The shift to digital was taking place well before COVID-19, but the pandemic, as well as advances in AI and alternative data, have helped accelerate the adoption and use of digital technology. Growing numbers of businesses are realising the necessity of, not just being online, but providing a first-class digital experience.
We almost take this new world for granted; from video conferencing and saving all of our information on the cloud, to startup brands having instant access to their customers – globally, people are becoming more connected with the use of digital solutions.
Consequently, businesses have had no choice but to innovate – and quickly – or risk losing market share and reputation to their more digitally nimble competitors.
Drawbacks of traditional onboarding
Traditionally, when performing some form of identity verification or onboarding, businesses would use methods such as proof of address or sending a copy of a passport and manual checks. These outdated processes can be time-consuming, frustrating and create a poor user experience for customers who may be likely to move to a competitor.
As we explored recently in our blog post on Financial Inclusion, 21% of young adults aged 20-34 in the UK live with their parents. That is 2.7 million people who are unlikely to be named on utility bills, have a credit card, pay rent or have a mortgage; 2.7 million people who may not have readily accessible bills or statements that they’re named on. Students are another key population that struggle with traditional identity verification processes; 40% of students say that they would find it inconvenient to provide a paper copy of a bank statement, whilst 28% stated that it would be impossible for them to provide a paper copy of a recent utility bill.
In a post-pandemic world, relying on traditional data to verify identity doesn’t just alienate the modern digital consumer, it can lead to huge demographics being unable to access the services they want.
FinTechs are employing remote onboarding
Technology-based financial services have been leading the charge to ‘bank the unbanked’, making daily financial operations accessible and user friendly for almost everyone – especially people who had no access to banks before.
Removing the hurdles created by traditional methods of onboarding can help open doors to financial inclusion for ‘thin-filed’ customers. Where these customers usually have some form of identification, they often lack the documentation and credit records required by traditional financial institutions to assess creditworthiness and perform consumer due diligence.
This is where utilising a wider range of data sources can be used to draw insights on a consumer’s financial profile. Alternative data is the antithesis of traditional data in that it includes anything from mobile phone usage, monthly payments and social media activity, to biometric identities derived from iris scans, fingerprints and hand geometry.
FinTech companies are capitalising on a willingness to incorporate technology into banking and onboarding by creating convenient, intuitive and personalised mobile apps. In our recent podcast episode with Dimitris Litsikakis, Global Head of FinTech at deVere Group, we discussed the wider implementation of ‘super-app’ wallets, which will house customers’ entire financial footprint.
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 the customer journey into account when using mobile and ask customers to manually key in numerous and complicated fields which require extensive amounts of information, are likely to suffer from dropouts.
1 in 3 adults under the age of 37 in the UK, say their primary banking relationship is with one of the host of challenger banks now available and according to finder, almost a quarter (23%) of all British adults have opened an account with a digital-only bank. They also found that two-thirds of banking customers say they plan to convert fully to a digital bank in the future.
In the first quarter of 2020, challenger banks Monzo and Starling made net gains of 19,049 and 15,153 customers respectively, while Barclays, Halifax, Lloyds, RBS and Santander all made net losses.
Finder also found that customer sentiment towards 10 of the UK’s biggest banks fell by 7% during lockdown, which leaves overall consumer sentiment for the banking industry at -24% (on a possible scale of +100% to -100% for the period between 1 March and 31 July). However, high-street banks had, and continue to have, a much lower overall sentiment than digital-only banks (-35% vs -13% currently).
How we can help
Here at Hello Soda, we’ve a comprehensive family of KYC and AML solutions all working together and delivered via a single API integration. Utilising all forms of data, this integrated approach helps increase pass rates in countries all over the world, which in turn increases revenue and customer acquisition with real-time onboarding, creating a better customer experience.
Traditional checks, such as using 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, our product offering can be used to qualify and verify new customers.
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. One simple integration; a flexible 360° solution which is scalable and secure.
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.