As new competitors break into the financial services sector and the level of customer experience rises, banks know they must up their game when designing the digital experience for new customers. Today, many consumers want (and expect) the ability to open their accounts online or use their mobile device, without setting foot inside the branch. This first point of contact with the applicant can have a profound impact not only on the likelihood of converting them into a customer, but also on their perceptions and relationship with the bank.
Historically, applicants had to bring their identification documents to the bank branch for a bank branch representative to verify the validity of those documents and make copies. The applicant would have to make a handwritten signature on the required account opening documents. Increasingly, however, technology is being used to digitize and automate the account opening process to enable remote, unmediated channels. For example, document verification solutions can help to ensure that identification documentssuch as driver’s licenses and passports, are validfacial biometric verification can establish that the person presenting the ID is the same person whose photograph appears on the document. In addition, many banks and credit unions are adopting electronic signature technology across the enterprise with the goal of automating the secure delivery of documents for signature and capturing a legally enforceable contract to strengthen their legal and compliance position.
Harnessing the power of mobile for digital account opening
Digital account opening is becoming increasingly important for banks in response to changing consumer preferences. However, the incorporation of new customers presents two main challenges:
- Comply with appropriate risk, fraud and compliance requirements
- Ensuring a frictionless customer experience
In the past, this was difficult for mobile, as remote onboarding experiences still required in-person identity verification and forms were poorly rendered on small screens. However, recent advances in software and hardware technology have changed the playing field and mobile devices are now seen as a new channel of engagement for banks of all sizes.
In the U.S., President Donald Trump approved recently the Economic Growth, Regulatory Relief, and Consumer Protection Actwhich includes the “MOBILE Act” (Making Online Banking Initiation Legal and Easy), which allows financial institutions to digitally onboard new customers with a scan of a driver’s license or ID card. This form of remote digital integration will reduce costs for banks and improve the customer experience from the beginning of the relationship. It also complies with strict “Know your customer” (KYC) rules. As a result, bank customers across the U.S. will be able to open new accounts without having to visit a branch.
Banks can leverage digital onboarding solutions to verify the identity of applicants in real time. There are many ways to conduct KYC checks during the onboarding process. This often depends on the type of transaction and associated risk, geography and industry regulations. At its core, KYC ensures that the applicant is who he/she says he/she is and that he/she is not attempting to enter into an agreement illegally or fraudulently.
Below is an example of an account opening workflow to illustrate how technology can help automate this process.
 |
STEP 1: verify that the applicant’s identification document is legitimate.
The applicant takes a photo of his or her identification document (e.g., driver’s license) using his or her mobile device. Document verification technology scans the supporting document and uses sophisticated algorithms to detect forgeries and ensure that the ID is authentic. |
 |
STEP 2: verify that the applicant is really who he/she says he/she is.
The applicant takes a selfie. This method compares the selfie with the image taken from the identification document. The technology detects whether the photograph has been taken at the time to combat hacker spoofing techniques. If the images match, the applicant can continue with the application process. Additional KYC / AML (“Anti-Money Laundering”) assessment can be incorporated using a configurable workflow that leverages third-party identity checks. |
 |
STEP 3: pre-fills the identification document data and allows the applicant to sign electronically.
Data is automatically extracted from the identification document (e.g. name, date of birth, address, etc.) and, alternatively, from third-party data sources, and then completed on the application form. This reduces the amount of manual data entry required by the applicant before the electronic signature is captured. |
Main requirements to open a digital account
With the availability of mobile devices and digital technologies, such as identity verification and electronic signatures, creating a frictionless and secure customer experience is truly within your organization’s reach.
Look for solutions that enable your bank:
- Verify the authenticity of government-issued identification documents (e.g. driver’s license, ID card, etc.), especially for remote, unmediated applications.
- Verify the identity of the applicant by means of a biometric verification (“selfie”), which links the applicant with the photo on the identification document.
- Automate due diligence checks with third-party credit bureau providers to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.
- Pre-fill the fields of the application with the applicant’s information and obtain the consent with the electronic signature.
- Capture complete audit trails, from identity verification to signature, in a single evidence pack.
- Deliver an intuitive user experience across all your digital channels.
Digitizing the account opening process not only improves the customer experience, but can also substantially eliminate manual paper processing and double work for your employees in the back office.
The need for digital and mobile onboarding presents an opportunity for growth and long-term customer loyalty. They will appreciate the ability to interact with you anytime, anywhere, without having to use paper or visit the branch for in-person ID verification. The good news is that banks have the tools to digitize and replace complex, paper-based processes and KYC/AML with investments in customer-centric technology such as digital ID verification and e-signatures. Learn how OneSpan can help your bank make significant progress with its digital account opening initiatives and make every step of the digital customer journey easy and secure.
Content extracted from
OneSpan
.