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The Signicat Blog

Digital Onboarding: meaning and how the process works

In this article, we are going to lay out what the onboarding meaning is and how a customer onboarding process should be.

The digital client onboarding process represents the core process in which companies and organisations incorporate their customers and users in a fast, simple, secure, and guaranteed way.

This essential part of the user-organisation relationship is presented as the critical moment for two fundamental aspects: the security of the company or organisation to acquire a legitimate user with the necessary controls as a client (the customer onboarding process) and the final decision of the potential client to become a client.

# Onboarding meaning: what is the onboarding process, and what is it for?

Onboarding refers to the process of acquiring or subscribing new users, ensuring that they have access to all the services and products that an organisation can offer in a simple and fast onboarding, integrating them into the database.

Then, what is an onboarding process? A KYC client onboarding process is the formal beginning of a direct and consensual relationship with an individual as a registered user or formal client. It is a crucial step in deciding whether the potential clients are proper to become formal clients of our company or if it is better to reject them. Thus, the client will be registered with our company, providing data that allows its identification and access to the products and/or services contracted.

Although the concept of onboarding is well known in human resources and talent management, this term is widely used in any field where an organisation needs to incorporate a person into its structure, either as a client, employee, or user. When this process is taken online, we would be talking about the definition of digital onboarding.

# Digital Onboarding definition: the new digital bank's onboarding specialist

With digitalisation, this digital onboarding process can be done entirely online and remotely from any device with a camera. Thanks to specific and exhaustive technical and security controls, companies in any sector, including those as sensitive as financial ones, can digitally identify customers to incorporate new clients and users from anywhere, at any time, and through any channel with security and regulatory support. The onboarding process converts into a remote onboarding experience from start to finish.

The process of onboarding customers is as well-known as Know Your Customer (KYC) or Know Your Client. These terms, widely used in banking, finance, insurance, or related sectors, are sometimes synonymous with digital onboarding, used in all industries and areas. Although KYC has a wider process spectrum than onboarding, the onboarding process is the first step in KYC.

With the development of new digital onboarding systems and innovative digital onboarding software platforms and solutions, this process can be automated through any digital device.

# Client onboarding types: what is digital onboarding?

  • On-Site Client Onboarding: It is the conventional onboarding method. The customer needs to attend a commercial office, branch, or store of a company and must show their identity document as proof of identification.
  • Semi-On-Site Client Onboarding: Companies offer digital documents to their new customers to fill in the data at home, but still, they must move to the branch to hand them in.
  • Digital Client Onboarding: Also called online or remote. The implementation of software for onboarding completely digitises the process. Thanks to this, customers can register and contract services remotely with the same security and guarantee as in person.

# How does identification work with online onboarding software solutions?

Remote KYC onboarding is completely transforming the financial services.

Banks and financial institutions have finally internalised the needs of today's customers. As a result, most of them have transformed their onboarding processes and the whole KYC system to offer a customer onboarding experience that customers find comfortable, easily accessible, and frictionless. As a result, digital customer onboarding apps and systems have helped optimise timings, resources and costs.

Customers do not need to move to acquire and access products and services: the remote opening of bank accounts with the same guarantee and security as face-to-face methods is now possible with the new regulations and technological solutions developed by RegTech companies.

# Why is digital onboarding transforming business?

Companies in the financial sector have already benefited from this revolutionary new technology and its legislative framework. First, this technology is accessible to the user, making a tedious and complex process immediate and fluid. On the other hand, VideoID allows real-time verification, thanks to some software provider's implementation of artificial intelligence and machine learning in the KYC (Know Your Customer) process.

These aspects have shown that companies using this technology for customer acquisition have exponentially increased their conversion rates thanks to the incorporation of digital customer onboarding solutions (in other industries, such as insurance, as well). This new system also protects customers against fraud, as this technology complies with the strictest video identification security standards.

# What is client onboarding in banking? Advantages of AML client onboarding KYC software

Digital onboarding has many benefits in banking. In these companies, digital onboarding process is the key for banks to increase the conversion rate and improve the user experience; simultaneously, it meets the strictest regulations of AML and KYC and drastically reduces costs, boosting productivity and eliminating barriers and waiting times. In the same way, the highest technology in banking and FinTech onboarding can also help these companies meet their user's demands for the registration processes by providing a state-of-the-art customer onboarding experience.

Many companies, especially in the financial industry, lead the market by having adopted the 5AML Directive in their online onboarding process, accessing a new European market with 508 million potential customers.

# Best customer onboarding software and solutions

9 out of 10 banks with video identification systems have implemented our digital onboarding technology, which has allowed them to greatly increase their customer acquisition.

Traditional onboarding process, which usually requires about three weeks on average, is done in three minutes or fewer, thanks to digital onboarding. When performing customer onboarding via video streaming, the registration results in a time-saving and more efficient process for both employees and customers, reducing bureaucracy and avoiding losses of potential customers in the last stages of the client-acquiring process. These components have allowed these companies to reduce operating costs and increase sales volume.

This is also a safe and secure method for remote KYB onboarding for companies.