How to Optimize the Onboarding Process in the Digital Age?

As digitization continues to advance, the way companies acquire and register new customers, also known as the 'onboarding' process, is becoming increasingly crucial. This process is not only about attracting customers but also effectively verifying their identity.

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Customer identity verification is a matter of significant relevance, especially for companies with capital at risk. This includes companies across various sectors, such as insurance, financial or fintech firms, casinos, and investment entities, among others. These businesses must be diligent in identifying their customers to mitigate risks associated with fraud, such as identity theft.

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If a company adopts too relaxed an approach in this regard, it can become vulnerable to these risks. However, it's also essential to avoid swinging to the opposite extreme. There's a delicate balance between being restrictive and creating friction during the onboarding process.

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If too much information is requested from the customer during this process, or if the process becomes overly complex or tedious, unnecessary friction is likely to arise. This added friction for the applicant can lead to a reduced flow of customer attraction, resulting in fewer completed applications.

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Therefore, the customer onboarding process should aim to enhance the user experience without compromising business security, all while adhering to regulations imposed by the country's regulatory bodies.

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Depending on how the applicant onboarding process is designed, the absence of identity verification and risk detection services during this process can lead to unnecessary additional costs for businesses. These risks can involve fake or temporary email addresses, high-risk IPs, or invalid phone numbers. For example, businesses may face extra expenses due to:

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Querying credit bureau services for applicants providing temporary or fake email addresses.

Consulting KYC providers for users providing non-existent mobile numbers.

Accessing government services with non-existent data.

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It's crucial, therefore, for companies to invest in identity verification and risk detection technologies to optimize this process and avoid incurring these additional costs. At Trully, we recommend designing an incremental onboarding approach that starts with the least costly services. For instance, when our clients incorporate email analysis, IP addresses, and geographical location in the early stages of their onboarding flow, they discard risky users from the outset and have managed to reduce credit bureau query and KYC provider costs by up to 10%. Being strategic in the onboarding process can yield up to 25% savings in your customer conversion cost.

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This strategy helps identify potential risks from the start, allowing companies to weed out fraudulent or risky applications before incurring additional expenses. By doing so, companies not only save costs but also enhance the efficiency of their onboarding process, making it more attractive to legitimate customers.

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At the end of the day, an effective onboarding process protects the company and its assets while delivering a seamless and pleasant experience to the customer. By adopting a strategic and incremental approach to onboarding, companies can achieve precisely this, ensuring their security and long-term success in today's competitive digital world.

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Interested in learning more about us or have feedback on this article? Reach out to us at fernando@trully.ai

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