In the not-so-distant past, onboarding new customers was an in-person task. Simply put, onboarding is the process of integrating and familiarizing a new customer or client with a brand’s products and services. Customers could visit a brick-and-mortar location, provide physical proof of identity verification, and were issued new accounts. The process was bulky and full of paperwork, but straightforward and sufficient. In our modern economy of digital transactions, businesses must maintain equally stringent identity verification in the onboarding process without meeting their customers in person. In theory, this seems like an accomplishable goal…yet many businesses are losing more than half their potential customers to a faulty onboarding process.
According to a 2020 Signicat study that surveyed 4,000 European consumers across seven countries, 63% of consumers quit the onboarding process mid-application, with some countries losing an incredible 70% of consumers during onboarding. If the onboarding process is inconvenient, too lengthy, or too invasive, customers may lose motivation and walk away from a brand entirely. This massive loss of new customers not only negatively affects a brand’s reputation, but some consumers reported that they were also less likely to attempt onboarding in the future and would also warn friends to choose a different business as well.
The Challenges of Digital Onboarding
As pandemic lockdowns continue in portions of the world, large segments of consumers are unable to physically visit business locations to open new accounts in person. Additionally, modern consumers expect that in this age of digital shopping, they should also be able to seamlessly open and use digital accounts. This means that businesses around the globe need to understand one critical truth: if businesses want to survive and thrive in today’s economy, they must prioritize and provide frictionless digital onboarding. Consumers need a simpler solution than an outdated onboarding process. They want a more streamlined, digital path to apply and provide identity verification for new accounts, and they aren’t wrong for having these expectations.
Younger generations like Gen Z have grown up alongside the breakneck speed of social media, where new accounts can be created and launched within minutes, and they expect the same smooth onboarding experience from online businesses. When they are instead met with lengthy identity verification and documentation processes, they lose interest and walk away, searching for a different provider that can meet their needs more quickly and easily. In fact, a staggering 32% of consumers will refuse to even start an application if it requires in-person identity verification and 22% are put off by too many detailed identity verification requests.
While it may be tempting to dismiss or downplay the expectations and choices of one generation, keep in mind that the 18-to-25-year-olds of today will make up one third of all global consumers by the end of the next decade. Businesses that can implement frictionless onboarding have an opportunity to not only build trust and loyalty with current customers, but to ensure they aren’t losing large segments of potential customers to unnecessarily complex onboarding.
Increase Revenue, Minimize Friction
People are demanding better digital onboarding tools because the platforms they’re being asked to use are often sub-par or don’t exist at all. As consumers slowly recover from past pandemic impacts and current strenuous financial times, people are expecting digital onboarding in every industry. In fact, of the 4,000 consumers surveyed by Signicat, a staggering 70% say that the convenience of digital onboarding means they are more likely to use it every day. At the same time, businesses are challenged with mitigating financial risk and maintaining global KYC (Know Your Customer), AML (Anti-Money Laundering) and CDD (Customer Due Diligence) standards within the digital landscape. So how can businesses both meet the needs of their consumer base as well as maintain global compliance?
This is the point at which merging new technology with knowing your customer becomes crucial. Businesses need to find new ways to meet the AML, CDD and KYC compliance standards of digital onboarding while simultaneously removing annoying barriers and friction for potential customers. The solution to this issue is simple: businesses should invest in a qualified, secure compliance provider that can create a frictionless and easy process for your clients and increase revenue and customer retention rates for your business.
Working with a compliance provider like EVS that understands the complex nature of compliant digital onboarding. EVS offers identity verification software that can help increase your business’s revenue while minimizing friction through seamless onboarding. Our solutions are highly flexible and can be combined with dynamic knowledge-based authentication, fraud alerts and watch list screenings to provide comprehensive identity verification coverage for your business. EVS also works with a variety of independent software providers to incorporate the appropriate EVS solution code into their products and create customized usability. If you’re interested in learning more about EVS’s compliance solutions, extensive experience, or impeccable customer service, reach out to our team today to get started!