarding it can often take multiple days and even weeks to get onboarded and start using their new accounts.
Digital onboarding removes these sources of friction from the customer acquisition process. When properly designed and secured, a customer onboarding process with complete KYC can be completed in minutes.
Faster onboarding is a source of competitive advantage among financial institutions as it engages the customer in that moment when they desire to be a paying client, and delivers instant gratification in return.
3. Significantly reduce the risk of identity fraud
Digital onboarding when implemented correctly with the right technology reduces the risk of identity theft and account fraud significantly. Identity verification technology can check identity documents against other data sources, like a credit bureau or government ID database. Evidently, these checks make it much harder for someone to use a fake identity for opening an account.
Digital onboarding is easy to customise to adhere to local regulatory requirements. There are various built-in security measures in digital onboarding to maintain strict security. Real-time security precautions are also taken; the biometric pattern of the face certifies the accurate online identification and life existence of the individual. Such security features lead to the prevention of identity theft and enhanced data security.
Digital onboarding in banking also helps to comply with anti-money laundering (AML) regulations. This is because identity verification technology can check identity documents against AML watchlists. This helps to prevent criminals from using your bank to launder money.
4. Create rich and detailed customer profiles
Leading financial institutions today are focused on delivering personalised experiences to their customers. A clear data collection strategy embedded within your digital onboarding process helps you to build detailed profiles of every customer so you can deliver a unique and targeted experience for them.
With a digital onboarding process, the task of creating rich and detailed customer profiles is majorly automated. By implementing data standards and by making important fields mandatory in the digital account opening process financial institutions can ensure that every customer fills up the key information necessary to serve them with personalised products and offers - either in that time or at a later stage.
Rich customer profiles help financial institutions understand their customers better. With a clear understanding of what their customers desire, financial institutions can move faster than competition to offer products and services that prioritise more personalised customer experiences.
5. Deliver personalised customer experiences
With sophisticated data analytics tools and AI, digital banks can provide personalised services and relevant offers at the right moment, through the right channel, and proactively provide for customers’ needs. Financial institutions can then combine customer profiles with customer transaction data to deliver more of what customers want.
Digital onboarding kicks-off an omni-channel banking experience across mobile, internet, and physical channels which banks and financial institutions can leverage as a focal point to offer a incredible user experience to their customers.
People with limited access to branches and online banking can still open an account in minutes using their mobile phones. With instant access to banking services, the bank can also better position the full suite of banking and credit services to this newly acquired audience.
6. Improve operational efficiency, reduce costs
Using a fast, automated customer onboarding process, financial institutions save a huge amount of effort and resources. These saved resources can then be repurposed for other more important aspects of the business.
With fewer paper forms and reduced data entering, the overall efficiency and efficacy of the process is also improved. Over time, customers require fewer visits to physical branches and agents. There are tremendous cost savings to be made by reducing physical footprint of your branch network and moving more transactions to a digital environment.
As digital onboarding collects data with higher accuracy and hygiene, IT teams also require fewer interventions to build a clean customer data set. This again makes the process more efficient, reduces costs and improves scalability.
Financial institutions are using automated customer onboarding platforms to move into a new age of digital transformation and become better operationally structured.
Laboremus is helping financial institutions redefine their digital banking infrastructure
Along with offering relevant products and recommendations, financial institutions have an opportunity to correlate customer data in a way that helps them “think for” their customers and offer services that truly improve customers' financial life.
Streamline by Laboremus helps banks and other financial institutions speed up the onboarding process and collect rich, error-free customer data for personalisation journeys. We power your growth by helping you acquire customers faster with reliable KYC / KYB and digital customer onboarding.
Partnerships with Government organisations makes Laboremus the most reliable identity verification and onboarding platform in Africa.
For more information on Streamline by Laboremus and our digital KYC, KYB and customer onboarding solutions, please visit www.laboremus.ug.
You can also connect with one of our product experts to understand how you can automate customer due diligence and onboarding for your organisation.