Banks using the latest technology can significantly improve the onboarding process, but unfortunately, not all banks take advantage of technology. The onboarding process at many corporate banks still requires clients to complete a complex application process. However, some corporate banks implement innovative technology to make the onboarding process less complicated. With the help of advanced technology, the onboarding process at corporate banks becomes more accurate, faster and cheaper. In addition, the latest technically advanced onboarding processes give corporate banks insights into the preferences of their customers.

For banks, the advantage of an efficient onboarding process is that as soon as the onboarding is complete the bank can begin profiting from fees and charges. For customers, the advantage of a speedy and straightforward onboarding process is that they can start using their business accounts within a short time.

 

KYC Starts with Onboarding

Regulators are fully aware that making the important decision of which businesses to deal with and which to approve depends heavily on due diligence and Know Your Customer (KYC). With the correct and thorough knowledge of your customer you can make correct judgments. In many cases, sloppy due diligence and KYC can lead to the loss of a bank’s reputation and even to financial and legal complications.

During a bank’s onboarding process for corporate customers, there has to be a balance between mitigating risk through due diligence, beneficial ownership verification and KYC and the need of the customer to speedily complete onboarding and start doing business.  A bank’s onboarding process can be a key factor for businesses choosing a bank for their corporate account.

 

Online Onboarding for Corporate Bank Accounts

In the past the traditional onboarding process required a visit to your chosen bank branch and endless paperwork. Today it is possible to complete the initial stages of onboarding online. With online onboarding the customer can communicate with his banker; get clear instructions about what is needed and even complete the initial forms online. Some may feel that this method lacks the face-to-face personal connection of a conventional onboarding process but it does make onboarding faster, easier and more straightforward. If a bank has a dedicated staff of people dealing with online onboarding, then the customer can still benefit from personal service and receive online support throughout the process.

 

Advantages of Corporate Bank Account Online Onboarding:

  • Online onboarding is faster – less time spent traveling to your bank branch; sitting in meetings; waiting for an appointment to be available with your banker; waiting in lines etc.
  • Online onboarding is more eco-friendly – less paper is wasted, less fuel energy used in traveling to the bank.
  • Online onboarding is technically advanced – Use of technology makes the bank more efficient and lets customers know the bank is progressing with the times and using innovative technology.

Balancing an Efficient Banking Onboarding Process with Risk Mitigation Processes

While banks strive to make their onboarding process efficient, speedy and easy they also have to ensure that they have completed all risk mitigation processes including KYC, due diligence, beneficial ownership verification etc. The responsibility that banks bear in handling their customers’ funds and property makes them vulnerable to money launderers and criminal elements that are eager to take advantage of the banks’ position. Anti-Money Laundering (AML) regulations, directives and guidelines are in place to ensure that banks, and their customers’ assets are protected.

The AML process starts in onboarding to prevent any new clients with an ulterior motive from getting a foothold in the bank. Banks are legally required to include AML in their onboarding process so that potential customers with a criminal agenda are rejected and only legitimate customers are approved.

 

The Online Onboarding Process and Ant-Money Laundering

AML is standard practice with traditional onboarding but when it comes to online onboarding implementing AML is even more complex and even more necessary. The potential customer’s AML risk needs to be assessed without a face-to-face encounter with the bank. To accomplish this the digital onboarding system using a configurable rule engine calculates the potential customer’s AML risk and classifies each customer as a low, medium or high AML risk. The AML risk level is determined by many factors including PEP matches; the type of industry the company is involved in; the company’s financial history; the owners of the company and their financial and criminal history; negative media matches; company ownership structure; the country of incorporation and registration; company assets; jurisdiction where the business operates etc.

Click here to learn what makes a company high risk.

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