KYC and the Bank Customer Onboarding Process

Banks need to comply with Know Your Customer regulations that require them to verify the new customer’s identification by using a specific online procedure. When an individual or company applies for a new bank account the bank must comply with anti-money laundering regulations and fulfill KYC requirements to insure that the banks services are not misused. Part of the bank’s comprehensive customer onboarding process included compliance checks which investigate your tax affairs and check your banking history.

 

How Does the Onboarding Process Work for New Bank Accounts?

In the past the customer onboarding process at traditional banks involved a lot of paper work, face-to-face identification checks, interviews and manual compliance checks. Today the onboarding process for new bank customers has been streamlined but the compliance checks and legal requirements are still quite a time-consuming process involving analysis of masses of data. Efficient new technology helps to make the onboarding process a painless customer experience.

 

An Efficient Onboarding Process for Banking

  1. Banks can remain competitive by digitizing the customer onboarding process.
  2. By using a transparent onboarding process focused on the customer experience banks can prevent losing customers to other banks.
  3. With an efficient KYC onboarding process banks can onboard more new clients in a shorter amount of time.
  4. Banks need to constantly update their customer onboarding process to remain competitive, reduce costs and improve the customer experience.

 

Onboarding for New Business Bank Accounts

The corporate client onboarding process needs to be constantly updated with current advances in technology. Many banks neglect this important part of banking leaving business clients to pay the cost and waste their time wading through complex paper work and inefficient procedures. With the help of startups, banks can gain insight into the onboarding experience from the customers’ point of view and help improve the system with innovative technology and digitalization.

 

Corporate Banking Customer Onboarding Benchmark Survey

With the help of the corporate onboarding benchmark survey banks can gain an understanding of how their onboarding process is working, how efficient is it, what is the customers’ experience and how does their onboarding process compare with competitors. The onboarding benchmark survey looks at key factors in the onboarding process including your degree of digitization and helps financial institutions spot what actionable changes need to take place without completely re-designing their system.

Much has changed in the world of banking since the financial crisis. There have been countless innovations and changes in regulations. The Open Banking initiative and PSD2 are just two examples of how new regulations have created an opportunity for new comers to the financial ecosystem. The dissatisfaction customers felt with traditional banks; the advent of Smartphones and our reliance on connected devices; innovative technology and the change in regulations have all contributed to creating the perfect ground for FinTech to grow and be a current hot topic.

 

The Importance of FinTech

When a market is more competitive it is always better for the customer and for the development of the industry. That is what FinTech has done for finance; it has given it a surge of energy and accelerated banking into the future.

  • Payments – One of the areas affected by FinTech are payments where competition has driven transaction fees down; FX commission down and dramatically speeded up the payments process.
  • Accounts – Accounts are another area affected by FinTech. With the digitization of bank accounts FinTech companies and challenger banks can now offer clients easy access to international banking services for a fraction of the price. Now even the unbanked or underbanked have access to financial services where as their application for a current account would have previously been rejected by traditional banks.
  • Lending – We now have FinTech lending platforms that can now offer better terms than ever before. These alternative financing solutions have lower interest rates, lower fees and often flexible repayment options for both businesses and individuals. Customers who have previously been turned down by banks when seeking loans now have an alternative.

 

Is FinTech the solution to all Financial Services?

FinTechs still rely heavily on their relationship with traditional banks who often act as a payment platform or transfer intermediator. Using an established bank as an intermediary is often economical and time-saving. Doing away with the legacy of traditional banking infrastructure may take time. It remains to be seen how long FinTech companies and traditional banks will still need each other.

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