What is digital customer onboarding and why it is important?

The benefits of bringing in new clients through digital channels

03 Aug 2022 | 3 min

What is Digital Onboarding?

Digital onboarding is the online process of bringing in new clients. During the procedure, a person registers with a firm or government service to gain access to its products and services. They will provide their ID and, if necessary, biometric information such as a facial scan or fingerprint. A digital onboarding procedure allows a corporation to easily and securely identify a person.

Before remote onboarding became a thing, customers would frequently supply their data in person or via mail. The entire process would be time-consuming and costly. With digitalization becoming a critical aspect for practically all private and public enterprises, they all require a dependable and secure digital onboarding channel.

The customer onboarding process is strongly related to Know Your Customer (KYC) or Know Your Client (KYC). The terms are commonly used in finance, banking, insurance, and related industries. KYC and digital onboarding are terms that are frequently used interchangeably in other sectors. However, KYC is a vital client identification tool that businesses employ for their digital customer onboarding process.

Since staff employees do not have the opportunity to contact clients that were acquired via digital onboarding, it is critical to develop security processes to confirm that the users are who they claim to be.

We have gotten accustomed to shooting selfies or presenting photographs of our ID papers during onboarding as smartphones with high-quality cameras have become more common. While this is anticipated and required in financial services, it may also be deemed excessive in other fields.

Why is there a need for Digital Onboarding?

Customer expectations of banks and financial institutions have risen sharply as we've moved into the digital era. It's simple to imagine which option people would select when given the choice between spending time in a bank to create an account and doing it online in a matter of minutes. The onboarding process for new customers of financial institutions can have a substantial impact on customer satisfaction.

When it comes to acquiring new clients and maintaining their loyalty, the onboarding process is critical. This means that keeping things simple and fast is the key to success. Digitalization of the onboarding process has freed customers from physical restrictions and complex procedures, while also saving financial institutions money and increasing productivity. Clients are able to access financial services and products through their computers or mobile devices thanks to a process known as digital onboarding.

In today's rapidly changing financial world, creating a simple and engaging digital onboarding process is a worthwhile investment that provides a better experience for your customers. Data collecting may be simplified or even automated if performed correctly.

The Benefits of Digital Onboarding

1. Simplifying and accelerating the registration process

First impressions are really crucial. This first interaction will establish the tone for the rest of the product experience. Online onboarding simplifies the process and makes it clearer to new customers, leaving them with positive feelings. Improved data organization and user-friendliness are brought about when a corporation moves away from paper and into digital mode.

2. Speed

The digital onboarding process can typically be finished in a matter of minutes, which is a significant improvement over traditional onboarding methods, which can take as long as three weeks to complete.

3. Reducing Costs

Onboarding new clients will always need an investment of time and resources; however, conventional onboarding requires paperwork and printing, which digital onboarding substitutes without sacrificing speed. In addition, by shifting documents online, teamsHR are liberated to focus on more intricate business matters. This would not be the case if they were required to adhere to conventional onboarding procedures, such as signing paperwork in person.


4. Ensure Compliance

Digital onboarding allows you to continuously employ compliance procedures that efficiently assess and enroll consumers, sole proprietors, SME's, corporations, and nonprofits. In addition, they have access to a variety of business data, including registered company information, company structure, director details, and even credit scores.


5. Enhance Engagement

When digital onboarding is compelling, the working relationship becomes more productive. In such unpredictable times, the majority of workplaces are undergoing fast change; thus, your clients need the skills to adapt and guarantee their organization stays ahead of the curve. And when these procedures are digitized, they can be much more precisely polished and adapted to what customers actually want and how they respond when hiring your business.

Digital onboarding may be utilized by any company that desires to service clients online, but it is extremely essential for e-tailers, online merchants, and online-only financial institutions, which have no other way to sign up customers. Additionally, it is utilized in employee onboarding to manage remote workers, save time on paperwork, and/or digitally manage employee data.

Different types of Digital Onboarding

The utilization of an online platform for digital onboarding is something that may either be done in-house or contracted out. The process of identification and verification can be carried out entirely online and remotely.

Verification of an individual's digital identification is a safe process that makes use of a variety of different types of technology. In addition, this verification method adheres to a specialized set of regulations and compliance demands

The application of AI (artificial intelligence) technologies in cybersecurity tools for digital onboarding is common. These methods can provide a guaranteed high level of security. In order for businesses to avoid falling out of compliance and maintain a high degree of safety, digital onboarding in many regulated industries, such as the banking industry, necessitates that businesses adhere to particular rules.

Onboarding is related to the know your customer (KYC) guidelines, which are used in the financial sector, along with other industries, as a customer identification tool that can be used in the process of digital onboarding. Onboarding is related to the KYC guidelines because KYC is an acronym for "know your customer."