Remote Onboarding and FinTechs: Is Success Related?

The digital transformation was well on its way, but the COVID-19 pandemic pushed it into overdrive. Businesses regardless of their industries were forced to go into overdrive and build robust technological solutions. This helps in building digital workflows. Advancements in AI and data solutions have helped banks, financial institutions, and other businesses to take their business operations online. The majority of businesses are now realizing the vitality of technology and providing online technologies to their customers. Providing technological solutions isn’t enough, they have to provide a first-class digital experience.

Pandemic has pushed people inside their homes. Businesses have to rely on video conferencing, remote connections, thus remote onboarding is becoming crucial. People from all over the world can stay connected to each other using technology. 

Consequently, businesses have no choice but to innovate and scale using technologies. Remote onboarding of customers and merchants is crucial to gaining success.

Traditional Onboarding: Drawbacks

When onboarding new customers, some type of ID verification needs to be done. Before the pandemic, businesses used to rely on the verification of ID and address documents. This age-old process was time-consuming, full of errors and fraudsters could easily trespass the verification process. It is hard to distinguish between fake or stolen documents and original ones. Customers who get stuck in a manual process have to face a poor onboarding experience. They’re more than likely to move to a competitor that offers seamless online onboarding. 

As of 2021, most people aged between 20-34 live with their parents. This is why they lack proper documentation to sign up for services. Students are another part of the population that struggles greatly with the document-based sign-up process. 40% of students claim that it is inconvenient for them to provide a copy of a bank statement. While over 25% claimed that it would be impossible for them to provide a copy of a recent utility bill under their name. 

The environment is rapidly changing and utilizing old data to verify customers is not suitable. Banks, Financial institutions, FinTechs, and others need to utilize other data points to complete their verification process. This is crucial before onboarding a new customer.

FinTechs and Remote Onboarding Process

Technology-based financial services are without a doubt the future of the financial industry. By 2030, most of the day-to-day financial activities will be done using online methods. 

Eliminating the hurdles created by traditional methods of onboarding led to the birth of innovative technologies to improve the process. Thin filed customers who lack the proper documentation often face trouble with the customer onboarding process. That’s why utilizing a wider range of data sources can be used to draw insights into a consumer’s financial profile and if they pose any risk in the future. Using alternative data instead of traditional data can include mobile phone usage, monthly payment schedules, social media activities, biometrics data, and so on. 

FinTech companies are growing by capitalizing on this need for alternative data and new methods of verification. Since the need for remote onboarding is growing, FinTechs all over the world is trying to come up with a way that can change the landscape of the industry forever. 

Smartphones can be used to verify customers during the onboarding process and can improve the security of the process. But, businesses that require customer history and other data to verify customer documents can’t utilize smartphone data to onboard new customers and clients. Most companies have an overcomplicated process that can lead to an increased rate of customer drop-off during onboarding. 

If companies fail to capitalize on the opportunity of the changing landscape, then they’ll soon be left in the dust. By making the onboarding process automated and without friction, banks and financial institutions can change the pace of the industry.

How DIRO Can Help? 

Onboarding customers require complying with KYC and AML regulations. Most firms fail to comply with KYC and AML guidelines due to a lack of proper solutions or data required to comply with these regulations. Integration of technologies in the manual workflow and utilization of alternative data are two ways how companies can enhance the remote onboarding process. Although, achieving all this is tough, time-consuming, and expensive. 

DIRO helps in streamlining the remote onboarding process by verifying customer documents online instantly. The technology has access to several governments and private servers and consequently can verify if the document is real or not by cross-referencing the data on documents. By using DIRO online document verification software businesses can overall the customer onboarding process. This is done by streamlining the most important part, i.e., document verification. 

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