What is digital onboarding?
In its broadest sense, digital onboarding is a process that involves creating an online environment to welcome customers, employees, or partners and make their transition to accessing your business and its services smoother and easier.
It typically involves creating digital identity credentials, providing access to systems, software and other resources that are needed for the successful implementation of digital services. Digital onboarding can take many forms including setting up accounts, filling out forms, taking quizzes and more.
For regulated businesses, it also involves carrying out Know Your Customer (KYC) processes that establish and verify customers’ identities. This is an essential component of Anti-Money Laundering (AML) protocols and regulatory regimes across the world.
The main benefits of digital onboarding are that it saves time and money while increasing customer satisfaction and engagement. Organizations no longer need to print paperwork or take long phone calls to complete the onboarding process as everything can be done digitally in a matter of minutes.
Additionally, with digital onboarding organizations can customize the experience by offering tailored content or documents based on individual user profiles. This allows for a personalized experience that will help build customer loyalty.
Finally, digital onboarding provides better security and transparency as users can sign all required documents electronically with legally binding signatures. Organizations don’t have to manage paper records or worry about them being stored securely as all data is kept safe in the cloud in a consistent and organized format.
The system also tracks all activities so organizations can be confident that no changes have been made without authorization from the user who signed off on them. More advanced digital onboarding solutions also provide ongoing monitoring capabilities that periodically check for changes to a customer’s KYC data that can affect their risk profile.
How to digitize onboarding?
Digital onboarding is becoming increasingly popular among businesses as a means of streamlining and simplifying the customer onboarding process. By using automated KYC solutions, businesses can securely verify the identity of new customers quickly and efficiently.
Automated KYC solutions use modern technology to scan and validate personal documents such as passports or driver’s licenses, reducing the reliance on manual processes that are both time-consuming and costly.
With automated KYC solutions integrated into their digital onboarding process, businesses can easily compare customer data against multiple reliable sources in order to obtain accurate results. Furthermore, these solutions help businesses comply with regulatory requirements by ensuring that all customer data is securely stored and encrypted.
By synthesizing these capabilities in an end-to-end onboarding process, automated KYC solutions offer businesses an effective alternative to manual processes while helping them ensure the safety, security and compliance of their operations.
KYC and identity verification (IDV) checks are common steps used in digital onboarding processes.
- KYC checks help businesses confirm the identity of their customers by verifying personal information such as name, address, date of birth, and other data points through a variety of methods.
- IDV verifies that the customer is who they say they are by using biometric technology such as r facial recognition and liveness detection.
Both KYC and IDV checks help reduce risk for financial organizations and other businesses, allowing them to prevent fraudulent activity and money laundering. The checks also ensure compliance with applicable laws and regulations. In addition to helping protect against criminal activities, KYC/IDV can also help create better customer experiences by providing a secure and efficient onboarding process that also builds trust among customer communities.
There are a number of different KYC/IDV methods available, including document-based methods such as passport or driver’s license scans; mobile-based methods such as SMS-based one-time passwords (OTPs); or video-based methods such as remote video interviews with a human being. Each method has its own associated advantages, disadvantages and costs so it’s important to consider which method best suits your organization based on your specific needs.
Benefits of Digital Onboarding
By leveraging digital KYC onboarding, businesses can save significant amounts of time and money on customer authentication processes — when compared to manual procedures.
Digital KYC onboarding also reduces the possibility of human errors associated with manual procedures, thus eliminating potential revenue losses due to incorrect customer data entry. Additionally, digital KYC onboarding typically allows for a much faster verification process than manual methods, which helps to streamline the customer experience, reduce customer wait times and minimize abandonment rates.
From a security standpoint, digital KYC onboarding eliminates the need for businesses to store sensitive personal information on paper or other physical forms of identification.
This prevents any potential risks that may arise from compromised files or unencrypted data storage systems. Moreover, digital KYC onboarding also offers stronger encryption protocols than manual methods due to its use of multiple layers of biometric verification such as facial recognition software or fingerprint scans.
In addition to offering enhanced security features and higher levels of accuracy compared to traditional methods of authentication, digital KYC onboarding can also improve the customer experience by further streamlining the process and reducing dependence on paperwork or physical forms of identification.
By enabling customers to complete their profile quickly and securely online instead of via paper documents or in-person interviews, businesses can offer a much improved level of convenience for their customers while simultaneously improving operational efficiency within their organization and remaining compliant with complex and evolving national and international AML regulations.
How KYC-Chain can help
Digital KYC onboarding is an incredibly useful tool that can help regulated businesses such as Financial Institutions and VASPs improve their security protocols — all while simultaneously enhancing customer convenience and operational efficiency. With its ability to save time and money while providing advanced levels of accuracy and security compared to traditional methods of authentication, it’s no surprise why many companies are now making the switch over to digital KYC onboarding.
KYC-Chain’s end-to-end digital onboarding solution provides our clients from diverse industries with a one-stop-shop for all of their KYC/AML compliance and anti-fraud needs. If you’re looking for a solution to optimize your onboarding process, get in touch and we can tell you all about it.