Digital customer onboarding journeys

Optimising the digital onboarding experience allows to convert more customers into borrowers, more efficiently, more responsibly, and with lower regulatory risk.

What is digital customer onboarding?

In today’s increasingly digital world, customers have come to expect fast and convenient digital journeys. The most common is a checkout journey, it’s a simple process where the same information is asked of everyone who takes part in it.

An onboarding journey is different. It has to answer the question “Am I able to serve this customer?”. They seek to understand who is requesting the service and assess whether the applicant is suitable for the product or service and vice versa.

Customer onboarding is especially important for risk orientated businesses such as financial services and lending. Businesses that need to verify their applicants’ identity by performing customer due diligence (CDD) assessments, following KYC and AML guidelines.

The most common customer onboarding challenge for these businesses is to mitigate risk – regulatory risk, commercial risk, fraud risk. Onboarding is essential when involving complex products and services, where customer circumstances define the right product for them.

How to manage lending risk painlessly ►

What challenges does onboarding present?

Every digital business knows that the central metric to measure digital journeys is conversion. Optimising conversion involves removing all friction, anything that might get in the way of journey completion. However, onboarding journeys often aim to introduce friction, acting as a barrier that only lets certain applicants through.

Customer onboarding has to focus on the things that make someone different and understand those differences in depth.

Digital onboarding journeys must embrace complexity and diversity. Oversimplifying leads to a poor understanding of the customer’s circumstances. However, complexity increases friction. So, the challenge for onboarding is to accept the complexities, adequately explore them, but always minimise the inevitable friction it creates.

Today, most onboarding processes treat everyone largely the same. They are prescriptive, ask the same questions and request the same data. They are inflexible, predefined and coded. Changes are slow and expensive. Business understanding and innovation goes far faster than technology’s capability to adapt.

What does good onboarding look like?

It understands that every applicant is different and complex. It only asks relevant questions to get the right information required for each individual. It knows when digital interaction is appropriate, and when to get people involved. It is as long as it needs to be, but as short as it can be.

Good onboarding is flexible.

Flexible in terms of how it engages with the customer. Flexible in its questioning, in its decisioning, in its outcomes. Flexible in terms of how it can be adapted, and who adapts it.

The paradigm must reverse. Hard coded journeys can’t prescribe what analytics has. Analytics has to drive dynamic journeys that execute what it needs. Onboarding processes must move from being controlled by IT to being controlled by commercial teams.

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