How lenders can automate customer onboarding

In recent years, digital onboarding methods have enabled online lenders to grow rapidly. Traditional lenders, such as banks, have been unable to keep up with the streamlined consumer experience offered by their online counterparts.

Implementing a digital-first approach for onboarding consumers when applying for online lending services has contributed to a huge rise in consumer loan growth.

Digital technology, and in particular instant ID verification and KYC solutions, make it possible for loan eligibility decisions to be made in a matter of seconds. The economy is changing and there are more and more new entrants meaning competition is stiff. The increase in alternative and online methods has helped lenders to keep innovating, giving them that competitive edge.

To onboard consumers in seconds, incorporate digital identity verification to verify the name, date of birth and address whilst meeting territory regulations.

Introducing a robust and effective KYC and identity verification process within online lending, or any financial workflow can positively impact the underwriting process and profitable approvals. Financial institutions, such as lenders, already deal with high volumes of fraud. For online lenders, those fraud volumes increase even further, with an average of four times as many fraud attempts as other financial services. By incorporating a variety of identity verification technologies and data sources, lenders can perform extra checks without adding friction to the consumer journey.

Lenders already deal with daily fraud risks, but for online lenders, those risks are quadruple that of other financial services.

Although reducing and minimising fraud is hugely important, robust identity verification solutions prevent lenders from declining legitimate customers, resulting in increased revenue. In these situations, requests for alternative data like social or utility account data can be useful as they help reduce fraud whilst improving approval decisions for individuals with thin or no credit data files. For high-risk transactions, layering additional identity verification methods, such as dark web and PEPs & Sanctions checks can also minimise fraudulent applications. In addition to reducing the risk of fraud, online lenders must also rely on robust identity verification methods to adhere to strict regulations, such as Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance requirements. ID Verification in today’s digital world is the starting point for ensuring KYC and AML regulations are appropriately met – minimising the risk of money laundering and protecting consumers from online fraudsters.

Implementing tactics to mitigate risk whilst delivering a smooth consumer experience can be challenging. Traditional methods, such as manual document verification, are often too disruptive in an online journey and add unnecessary friction for the consumer. Implementing a friendly, frictionless experience allows consumers to take more control of their onboarding experience whilst protecting lenders from fraud risks.

Friendly friction allows consumers to take more control of their lending experience.

Meeting regulations can be challenging for online Lenders, so when friendly friction is a must remember to do what makes sense for the consumer. Incorporating digital data and automation into the decision process can maintain efficiency and avoid drop-off.

Frictionless Future - 5-Step Guide

Using a combination of KYC solutions within an online lending identity verification process can simplify onboarding and approvals. One way that lenders can implement an innovative method is by giving applicants the option of verifying themselves using their utility and telecom accounts, or even their social media profile.

With solutions like UtilityConnect for identity, date of birth and address verification, consumers are able to allow lenders to directly draw data from their electric, natural gas, cable, or telecom accounts in a fully digital and automated way.

How to strengthen consumer trust

With the effectiveness of online methods, consumers demand greater transparency with how their data is being accessed and used. Consumers also want to feel their data is safe with the rise in online fraud and data breaches. At Hello Soda we believe in privacy by design. UtilityConnect, along with our suite of solutions, are all content-based and fully compliant with GDPR and CCPA.

Today, financial institutions, such as lenders, can empower consumers by leveraging automated and consent-based online onboarding processes. Combining a mixture of identity verification solutions with fraud prevention checks, such as dark web and PEPs & Sanctions, provides both comfort and safety for the lender and consumer.

Improve online lending solutions with innovative technology which uses data from sources such as utility providers, social and digital channels.

Despite the regulatory challenges, automating identity verification checks is straightforward. Implementing online lending processes benefits both the consumer (borrower) and the lender.

How can we help?

UtilityConnect is an innovative solution for address verification and is fully compliant with GDPR and CCPA. If you’re looking for additional checks, UtilityConnect can be combined with our other ID, KYC and AML solutions via our single API; Sodium.  To learn more, fill in your details below to download our full UtilityConnect product guide.

UtilityConnect Overview Download

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