This Month in Retail Banking
Among the hurdles to a smooth account opening process are identity verification and information input. More banks are finding creative ways to streamline in order to reduce drop–off.
While important, customer data requirements such as anti-money laundering (AML) and know your customer (KYC) add friction to digital account opening – virtually all financial institutions have learned this the hard way. Failure to provide faster, smoother journeys generally results in customer abandonment, which has prompted many banks to find ways to streamline collecting and verifying this information.
According to the most recent Curinos U.S. Shopper Report, fully 68% of new accounts were opened digitally in 2022, up from 44% in 2019. That’s made successful digital onboarding an increasingly important area of focus and attention, even amid digital budget pressures being felt by banking institutions.
To reduce abandonment while mitigating fraud, leading providers are now looking to identity-verification steps compatible with mobile-friendly applications. These include using native mobile device features through autofill to scan ID documents, such as driver licenses, which not only reduces verification errors but can also link to DMV records to prevent fraud.
Advanced forms of document recognition and security enhancements such as this also allow the verification process to take place within minutes rather than the hours or even days it might take a bank representative to go through a manual check. Ease of use and prompt operations where difficulties are traditionally expected will motivate the user to proceed through onboarding.
With continually having to do more with less, FIs are looking for every advantage to attract, land and keep new customers. Using the latest technology to facilitate onboarding that optimizes the customer experience in the early going will be critical in setting the stage for further engagement and growth.
