The impact of remote KYC onboarding on customer experience

AML checks

In today’s digitally minded world, remote onboarding is nothing new. We see new employees being onboarded into remote roles from across the world, we sign up to services such as utilities, streaming platforms, mobile phone contracts, and even access healthcare through online channels. 

As such, onboarding new clients into financial and regulated services should be no different. And yet, proving who we are online is seemingly still cumbersome for some institutions, flawed with inefficiencies and often fragmented across varying methods of proving who we are – in some cases, forcing customers offline to prove their identities. 

With abandonment rates in financial services hitting highs of nearly 70%, cumbersome application processes where too much personal information is requested and, where there is not an end-to-end digital process in place, customers are being required to visit branches (where there are branches on high streets!) or offices in person with physical documents in hand. Like other aspects of their online purchases and activities, consumers want on-demand, digital-only onboarding.

What is KYC onboarding and why is it important?

Know Your Customer (also known as KYC) onboarding is a legal requirement for regulated businesses to verify their customers before opening an account or processing a transaction such as a property purchase. 

In a KYC check, customers typically have to supply proof of identity, proof of address and sometimes other information related to the situation at hand. 

For example, a solicitor processing a house sale may request bank statements proving the source of funds of a house deposit as part of the KYC checking process to ensure there is no nefarious activity occurring within the transaction.

Individuals may also be screened against economic sanctions lists, for political exposure, outstanding CCJs or credit checks undertaken as part of the KYC onboarding process.

What is remote KYC onboarding?

Remote KYC onboarding is the process of gathering information required as part of a KYC check remotely via digital platforms and online channels. Firms may use onboarding software tools through which customers can take photographs of the required KYC documentation and upload it into a secure portal for evaluation. 

These platforms enable remote KYC onboarding and provide a seamless, friction-free way for customers to prove their authenticity, and allow companies to assess how big a risk an individual may pose.

There has been a significant increase in demand for remote onboarding from institutions and their customers. This trend was exacerbated by restrictions on movement in the context of the COVID19 pandemic, which highlighted the importance of institutions having at their disposal reliable and effective means to meet their CDD obligations in this context.

European Banking Authority

The benefits of remote KYC onboarding

Traditionally, the onboarding process is carried out face-to-face, with individuals presenting themselves physically at a company’s location or branch, along with their identity documents and any other physical records required to complete the verification process. 

What ensues is typically a laborious and time-consuming process which, in today’s digital age, simply doesn’t meet customer expectations. 

However, with the advancement of technology, remote KYC onboarding has become increasingly popular.

Increased accessibility for customers 

A remote KYC onboarding process allows customers to access financial services and regulated products at a time that suits them, using their own personal device or computer. 

Customers no longer need to visit a business location in-person, which can be particularly beneficial for those who live in remote areas or have mobility issues. Remote KYC onboarding also allows customers to complete the process at their own convenience and pace, without having to take time off work or rearrange their schedule. 

This increased accessibility lends itself to friction-free, simple onboarding and, as a result, the reduction in abandonment rates due to frustrations around presenting physical documents in-person.

Convenience and flexibility for customers 

This 100% online process of onboarding customers satisfies demands for quick and secure service access. Without the need for in-person verification, checking of documents and visiting company locations, customers can be onboarded in a matter of minutes by taking a photo of themselves and their identity document for quick, digital verification.

Cost savings for business

In-person onboarding requires significant resources, including staff time and physical locations for the process. With remote KYC onboarding, businesses can save on these costs while still ensuring complete regulatory  compliance.

Reduction in the time and resources required for onboarding 

Remote KYC onboarding removes the need for labour intensive human verification of documentation and manually adding new customers to your business. Businesses can streamline the process by automating repeatable steps, such as routine document verification, and utilising software to analyse ID documents for legitimacy and corroborating documents against one another.  

Without the need for human intervention, customers are onboarding quickly, and time-to-revenue is dramatically reduced, while your compliance team is free to focus on more pressing matters where real value can be delivered, rather than spending time manually checking identity documents. Overall, this can help speed up the onboarding process, allowing businesses to onboard more customers in less time.

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