In today’s world of cut-throat competition, every interaction with the customer matters as it provides you with an opportunity to leave an everlasting impression on them. Almost all the major companies in the world believe and implement this philosophy.

1. Future of customer
onboarding in banks

2. oIn today’s world of cut-throat competition,
every interaction with the customer matters
as it provides you with an opportunity to leave
an everlasting impression on them.
oAlmost all the major companies in the world
believe and implement this philosophy.

3. oThere are many companies that have extensively
focused on customer satisfaction by offering
innovative products and services.
o For example, alibaba and amazon have changed the
way people shop.
oSimilarly, whatsapp and facebook have changed the
way we connect with people across the world.

4. oNowadays, customers put banks and financial
institutions at a very high standard and expect
premium digital experiences in return.
o Customers want an omnichannel presence.
Moreover, they also want everything in real-time.

5.  What is client onboarding?
o Client onboarding can be simply defined as the entire process through
which a user starts his journey as a customer or a client of a bank/
financial institution.
o Similarly, the onboarding experience can be defined as the
relationship between the customer and the organization.

6. oCustomer onboarding is crucial as many key
variables such as experience, referrals, client loyalty,
and profitability directly depend on it.
oIn the current process, there are multiple parties or
departments involved which are within the
organization like credit, operations, compliance,
legal, front office, risk, tax, and other important
functions.

7.  What are the challenges associated with the
current client onboarding process?
o According to the forrester consulting survey estimates, a
client is contacted ten times on an average during the entire
onboarding process.
o Furthermore, they are also asked to submit their
documents which range from five to hundred.
o Let’s have a look at challenges associated with the current
client onboarding process.

8.  Absence of a structured process
o Client onboarding follows various processes within the
departments like legal, credit, and operational.
o One important thing to note here is that each compliance
officer of these departments has its own interpretations
pertaining to the regulations.
o Such different interpretations can get customers confused
as to why they should provide the same information at
various points of the process.

9.  Changing regulations
oRegulations keep on changing on a monthly or even
on a weekly basis.
oThis is why banks must adapt their systems in
accordance with the regulations.
oThis poses a great challenge for the banks as they
don’t only have to explain the changes to the client
but also have to ensure that they are amended in
the onboarding process.

10.  Culture
o Financial institutions and banks all across the globe want to
get close with their customers.
o However, the lack of drive to understand the changing
needs of customers along with dynamics and
underinvestment in strategic opportunities have proved to
be a great barrier.
o As per the mckinsey’s recent survey, for top global
executives around the world, culture accounts
approximately 33% among the other major barriers to
digital effectiveness.

11.  Access
oAs the usage of modern technology increases in the
banks and financial institutions, there’s a pressure
on banks to provide every service on a real-time
basis.
oNowadays, an average customer expects to access
all the banking services on their smartphone so that
they can avoid visiting the bank branches.

12.  Time-consuming processes
oThe client onboarding is a time-consuming
process as there is a multitude of
documents required.
oAlso, there are multiple touchpoints
involved in the process which contributes to
the overall time consumption.

13.  Quality
oAccording to pwc, the whole remediation
exercise of customer shows that the due
diligence process varies for each entity from
country to country.
oThus, this can cause a huge variation in the
quality of experience within a single financial
service entity.

14.  Future of client onboarding
o To overcome all the above challenges, financial
institutions and banks are now moving towards
cutting-edge technologies to improve their
efficiencies.
o It helps them to kill two birds with a stone as they
can satisfy regulatory standards and offer a
seamless experience to their end customers at the
same time.
o We are gradually progressing towards open
banking, we might see client onboarding utilizing
the following means in their future model.

15.  Artificial intelligence (AI)
o Artificial intelligence is the technology with the help of
which the computer software can make human-like
decisions.
o Many companies are using this technology for their benefit
like paypal which has reduced its false fraud alerts by
almost in half with the help of an ai monitoring system that
identifies benign reasons for bad behaviour.
o , Hsbc has also decided to pledge $2.3 billion in AI
technology.

16.  Blockchain
oBanks and financial institutions can use distributed
ledger technology (DLT) like blockchain for the KYC
process that would enable users to manage their
digital identity with high-grade security.
oMoreover, it can also help financial institutions and
businesses to efficiently manage data with reliability
and ease.

17.  Digital identities
o An electronic identifies that can verify if you’re the one who
you claim to be. This technology is already underpinned by
singapore’
o Electronic identification and trust services for electronic
transactions regulations 2016.
o It’s meant to encourage transparency and interoperability
across various entities in the country.

18.  Biometrics
o These are inherent characteristics of an individual which are used for
recognition purposes. These are based on his/her behavioural or
physical traits (face ID, fingerprint, voice recognition, iris scanning).
o Biometric technology is already being used by some big banks like
bbva, maybank, ocbc, etc; however, it’s yet to gain across the board
acceptance.
o Iphone x has come up with its face id and is making a huge claim that
only one out of a million can be duplicated. One must not be
surprised if this becomes an industry-standard in the near future.

19.  Data collaboration
o AS per the chartis risktech100 research 2015, around 71%
of the respondents accepted the fact that there was a need
of integrating some of the anti-money laundering (AML)
and anti-fraud systems into a single technology
environment.
o This will help financial institutions to mix their external and
internal client data and thus gain useful insights into their
clients.

20.  Conclusion
o It’s important to understand that focusing on the
customer experience will be the key for banks and
financial institutions as it will compel them to change how
they engage with their customer base.
o In order to keep attracting and retaining their customers,
they must keep reinventing themselves, innovate, create
excitement, and most importantly focus on the
improvement of customer service.

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