How to digitize onboarding for the social distancing era

May 6, 2020

After a grueling few months mitigating the spread of the Coronavirus, billions of people around the world are re-emerging from extended stays at home. As we take careful steps to reopen the economy, health officials strongly recommend to keep practicing social distancing and avoiding unnecessary trips in public to help contain the virus.

Yet, just because our social habits are radically changing, this doesn’t mean that Know Your Customer (KYC) requirements are too. Certain industries such as financial services, utilities and even tourism are still required by law to perform identity verification when onboarding a new customer. Under the old model, this process meant that a customer had to be physically present in a bank or storefront and hand over an official document to a company representative for authentication. It’s safe to say that this way of carrying out ID checks is incompatible in the social distancing era

For retail financial service companies, this mis-match between regulatory obligations and public health duties poses a serious problem. On the one hand, people need better banking and money transfer services more than ever before. On the other, the current tools are ill-equipped to protect customers and workers alike from the Coronavirus. How then, can firms continue to grow their customer base while practicing social distancing? 

Knowing someone in the age of social distancing 

Fortunately, and this may sound corny, there’s an App for that. A multitude actually. In most legal jurisdictions, identity verification requirements focus on two distinct processes: validation of ID documents, and anti-money laundry checks. While traditionally these tasks were carried out by  hand, they can now be automated using software. 

These tools ‘outsource’ the KYC tasks directly to the customer using a well-designed app or modern web interface, with a specialist third party’s tech performing the identity verification.

It’s not hard to imagine how this interaction will look. For example, imagine that you want to open a new bank account. You go onto the bank’s website to find information about opening an account at a nearby branch. However, on the “branch locator” page, a notification pops up asking if you would like to become a client using their app. As you’re mindful not to go outside unless necessary, you download the app and get started opening your new account.

The app guides you through an intuitive series of onboarding questions. After entering your contact details, the app asks you to confirm your identity using a two-step process. Using your  phone’s camera you scan your government-issued ID and snap a selfie. In seconds, the app confirms your ID, letting you finalize the onboarding process. 

You sign the contract with a newly-created pin and receive a notification that your new bank card will arrive in the mail within the week. In total, you spend under 15 minutes opening your new bank account. Further, you never had to go to a branch office, allowing you to practice social distancing from your kitchen table. In the meantime, the bank performs a credit risk assessment, so it knows how to develop their relationship with you, which means you’ll get a customized experience with them from day one.

How to digitize the onboarding process to thrive in the pandemic economy 

The scenario above is a game-changer for retail companies since new customers can sign up from the comfort of their sofa. 

That said, only the firms that build a meaningful user experience will convince would-be clients to trust a digital onboarding process. Getting the UX recipe right requires focusing on three key points.

First, any tool doing identity document authentication should be as effective as its off-line alternative. Otherwise, the manual re-verification will increase costs, decrease onboarding agility, expose the company to potential fraud, and leave a sour impression with new clients.

Second, the process must be fast. Consumers already have short attention spans. If an app process takes longer than a few seconds to run, users will lose interest, which negatively impacts conversion rates.

Finally, the UX flow should be both trustworthy and unobtrusive. These days fraud is sadly increasing during the pandemic, making the former even more important. Customers will look for a balance between respecting their privacy, protecting their personal data while not being over-burdensome. If a firm does not find this equilibrium, then consumers will turn to a better-designed alternative.

For the foreseeable future, the companies that adapt their business practices to the reality of our health crisis will be the ones thriving in this era. Consumers will insist that their health and safety come first. This insistence means that utility companies, banks and other financial service providers must build viable digital alternatives that enable social distancing. 

Re-imaging and digitizing the onboarding process is an excellent starting point. However, it’s clear that just thinking about it isn’t enough. Consumers will also be looking for certainty and transparency in uncertain times. The only way to assuage these concerns is by coupling superior UX design with trusted third-party tech. The firms who get this formula right, will not only be helping the world recover from the crisis by enabling social distancing, but also benefit from new business opportunities in the future. As consumer demands for shorter and more convenient onboarding processes continue to rise, adapting your businesses for digital onboarding now will help you attract more customers, even after the crisis is over.


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