In some situations, it may be as simple as making an account with the company and choosing a username and password; however, in regulated industries, more extensive processes such as KYC (Know Your Customer) and AML (Anti-Money Laundering) as required by relevant regulations.
It is essential for companies both old and new to be able to onboard new customers to be able to grow, and research indicates that without quick and easy customer onboarding, users often opt for different solutions for their needs. Without onboarding new customers, companies either fall behind their competition, or are unable to gain the traffic they need and collapse. Potential customers are noted in reports as willing to sacrifice security and privacy for ease of use. The time it takes to register, the time it takes for verification to come through, and the user interface can all impact a person’s choice on whether to onboard with a service.
When onboarding new customers in regulated industries, the necessary KYC and AML checks traditionally represent a significant pain point, with manual verification of documents carried out physically by employees (either internally by the company or outsourced to verifiers). This represents a significant cost to businesses, with some companies spending 10% of their revenue on KYC and due diligence required to onboard new customers. As a result, this process is increasingly being carried out on computers to take advantage of the benefits provided by digitalisation, and, even more recently, Artificial Intelligence such as Machine Learning has been applied to further improve customer onboarding solutions.
By employing new technology and opportunities such as AI, ML, mobile applications, and others which are still under development, customer onboarding is able to be carried out much faster and more accurately than it has traditionally been able to, and at greater volumes. Whereas before some people might have to wait weeks to use a new service, the process can use newer technology to be completed in mere minutes, or even seconds. With these benefits come a linked reduction in cost; huge efficiencies and the reduction of labour-intensive man-hours make the process of onboarding customers vastly more affordable. Despite this potential from technology, having a human element to oversee fringe cases and any possible issues is still recommended by most.