As the COVID-19 pandemic continues to sweep worldwide, most sectors, including the financial industry, were severely impacted. Lockdowns brought a sudden halt to store footfall and physical services. The silver lining in the pandemic is the acceleration of digitization throughout as many processes as possible. In financial services, digital customer onboarding – a process that has long been in deliberation due to regulation and compliance – became one of the most urgent items to overcome.
According to Accenture, the global payments industry has proven to be resilient despite the pandemic as consumers continue to trust payments systems and providers. Some banks even experienced multi-fold mobile banking app downloads as compared to the days pre-COVID-19.
Why Is Digital Customer Onboarding Imperative?
A Mastercard survey shows that Malaysia registered a 40% penetration in e-Wallet usage during this period. Despite the ease in the movement control, the digital experience continues to be the preferred consumer channel. Given the uptick in digital payment acceptance, digital customer onboarding has become essential for banks to continue their customer acquisition efforts regardless of physical lockdowns.
How to Onboard A Customer Digitally?
Traditionally, a customer must be physically present at the branch to complete an in-person Know-Your-Customer (KYC) process. The bank employee would verify the person physically before accepting their application for account opening. Undeniably, the process is tedious for the customer, time-consuming, and costly.
With the advent of Artificial Intelligence (AI) technology, we can now help the bank onboard their customer remotely. INFOPRO’s Digital Customer Onboarding platform fulfills the compliance requirements of eKYC and Anti-Money Laundering (AML). The platform provides a frictionless customer experience during onboarding. With AI Credit Scoring features, customers can even obtain instant loan application approval without human intervention.
Challenges With Compliance
Currently, the compliance requirements for eKYC differ by jurisdiction. It is mostly affected by the readiness of the underlying infrastructure in supporting a complete eKYC process. Hence, the adoption of digital customer onboarding differs from country to country, depending on its digital maturity. It can be as simple as uploading a basic photo and documents to performing advanced biometric verification using facial recognition techniques. In countries where there is a matured Digital Identity such as the SingPass and MyInfo in Singapore, the eKYC process is even more seamless as it is made available by the government itself.
4 Steps In Advanced Digital Customer Onboarding
Step 1: Validate the customer’s ID
By submitting a photo image of the government-issued IDs, the platform will be able to validate the security features of the ID to ensure authenticity. It will fetch the basic information printed on the IDs to ease the human input during the application. The system can support multiple IDs, typically the National Registration Identification Card (NRIC), Driving License, and any locally recognized IDs. As for the foreigners, the platform supports onboarding with an International Passport.
Step 2: Validate the customer’s selfie
One can validate the customer’s selfie image by matching with the one printed in the ID. The system takes into consideration the facial recognition factor, including aging, different hairstyles, glasses, and other factors.
Step 3: Liveness verification
This process ensures that the customer is a live human, eliminating the possibility of presenting someone else’s image.
Step 4: Anti-Money Laundering (AML) name screening
The system will check on the customer’s name against the sanction list according to AMLA requirements.
Digitize Your Business
Digital customer onboarding is the new generation of banking. It is an essential feature for all the new digital challenger banks, which typically operate in branchless mode.
Among the pioneers in the digital challenger banks, Airstar, MOX, Za Bank, and Livi Bank in Hong Kong have adopted the digital customer onboarding strategy for their aggressive customer acquisition plan. Back in Malaysia, Bank Negara Malaysia (BNM) has issued the eKYC guidelines in July 2020 as part of preparing the new virtual banking framework to be issued later next year.
The incumbent banks must keep up or face the threat of losing the digital customer segment to new challenger banks who can offer digital onboarding services. Thus, enhancing its existing banking platform with digital customer onboarding is the top priority for protecting its market leadership.
INFOPRO’s digital customer onboarding is designed especially for effective customer acquisition at a lower cost and frictionless customer experience.