Frictionless Digital Onboarding For Financial Institutions

Frictionless digital onboarding using identity verification

Many industries have seen seismic shifts in their business approaches in recent years, the common denominator being technology and how it is deployed. Take the temporary accommodation business, encompassing the likes of hotels and short-stay apartments. Wind back the clock 20 years and few could have imagined an era when one industry newcomer, Airbnb, would have a valuation equal to a clutch of veteran behemoths.

Airbnb’s arrival shook up the market like no other and the result is a market valuation of over $100 billion, as much as the combined value of six leading global chain hotels. Not bad for an organisation that doesn’t even own one physical hotel.

And now another traditional industry is being turned inside out — banking.

Previously viewed as impenetrable to all but those with terrifically deep pockets, smart and creative deployment of technology to improve the customer experience end-to-end is changing the banking industry like never before in its 2,000-year history. And it all started in the UK with the challenger banks.

Defined as small to medium retail operations set up with the purpose of competing against larger and more established banking institutions, challenger banks are heralding an exciting era in finance for customers — and they are not just restricted to the UK now.

Good customer experience leads to loyalty

On average, people stay with their banks longer than they will stay with their partner — the current average customer stays loyal for 17 years, according to the banking trade body the BBA. First experiences with a brand therefore count for a huge amount; customers don’t care about how elegant an organisation’s IT set-up might be in the back office, they care much more about what their onboarding experience at the front end is like.

For banks and other financial organisations, this means winning new clients ranks highest because each onboarded customer is likely to become a loyal account holder for years to come. Make the onboarding experience long and complicated at your peril. Investment in digital onboarding through online and mobile channels is no longer a nice to have.

According to Forbes, digital account opening (DAO) is the most popular technology in banking for the third consecutive year. Close to 80% of all financial institutions added new DAO systems or enhanced their existing ones in 2020. Onboarding is a golden opportunity for financial institutions to demonstrate a superior customer journey but many squander that opportunity by making the experience long and complicated.

Peter Ramsey, founder of the UX site Built for Mars, proved that it took up to five times as many clicks to open an account with one of the old guard in the UK than with a new challenger. The problem of client leakage is real, just as customers’ patience with laggards is thin.

Friction impacts your digital onboarding

Even the best digital experiences and most thought-out processes can come under stress when live customers are trying to navigate your system, resulting in prospective customers abandoning your onboarding process.

The most common pressure points where users can face friction include:

• User-focused design: strong user experience (UX) throughout your digital touchpoints is a cornerstone in reducing customer abandonment. The number of clicks associated with completing an onboarding journey or specific fields within an application form can directly impact results. The underlying objective of any digital onboarding process is to be as easy as possible for customers whilst maintaining the integrity of the process — structure this for users, not your internal administrative processes.
• Psychological and behavioural factors: just like your human staff members focus on building trust with prospective customers, your digital onboarding process should do the same. Don’t ask for the most personal details upfront, and group similar tasks together to streamline the process. Even minor details like using too many capital letters can affect overall perceptions of trust.
• Advocating AI: artificial intelligence, even in the simplest form of a well-structured chatbot, has a direct impact on conversion rates for new customer sign-ups. Chatbots linked to a real customer service agent within office hours are proven to increase the number of customers completing applications.
• Pre-fill and validation services: it is possible to implement pre-filled information to reduce the number of fields your customers have to fill in directly. This covers traditional KYC elements to validate addresses through to enhancements such as using a device camera to capture credit card details. Live data checks in real time as a customer fills out a form — such as a mobile number to name match — can verify that the details provided are genuine.
• Mobile number verification: it is possible to integrate a full range of security validation features into your customer onboarding via a mobile number validation and verification API. From the data already captured during your onboarding process, it’s possible to verify not only if a customer is real and active, but also whether the key information provided matches that associated with the mobile device in question. This can vastly reduce levels of account fraud and can also be used as an ongoing real-time monitor for your existing customers.

Mobile data intelligence: the mobile verification process

There are several verification options available in the market. These range from simple options like security questions through to more specific functionality, such as uploading and scanning a photo to be checked against a customer’s ID documents or passport.

Mobile number intelligence and mobile device verification are powerful tools in streamlining this process whilst still providing an enhanced level of account accuracy, security and fraud prevention. There are many data points both within your device and across mobile networks which can be analysed to validate whether a user is authentic — and this can all be done seamlessly, behind the scenes and in a matter of milliseconds.

The overall mobile verification process is started when a customer submits their mobile phone number on a sign-up page or application:

• Valid number check: our API confirms that the mobile number provided is real and active.
• Location: our verification API analyses the relevant location of the mobile number and other live network data to determine if the number is actually in the country customers say they are. Many of our data points are also available globally, so your onboarding process can remain consistent.
• Name and number authentication: this is then checked against the live mobile network operator databases in the location in question.
• Integrated analysis and results: once checked, your verified results are returned within a fraction of a second, providing additional security benefits with no added friction for your customer. Our API allows you to integrate a number validity check into existing workflows. Our verification platform is georedundant and automatically uses the best combination of data sources to return the information you need.
• Ongoing fraud prevention: users have the ability to proactively monitor the growing risk of user account fraud on an ongoing basis. All your customer mobile numbers can be monitored to give real-time protection, meaning you can target your security settings to add friction to the login process only when needed.

Why does mobile device intelligence reduce friction?

To sum this up, the beauty lies in the classic adage that less is more. From less customer data compared to other verification methods, it’s possible to learn a lot more about your customers and provide a more secure and streamlined onboarding experience for them.

Furthermore, integration is key — it’s possible to implement additional security checks based on a customer’s mobile number, which they are usually already providing as part of the process. Our team of specialists are also on hand if you have specific questions about how this would integrate with your existing technical setup.

As technologies develop, an ever-increasing range of information can be extracted from a customer’s mobile device to help validate their identity, including the growing use of biometric data. The more this becomes a seamless part of the user process, the more mobile data can help protect your customers. Speak to our team of specialists to find the perfect solution for your business today.

Real-time verification for onboarding

Banks are strictly regulated and the world of identity can be a real headache. Proving their customers really are who they say they are is integral to the onboarding process, as indeed it is with ongoing transactional business thereafter. The process has to be as frictionless as possible. Knowing your customers (KYC) isn’t easy but this is where the TMT ID team step in to lighten the load.

A person’s mobile phone number is fast becoming integral to not only their identity but any KYC process. Mobile phones however can be a hotbed for account takeover, SIM swap fraud, port-out fraud and call divert fraud. Our solution Verify is powered by our global mobile numbering intelligence.

As a leading provider of mobile number intelligence globally, we gather data from countries every day and store the status of over 2.5 billion numbers. This data, together with our live feeds with the leading operators in the mobile industry, gives a wide range of intelligence on the status and history of a number in a fraction of a second — and it’s this data which powers many of the world’s leading identity providers and banks.

Speak to us today about how TMT ID can help your business at info@tmtid.com.