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  • Writer's pictureW.B. King

Looking Abroad for Insights on Digital Onboarding Challenges and Opportunities

By W.B. King

In an effort to keep abreast of industry news overseas, Finopotamus recently attended a webinar hosted by FinTechConnect. The session covered aspects of digital onboarding for fintechs and financial institutions. While a wide-ranging topic, the four European-based panelists spent part of the hour-long conversation discussing the need for traditional financial institutions to streamline onboarding language, among other issues.

“There are many stupid words in the onboarding process. Traditional institutions can do a lot by skipping and deleting these words…make a list of all the words you have for onboarding and then try and explain every different word,” said TF Bank’s Credit Card Project Manager Julian Groetzbach. TF Bank, he explained, is a Nordic digital bank that is active in the German credit market.

Ebru Keskin (top left), Julian Groetzback (top right), Uwe Pfizenmaier (bottom right) and Mukund Umalkar.

Groetzbach added that while onboarding words related to fraud prevention, regulatory compliance or credit risk are required, there often remain words that have no reason to be tied to the onboarding process.

Panelist moderator and industry consultant Ebru Keskin agreed with Groetzbach but noted there are “loads of challenges” due to regulatory and legal requirements.

“There are places where there are pain points that cannot be overcome because of security, AML (anti-money laundering) and all of the rules and regulations and laws in place,” Keskin said. “So what you’re telling people is look at your process as a company or a customer to see where you can implement automation and artificial intelligence…to make it smoother and [it might be discovered] that there may be some unnecessary, old-fashioned way of verifying identity.”

Making Onboarding Part of Your DNA

Building off Groetzbach and Keskin’s exchange, ID Now’s Director of Product Management VideoIdent/eID/eSign Uwe Pfizenmaier said that while finding the right third-party partners is important to streamlining the onboarding process, financial institutions should first look within.

The Munich, Germany-based company offers a global solution for remote onboarding for industries under AML regulation.

“Making the whole process part of your DNA is important. Digital ID is here to stay,” Pfizenmaier continued. “So, companies need to embrace it and make it apart of their strategic initiatives…to roll it out across the organization and to embed it in all of their processes.”

Fellow panelist, Mukund Umalkar, director of Fintech Partnerships at ING (digital bank), added that an onboarding perspective differs depending on the entity and service offerings.

“Whether you are a fintech, a fintech providing services to a financial institution or whether it’s a fintech providing services to itself as a digital bank or you’re a traditional bank, the perspective and approach vary a little bit because the complexity is different,” he said. “But there is lots of opportunity with digital onboarding…this is the earliest ways to have customer interaction.

Since there are many third-party players in the space, Umalkar said an organization must have the ability to determine what strengths these third-party players bring to the table and also understand their road map.

“You will potentially need a mix of different providers – solutions providers and data providers,” he said. For digital onboarding to be a successful experience, he said an organization must also pay close attention to its control frameworks and risk frameworks.

“You might not find one solution that fits all but you should be open to using different solutions that hopefully work together along with your internal solutions as well,” he noted.

Collaboration is Necessary

Keskin’s parting thought: The key to a successful digital onboarding solution is collaboration.

“Traditional banks and fintechs have to work together instead of competing because ultimately they are all trying to do the same thing…prevent crime and have good user experiences for new customers…being verified in way that is easy and accessible,” Keskin said.

In Groetzbach’s view, financial institutions should look at digital onboarding as a great opportunity because it develops two important variables: process and user experience.

“If you look at your conversion rates…if you have digital onboarding and good processes, you will have a massive improvement rates, which will improve your business and business performances,” he said.

Pfizenmaier’s message to fintechs is to keep challenging the status quo because these efforts will ultimately improve the digital onboarding experience across the boards.

“This helps us advance in terms of technology and reduces the lack of trust in digital identification,” he said. “The better the technology, the higher the trust and the better the user experience.”

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