The revolution of the banking registration

Monday, 26 november 2018 | Redacción CEU

The accelerated pace of digital transformation is helping to change our world in leaps and bounds. The unstoppable technology development is not only favoring the processes reinvention, but also a change in people's mindset. As the environment changes, individuals demand an experience which is more in line with this new scenario. They want to have their expectations met in the digital field. In the banking sector, the change is evident. Customers no longer feel the need to visit their branch offices. This fact, together with a development of the current regulations, has led to the appearance of new services that seek to please the wishes of this  new customers.  Digital onboarding stands out among all these services. What does it consist of? Why is it so disruptive?

Digital onboarding enables users to register in a bank through a mobile phone or a computer. They do not need to go to the branch office at any time or spend endless minutes filling in all kinds of  forms. They only have to show their ID card in a videoconference in order to complete this process successfully. Therefore, this tool enables people to register from any place, at any time and in a completely digital way thanks to biometric technology.

The reason why this process, whose design is based on digital identification, is spreading widely through the Spanish banking sector, is due to the legislative normalization that the financial world is experiencing in relation to the digital domain. In 2016, the German bank N26 was the first entity to offer the remote identification function in this country. Its initiative, along with the need to respond to the digital transition in which we are immersed, was crucial to paved the way that gave birth to two new rules of the Executive Service of the Commission for the Prevention of Money Laundering and Monetary Infractions (SEPBLAC from its initials in Spanish). These regulations marked a milestone. From then on signing up for a bank could be completely digital.

Lights and shadows of this change

Although from the perspective of the outside observer this service may seem superfluous, it brings about a very significant change within the financial world. It is the previous step to a full banking digitization. However, this is not the only benefit that accompanies the development of this formula. Digital onboarding also:

• Helps meet customers' digital expectations
• Speeds up the registration processes and can be used to attract customers
• Avoids unnecessary trips and reduces management times
• Attracts clients with younger profiles
• Manages creating new alternatives for approaching customers
• Opens paths that previously seemed closed

It is also necessary to pay attention to what may be the weak points of digital onboarding. Rather than disadvantages, this new type of service involves several issues which its promoters have to think about. Security is crucial in this type of digital identification. For that reason, experts are now working on the development of behavioral biometrics. Nevertheless, many of them say that banking controls can become more exhaustive when they are applied in the digital field. According to these specialist, digital onboarding is safer than the registration processes in traditional banks, since it can detect fraud or identity theft in a quicker and easier way. Among other things, it puts a greater emphasis on the detection of document forgery, makes a more homogeneous data collection and enables to preserve data and improve custody chain.

Another feature of digital onboarding is the loss of face-to-face relationship. Clients are used to receiving this kind of treatment. To achieve loyalty among digital users, this service must know how to stand out, be agile and intuitive and meet the needs of clients as much as possible. In fact, this new virtual relationship should not end here, but it should rather constitute a first contact point. In turn, when these digital clients go to the office, they should receive a treatment that matches the one that they have when they go on their banking platform. If there is no balance between branch offices and digital services, banks can lose a considerable number of clients. They had never had so many rivals as they have now, neither had the offboarding services been so quick.