Customer retention is vital for every online business because no one wants to lose customers quickly after working hard to get them. Hence, you should take the necessary steps to make their experiences enjoyable. 

After getting a new customer, the next step is onboarding them to your platform. This process should be quick, without hassles, safe and secure. 

Consumer onboarding is hugely beneficial to online companies. It helps them track their customers better and pitch personalized products and services. 

However, despite these benefits, it has its risks. For instance, where typical brick-and-mortar businesses can accurately verify their customers’ identities, online companies may find it challenging. 

Thanks to technology, digital onboarding platforms make things easier for online companies. This article provides in-depth information about digital onboarding, its challenges, and how tech makes things easier.

What is digital onboarding?

Digital onboarding, also known as remote onboarding, refers to how companies, organizations, and businesses incorporate or acquire new customers online. With digital onboarding, you can use technological tools to comfortably help your clients get used to your products and services.

The significant difference between digital onboarding and the traditional onboarding process is that it takes place online. Hence, your customers can complete the process wherever they are and don’t have to visit your physical office. 

With more companies migrating most facets of their business online after the COVID-19 pandemic, digital onboarding is becoming increasingly in demand. It has numerous advantages, and you should consider it for your business if you are yet to. 

Who can benefit from digital onboarding?

Businesses that operate and serve customers online need digital onboarding. The companies that can’t do without it include eCommerce ventures, online-based financial institutions without other means of registering customers, online merchants, etc. 

Besides orientating customers, you can use digital onboarding to manage remote staff. This saves time on paperwork and physical handling of employee data. 

How does the digital onboarding process work?

Digital onboarding takes place online and through a platform that the company developed in-house or outsourced. The organization ensures its customers comply with onboarding requirements and eventually become loyal through the platform. 

The onboarding process begins when a customer signs up to your service via their device. Afterward, they provide the details you need from them step by step. 

A digital onboarding platform’s design should be suitable for customers. In addition, it should meet your company’s “Know Your Customer” (KYC) and Customer Due Diligence (CDD) standards. 

The remote onboarding process marks when you begin a relationship with a customer. Therefore, strive to make an excellent first impression by ensuring the process is fast and smooth. If the procedure is long and stressful, the customer would likely leave.

On the other hand, it is essential to know your customer as much as possible. Therefore, you need a digital onboarding platform with the right balance of features to win on both sides. 

Why is digital customer onboarding important?

The world continues to witness significant technological advancements in every aspect of life. As a result, technology influences the way humans do things, and businesses are not left out. 

Companies are constantly looking for ways to get new leads or customers, convert them to sales, and retain them. Digital onboarding is a strategy companies employ to boost customer interaction, data collection, and lead conversion. 

Therefore, incorporate customer onboarding into your strategy to become a forerunner in your industry and take your business to the next level. Doing this would also result in the following benefits:

  • New customers after the completion of the onboarding 
  • Improved customer experience and enhanced loyalty
  • Straightforward processes that are easy to understand
  • Faster and cheaper onboarding because of automated processes
  • Easier fraud detection and prevention 
  • Increased operational effectiveness

What challenges does digital onboarding face?

In the early days of remote onboarding, most companies only asked their customers for their email addresses, credit card, or PayPal accounts. Although that process worked, many fraudulent acts and identity crimes showed it needed better security measures.  

Also, many customers viewed the verification steps required for digital onboarding as hindrances and sought companies with less stringent measures. Understandably, customers want a quick process, but companies also need to ensure their onboarding process is security-proof. 

Besides these challenges, other factors affecting digital onboarding include: 

  • KYC software and services are expensive
  • Fraudsters can easily falsify customer identities, and scam companies
  • Fraudsters can beat biometrics easily and commit crimes 
  • High customer abandonment rate 
  • Frequent regulatory changes 

Features of an excellent digital onboarding process

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As mentioned earlier, digital onboarding is a way to welcome and retain your customers. After investing so much in getting a customer to sign up with you, it will be disastrous if they lose interest because they found your onboarding process cumbersome. 

To prevent such from happening, design or outsource the digital onboarding process and ensure it is:

  • Easy 
  • Fast
  • Seamless

Most customers don’t enjoy filling out lengthy forms or answering in-depth questionnaires before using products or services. If they find such things cumbersome, they may quit the onboarding process. Thus, your digital onboarding process should be one that your clients can quickly complete. 

The process should be easily understandable. In addition, let customers know how long it takes and the steps needed to complete it. Therefore, it is advisable to have a simplified onboarding process. 

Include safety measures in your digital onboarding process. However, if those efforts are too long or stringent, customers may get discouraged and quit. So, find the perfect balance. 

Irrespective of your onboarding flow, get information about your customers (IP address, email address, credit card details, etc.). However, don’t force them through a compulsory and difficult KYC choke point nor rely on a costly third-party verification service. Instead, use your customers’ data to build their user profiles. 

Also, adopt risk scoring during each step of the onboarding process. A risk scoring feature helps you determine if a customer is trustworthy or a potential risk. 

If the feature determines a customer is a threat, you can either implement a stricter security check or manually review them. If further checks confirm the customer to be dangerous, block them.

Technological solutions to digital onboarding challenges

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Companies sometimes struggle to balance knowing more about their customers and maintaining a good user experience and security. However, they can achieve a perfect balance by adopting vital technological tools that improve the working process. 

There are several tools that can aid the digital onboarding process. These include:

Electronic Know Your Customer tools

Electronic KYC (eKYC) tools became more sophisticated and easier to use in recent years. You can integrate these programs into your digital onboarding platform and get valuable information about a customer. 

Most times, the only thing needed is the customer’s full name and a scan of an official document. After submitting these, the eKYC tool performs a real-time check to determine the authenticity of the client’s details. This way, there are fewer mistakes or fraudulent purchases.

Digital footprint analysis

You can know more about your customers without asking them for verification using digital footprint analysis. This process helps collect data about your customers once they visit your website. However, to do so, you need the following basic information:

  • Email address
  • Phone number
  • IP address

A digital onboarding tool with an efficient fraud detection and prevention system can spot fraudsters who register with fake or virtual phone numbers. Also, excellent data enrichment and management tools provide access to information for spotting red flags and bad customers. 

Some of the signs of a fake or fraudulent customer are: 

  • Lack of social media presence
  • Use of VPNs, suspicious proxies, or Onion Routing project (Tor)
  • Use of unrecognized devices
  • IPs that appear on spam blocklists

If your onboarding tool analyzes the information from several sources, the data is enough to create a risk score. Hence, you’ll know if a customer is real or fake. You can either accept or bar a customer from your platform with such analysis. 

Dynamic friction

Dynamic friction occurs when the risk score from a user’s data is not conclusive, and you need more information. With dynamic friction, you can break KYC into light and heavy processes.

The light KYC stage filters out unwanted users. However, customers passing through this phase who are likely to pose a risk go through heavy KYC verification. 

Besides the techniques outlined, other tools that can boost fraud detection and aid better digital onboarding include: 

  • IP analysis modules
  • Device fingerprinting solutions
  • Email and phone analysis data enrichment modules

Conclusion

Digital onboarding is key to every online business. It’s critical to balance user experience and security. However, safety is a significant challenge in digital onboarding because of the increasing fraud rates. 

Regardless, there are technological tools to help you alleviate such issues. These include eKYC, digital footprint analysis, dynamic friction, IP analysis modules, device fingerprinting solutions, etc. If your onboarding platform integrates these tools, it will be easy, fast, and seamless.