Starting off on the right foot - the need for better onboarding verification

By : Laurie Gentz

June 12, 2018 12:00 PM

In today's highly competitive banking environment, making a good impression on customers and delivering the strongest experience right from the earliest stages of a relationship can play a key role in generating loyalty and reducing churn rates.


However, it seems that many banks are still struggling to achieve quick onboarding when it comes to helping customers move through the process easily. One of the biggest barriers to the success of these interactions is often the security and verification processes that must be completed.


Current processes 'painful for customers'


One of the key findings of a recent report from Business Insider Intelligence claimed that the current techniques used by banks to verify the identities of their customers during the onboarding process remain onerous and inconvenient.


Because banks face strict regulations when it comes to customer verification, many providers have established tough protocols that must be followed when onboarding customers. But while the research noted these are often painful for clients, their value from a security perspective is also questionable.


"The verification methods they use to remain compliant can actually end up putting customers' personal data at risk. This leaves banks with dented customer satisfaction, as well as security breaches and legal costs," the report stated.


This is a lose-lose situation for the banks, as they end up with frustrated customers for little-to-no discernible gain in terms of security. But the answer to this problem isn't simply to tilt the balance of verification checks more in favor of convenience over security - it's to make the processes themselves better.


Learning from more agile companies


The key for banks will be to develop onboarding and verification solutions that offer greater convenience and ease-of-use without compromising the accuracy of the tools. If they can achieve this, they stand to benefit from happier, more loyal customers, which will in turn lead to higher revenue and lower costs.


However, the benefits could extend significantly beyond this, and help place banks at the heart of an emerging online economy, where verifying people's identities will be essential for every transaction.


"Banks are already experts in vouching for people’s identities, and because they’re held to such tight verification standards, their testimonies are universally trusted," the research noted. This is a natural result of strict know your customer and anti-money-laundering laws that require banks to understand factors such as the intended purpose of an account - and gathering this information is a key part of the onboarding process. Therefore, if providers can successfully digitize this customer information, they will have long-term opportunities to ensure a relevant place in the digital economy, where individuals' online identities will be at the heart of almost everything they do.


To do this, they may look at the efforts made by technology firms. The likes of Google and Facebook, along with a host of innovative startups, have invested heavily in technologies to streamline customer onboarding and verification processes. Solutions including biometrics, optical character recognition, secure video links and blockchain have all helped deliver streamlined, intuitive services while retaining strong security credentials.


However, banks may face challenges to incorporate such technologies, as current regulations may restrict their ability to rely on third-party technologies - such as mobile devices - when verifying identities. Therefore, investing in their own solutions for this may well be the next step in improving these processes for customers.

Laurie Gentz

Marketing Manager, Fraud & Security Solutions

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Laurie is Financial Services Solution Marketing Manager at NCR. She is responsible for marketing NCR’s fraud solutions, with a specific focus on enterprise, cross-channel fraud.