Customer onboarding processes have faced a revolution in recent decades as they have moved from time-consuming manual or poorly digitized systems to automated tools that through information cross-referencing and artificial intelligence allow the identity verification dilemma to be solved in seconds, resulting in operational and financial efficiencies.
Automation, which represented a global market of some US$214 billion in 2021, is generating a disruption in all industries and specifically in the financial industry has shaken up traditional customer onboarding processes, to the point that the investments of entities are increasingly focused on this type of technology.
The adoption of automation is becoming a more and more notorious necessity among organizations, which are competing to generate much more agile processes at times when an additional step or a complex form can alienate new customers in a matter of minutes, or even seconds.
Winning a new customer can be a task not only more complicated, but also up to five times more costly than retaining them. It is not for nothing that 44% of organizations today focus their strategy on acquiring rather than retaining, although this is also an essential point, according to figures from the consulting firm Invesp.
Once a positive balance is generated in the flow of new customers, the retention rate becomes key and it is estimated that increasing it by 5% could increase profits by 25% to 95% on average, for which it is important to maintain a first class level of experience with a focus on security and traceability of services.
Pioneering companies in the automation of these services are advancing in the development of biometric systems and document analysis with artificial intelligence, quickly ensuring that information such as the home address, a receipt of utilities or the status of a bank account is valid.
These companies, like Preventor, adopt electronic digital signatures for financial or commercial contracts, especially for account opening or service sales, in order to reduce manual verifications and back-office processes.
Also, with the addition of artificial intelligence, they are able to perform age and gender proofs when making registrations simply with a selfie, contrasting this information with other documents.
Among other solutions, today companies are increasingly demanding two-factor authentication systems for devices, as well as geolocation to minimize fraud. In addition, trends point to the automation of AML and KYC processes at the time of onboarding with dynamic templates, which reduces tedious and costly compliance processes and speeds up and increases sales, according to Preventor.
But the success of this is ensured by automatic monitoring of customers and KYC , generating alerts for updates to meet regulatory commitments on an ongoing, and above all, efficient basis.
Preventor, a firm specializing in fraud prevention, sees that digital identity verification has become part of the natural process of customer onboarding. However, this is not enough to meet the current challenges and requirements of financial institutions, so automation plays a key role.
On this point, an analysis by James Morgan, from PwC in the United Kingdom, points out that "the future success of banking depends on the value that the industry attributes to its customer relationships, and this begins with customer onboarding".
In this process, fintechs are challenging traditional banking and part of their key is due to the incorporation of these pioneering tools based on automation, which have ceased to be an emerging technology to become an essential part of core business.
The German firm Statista projected that the process automation segment would become an US$83 billion market last year, being the backbone of many global industries.
And this, given that "by speeding up processes and minimizing human error, the advent of automation and connected devices allows industries to innovate and grow in size quite rapidly," it said
Onboarding clients with automation has never been more crucial than in 2022 in the face of malicious campaigns for information theft and more sophisticated cyber attacks, from which technological tools learn every day to armor themselves.
Today, automation offers flexibility to incorporate dynamic flows, allowing to carry out checks and processes according to the sector and the needs of each company, according to Preventor. Thus, automation not only helps to prevent fraud, but also, thanks to this shielding, once considered an expense for organizations, it generates an increase in sales, considering that the customer market expands to other territories. With the necessary licenses, Preventor points out, it is also possible to expand internationally without technological impediments or high costs of physical presence.
Contact our specialists to learn how Preventor can help your business grow.
