Digital Banking

Customer Onboarding in Digital Banks

Customer Onboarding

In the banking industry, customers are the epitome who cause business disruption, and financial institutions are working hard to satisfy their demands. In this process, customer onboarding is an essential aspect.

What is Customer Onboarding in banks?

Onboarding of a customer is a process in which a bank undertakes to bring in a new business customer onboard. The onboarding process involves gathering essential information on a customer and conducting identity checks in order to comply with the KYC (Know Your Customer) regulations. This information is collected so that the customer can open a bank account.

The main challenge in customer onboarding is to provide a good customer experience at the same time, meeting all the compliance requirements.

Onboarding of Customers in today’s time

Banks today are looking to maximize their onboarding investments. They use multiple cores, legacy platforms in their attempt to ensure consistent customer experiences, but these platforms have become outdated. In order to provide a perfect onboard experience, there is a need to rethink the business process.

Improving these processes helps in providing the best experience to customers in today’s world. The onboarding solution must have the flexibility to merge with the existing systems.

Challenges in Customer Onboarding

Onboarding in digital banks is not free of challenges, as it is not just enough to digitize it. Some of those challenges are mentioned below.

Challenges in Customer On-boarding
  • Excessive friction

If the onboarding process is time-consuming or if it requires too much information, people may give up the process. It may become a tedious process and lead to loss of customers. Keeping things simple can help in this situation. Eliminating the need for manual entry can make the process less time-consuming.

  • Security and Regulation
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As onboarding in digital banking provides a lot of conveniences and great customer experience, there is a possibility of safety and security being compromised.  Therefore while onboarding, there must be high-end encryption and compliance with KYC (Know Your Customer). Two-factor authentication is also recommended to ensure authorized access. 

  • Personality

Onboarding in digital banks is like interacting without any personal touch; this can cause the customers to feel a sense of detachment. This process can be made much more interactive by avoiding the use of some common phrases and instead use a kind of communication that makes the application less robotic.

  • Stagnation

The way technology is evolving and growing, keeping up with the latest trends and features, can be challenging. There is a need to induct features in the banking app that is updated with the latest trend and not outdated. The onboarding process can be further improved by getting feedback from the customers that allows you to assess which features you need to retain and which to abandon.

  • Data Management

The management of data can be challenging as there is thin a line between collecting too much data where the customers get annoyed to not collecting enough to serve them. The banks have to be aware of this small gap and not overdo nor downplay.

Steps to have a Frictionless Customer Onboarding

Considering the challenges are many, we have also compiled the steps to ensure a frictionless onboarding process.

  • Blend human and digital experience

The onboarding process can involve a personal touch as an all-digital touch can make the process robotic; therefore, it must involve a seamless in person and online experience.

  • Transform the digital experience of customers
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The customers are increasingly interacting with banks and financial institutions digitally. Therefore to capitalize on this shift, the banks can bring about a digital transformation within their respective organization.

Transforming the experience of the customers can cause the customers to have a long term relationship with banks.

  • Mobile as the hub of onboarding

With the banking activities now shifted to digital channels, more and more traffic is coming from mobile devices. This speaks volumes of the coming trend where more activities are expected to be performed by mobile devices. Therefore customer onboarding strategy must begin with mobile devices.

  • Usage of data to differentiate and personalize the experience

Transforming the customer experience involves leveraging the data to know how the customers want to receive information and what factors work well for them when it comes to onboarding.

  • Be customer-centric and not technology

Customers are in need of excellent user experience and the way of receiving the banking products easily; therefore, the banks must understand the needs of their customers and look to provide a seamless onboarding process.

Future of Customer Onboarding in Digital Banks

Financial institutions are now turning to the latest technologies to find efficiencies. This could be the future trend as far as onboarding is concerned.  It not only allows them to provide a seamless experience to their customers but also satisfies the regulatory standards.

Digital banks are expected to use more and more means such as Artificial Intelligence, Blockchain, biometrics, digital identities, etc. to have a successful process of onboarding. One aspect that’s not gonna change is the fact that focus on customer experience will be the top priority. The improvement in customer service is bound to happen in the future, considering the enhanced competition.

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The use of new emerging technologies such as Machine Learning or blockchain can cause the transformation journey to take less time than usual. It can significantly cause the addition of a lot of potential customers.


How the banks and financial institutions cope with the challenge posed in the quest to provide a great customer experience will determine how better they are able to ensure customer onboarding. If they are to attract and retain the customers in the long run, then they are required to reinvent and innovate with their services.

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