When it comes to onboarding new customers, poor processes can result in the nightmare of escalating costs to your business.
Signing up new customers should be simple. Getting it wrong can frustrate new customers, resulting in higher volumes of abandonment, increasing acquisition costs and ultimately, create a poor brand experience.
A positive onboarding experience confirms to your customers that they made the right choice, and in the end, helps you retain them. But creating an efficient, robust onboarding process isn’t without its challenges; here are 5 ways you can avoid the hidden costs of onboarding:
1. Speed it up! (Remove slow processes)
One of the main reasons for customer abandonment is the speed of the onboarding process. If your process takes days or even weeks to arrive at a decision as to whether a customer is being approved or disapproved, they’re very likely to go to a competitor where they can be up and running in minutes.
This is especially prevalent in industries which are subject to regular promotions. For example if a gambling company is running a promotion for a big horse race, a new customer will want to be using their service before the race so they can make use of this promotion. If the onboarding process is taking too long to come to a decision, the customer will use a provider where they can bet on the race.
It goes without saying how important it is to stay abreast of industry regulations and perform necessary KYC and AML checks when onboarding new customers, but completing manual identity proofing measures in order to remain compliant can lead to long and cumbersome account opening processes that drive away new users. According to American Banker, adding 5 minutes to the onboarding process can increase drop off rates by 200%.
2. Reduce false positives & negatives
In digital fraud prevention, there is a fine line between flagging too many transactions as potentially fraudulent and not flagging enough. Too many false negatives means that fraudsters are slipping through the cracks, too many false positives means legitimate users and transactions are being flagged incorrectly, leading to undue friction and lost business.
Companies need to find their optimal balance between fraud and friction. Fraud prevention solutions aren’t really effective unless they can tell good users from bad and implement different processes for each. Aite Group estimates that the e-commerce industry will experience false positive losses of $443 billion by 2021, far more than the projected fraud losses of $6.4 billion.
3. Update your methods of ID
Traditional checks have their place, but using ‘old-school’ methods such as credit history mean that many good customers are turned away. A vast number of millennials do not have CRA data so if this source is used, they are rejected. Equally in countries with thin files, where traditional data does not exist or is scarce, an advanced, automated product offering can be used to qualify and verify new customers.
Using a wider range of more readily available data sources gives customers the highest chance of passing through your onboarding process, thus increasing acquisition and lowering costs.
4. Automate your processes
Relying on manual processes can eat into your onboarding budget. Manual work requires a human, which means it takes more time, is more prone to errors, and offers zero visibility which keeps almost everyone in the dark. Customers can’t see the status of their onboarding, which can erode trust and put teams in reactive mode.
Banks that have automated their manual processes have achieved a 32% reduction in misplaced documents and have reduced their end-to-end processing times by 57% while cutting their storage, transportation and handling costs by 38%.
Automated processes are quicker, more accurate and more efficient and a user can find out the verdict of their application in seconds.
5. Make it mobile friendly
Onboarding using mobile devices opens doors to more technology which can be used to perform biometric and liveness checks, improving the accuracy of verification. But businesses who do not take into account the drawbacks of onboarding using mobile, such as asking customers to manually key in numerous and complicated fields which require extensive amounts of information, are likely to suffer from dropouts.
A report by Osterman Research noted that 56.3% of millennials would abandon an application for a financial services product if they could not complete it on their mobile and would join a more mobile-friendly competitor.
How can we help
To avoid the above hidden costs of customer onboarding, you need a partner and tool which is robust, efficient and compliant.
Introducing Sodium, our global ID, KYC & AML platform. Sodium is designed to help save you time and money, streamline your customer journey, automate your onboarding process, reduce fraud and achieve regulatory compliance by delivering a complete suite of Identity Verification and Fraud Prevention solutions via a single API. This solution enables all data sources to be cross-referenced and deliver truly enhanced customer due diligence.
A unique and real-time ID scoring system intelligently verifies identity through a combination of data sources, including digital footprint verification, document authentication, facial recognition matching, liveness verification, live utility data address verification and CRA identity checks.
Utilise a single element or multiple processes – it’s entirely up to you. Learn more about how we can help to automate and simplify your verification processes to help you to learn more about your customers.
Book a demo today and see for yourself how powerful our suite of solutions are.