In the coming years banks will inevitably experience a massive shift from physical to digital channels. If they want to remain relevant and retain existing customers, they should aim to do so sooner than later as most disruptive banking services are already utilising digital customer onboarding.
The urgent need for banks to re-evaluate their current processes in order to keep up with disruptive banking services is clearly evident. We examine three reasons why digital customer onboarding is essential:
Improves customer experience
No matter what business you’re in, if you make your customers happy, they will come back for more. A good customer experience is essential as it gives a customer a glimpse of what they can expect from you in the future. If your bank offers a digital customer onboarding system that is quick, simple and easy to use, you’re almost guaranteed to give your customers a great experience.
The customer onboarding process is the first step in the relationship between a customer and a bank. This process is extremely important as it will determine how much faith the customer will put into the bank, not just for the product they are applying for but for other products and services.
Increases operational effectiveness
The digital onboarding process can help banks reduce the amount of time and money spent on paperwork. Digital onboarding decreases dependency on physical branches, as customers no longer need to visit physical branches to access certain services. This also allows banks to grow their client basis as they can reach people in different areas. With a digital onboarding process, banks can reduce the time-consuming processes that come with the traditional onboarding process of filling out a number of forms and files.
Makes way for financial inclusion
The World Bank estimates that there are approximately 1.7 billion people (one third of the world’s population) who do not have access to financial services. This is due to a number of reasons, including lack of trust, physical banks are too far to travel to, the process of opening a bank account is too difficult, or they simply do not have the correct documents. A digital customer onboarding process can assist with banking a large portion of the unbanked population as there is no need to travel long distances, complete difficult paperwork and produce physical identity documents (ID). Making use of a digital ID with an electronic Know Your Customer (e-KYC) and digitising the customer onboarding process will make it extremely easy for anyone to open a bank account, including those in remote or rural areas where physical branches are non-existent.
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