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What is digital onboarding in banking?
The digital onboarding process is becoming increasingly important for both customers and banks.
For customers, digital onboarding represents a quick and convenient way to open an account or sign up for new services. And for banks, it can lead to increased customer loyalty, higher customer satisfaction levels, and lower costs.
However, digital onboarding in banking presents greater challenges in terms of data protection. In fact, opening a bank account, logging in via home banking and online transactions require stronger identity verification and authentication methods. In addition, the handling of numerous sensitive data and financial details requires banks to make greater efforts in terms of cybersecurity.
In general, digital onboarding in banking refers to the use of digital channels, such as online banking portals or mobile apps, to onboard and retain new customers.
What is customer onboarding?
Customer onboarding is the process of introducing new customers to a company’s products or services. The goal is to help customers get started with using the product or service and to ensure that they have a positive experience.
However, customer onboarding also has another goal, which is customer retention.
Providing new customers with a positive and unhindered initial experience serves to build trust. But this positive experience must continue even after the customer has purchased the product or service.
In other words, customer onboarding goes beyond the first contact between company and customer and ends when the customer has the opportunity to see the real value of what they have bought.
Many companies make the mistake of stopping at the customer acquisition phase. Then, they abandon customer to themselves. Unfortunately, at the first difficulty or dissatisfaction, they turn to a competitor.
Advantages of digital onboarding in banking
Digital onboarding in banking offers numerous advantages for customers:
- It is a quick and convenient way to open an account or sign up for new services.
Customers can do this from the comfort of their own homes, without having to go to a physical bank branch. In addition, digital onboarding often requires less documentation than traditional methods, which can save customers time and effort;
- It offers greater transparency.
Customers can see all the steps of the process and are often given more information about the products and services they are signing up for. This can help to build trust between customers and banks;
- Digital onboarding often leads to lower costs for customers.
They no longer have to pay for document printings or for travels to and from a physical bank branch.
Digital onboarding in banking also offers numerous advantages for banks:
- It can lead to increased customer loyalty.
Customers who have a positive digital onboarding experience are more likely to stay with a bank for longer. In addition, digital onboarding can lead to higher customer satisfaction levels since digital onboarding includes all the activities and contents that help them to use the bank’s products and services;
- Digital onboarding helps banks to save money.
As we mentioned above, digital onboarding often requires less documentation than traditional methods. This can lead to lower printing, postage and archive costs for banks;
- It helps banks to save on staff time.
Bank staff no longer have to spend time processing paper applications and can instead focus on providing customers a personalized experience.
Overall, digital onboarding in banking offers many advantages for both customers and banks. However, it is important to remember that digital onboarding presents greater challenges in terms of data protection.
An effective digital onboarding in banking
Digital onboarding in banking is still in its early stages, but it is quickly gaining popularity. Here are some tips for setting up an effective digital onboarding that also guarantees optimal data protection:
- Make sure to have a clear understanding of the customer’s needs and goals;
- Design the digital onboarding process with the customer’s convenience in mind;
- Make sure to have a plan in place to support customers who need help along the way;
- Implement strong security measures. This includes ensuring that all customer data is encrypted, and that bank staff are trained in data protection best practices;
- Define robust procedures to deal with data breaches;
- Monitor digital onboarding for signs of fraud or abuse. This will help to quickly identify and deal with any suspicious activity;
- Create home banking user-friendly apps and web portals. Share with customers tutorials and blog posts, or use chatbots and virtual assistants to give them all they need to understand how to use your tools. Consider that 8 in 10 users say they’ve deleted an app because they didn’t know how to use it;
Digital onboarding in banking also includes Digital Transaction Management (DTM), i.e. the simplification of the identification and authorization processes of each economic transaction. To do so, banks must equip themselves with cloud systems for the exchange and archiving of documents, methods of strong authentications, but also use legally binding electronic signatures and time stamps.