back
The Importance Of Digital Consumer Onboarding For The BFSI Sector
FinTech InsurTech

The Importance Of Digital Consumer Onboarding For The BFSI Sector

By Rajarshi November 28, 2022 - 54 views

Digital customer onboarding is something of a game-changer for the BFSI (banking and financial services) sector. From customer onboarding software to rapidly evolving customer onboarding frameworks, there is plenty being done by financial institutions to simplify and streamline the procedure.

Which brings us to its importance- Why is customer onboarding so vital?

What Is Digital Consumer Onboarding? 

What is consumer onboarding? This procedure has completely transformed the way in which organizations link up with customers. The banking sector can now readily ensure friendlier processes for customers without multiple physical checks and other verifications.

Customers can now easily fill up their details, upload necessary KYC and other documents, and wait for approvals. Everything else is done online. 

Manual customer onboarding in retail banking would otherwise involve a multitude of processes, including filling up several forms, submitting copies of documents after photocopying them, and also verifying information and identities manually. It would also require a few visits to the bank.

This will take major time, and when it comes to big companies or corporates, it may go up to months! Customers in the digital system can simply sign up at their convenience anywhere and that too without a branch visit.

Automated systems verify consumer data to seamlessly facilitate the process. Some of these operations include digitally automated Know Your Business (KYB) or Know Your Customer (KYC) checks, along with Anti-Money Laundering checks as well.  Even signatures can now be done digitally, thereby speeding up the entire process. 

Key Challenges In Traditional Onboarding Process In Banking 

In spite of evolving B2B customer onboarding best practices or even changes in the B2C category for BFSI players, some challenges still remain. These include the following 

  • Non-user friendly forms which require a lot of time and effort. 
  • Regulatory issues where customers still have to go to branches. 
  • High rates of switchovers to other banks or abandoning applications quickly. 
  • Growing account related frauds.
  • Lack of personalized offerings/services for customers. 

Future Of Digital Consumer Onboarding Process In Banking 

The future is clearly the following: 

  • Better e-KYC procedures that can now be done in 3-4 minutes or even lesser time. 
  • Omnichannel onboarding experiences for consumers can begin almost anywhere and switch to other platforms anytime in the process. This could help reduce dropouts in the process. 
  • Lower physical presence of BFSI players, with more consumers anticipated to completely eliminate or lower visits to branches. 
  • Tech-driven personalized digital interactions via more responsive and interactive Chatbots, and other virtual communication with relationship managers. 
  • Real-time tracking and digitization with quick approvals and decisions on on-boarding. 
  • More use of AI-driven technologies for onboarding including RPA for operational jobs and customer support functions. More financial institutions will go in for NLP, bots, and VR/AR along with computer-vision technologies for the future. 
  • The whole onboarding process will have integrated analytics for getting invaluable insights. 

Why Banks Should Streamline Consumer Onboarding?

The answers are quite simple: 

  • To gain more customers with better acquisition rates. 
  • To prevent potential customers switching to other players due to complicated consumer onboarding processes. 
  • To enhance their efficiencies and productivity levels. 
  • To save time and energy for all stakeholders involved. 
  • Boost internal workflows with insights, full data access and seamless collaboration internally. 
  • Lower expenditure and rates of attrition. 
  • Better customer experience

These are some of the compelling reasons for BFSI players to embrace digital onboarding frameworks at the earliest, while paving the way towards improved consumer experiences and building up their customer bases accordingly.