KYC and Customer Onboarding: Balancing Compliance and User Experience

Customer acquisition is a primary goal for every business. As important as it is, there is something even more important, customer onboarding. Your work does not end after you’ve successfully attracted and converted your prospects into customers. Customer onboarding kicks in immediately to help you retain the customers you’ve acquired, educate them about your product and ensure they get the actual service they got signed up for.

What is Customer Onboarding?

Customer onboarding is the process and activities involved in introducing a new customer to your product and making them comfortable with it. It entails helping customers make a smooth transition to using your product and helping them get the most value out of your offering.

This whole process shows how customer onboarding is a continuum; an onboarding opportunity arises everytime there’s a gap between what the user is currently doing and what they’re capable of doing based on what’s available on your platform.

A positive and effective onboarding experience is a critical foundation for long-standing customer relationships. It shows your customers that they made the right choice and helps drive retention. When done well, it reduces acquisition costs and can turn your turns customers into brand advocates.

Common Onboarding Challenges

Onboarding is a critical part of a customer’s experience, and statistics show that 89% of consumers move to a competitor due to a poor onboarding experience. Here are some onboarding challenges businesses must overcome when defining an onboarding flow:

• Integrating KYC

Businesses must not just onboard customers but do so securely. KYC checks mitigate the risk of onboarding customers involved with money laundering, fraud, or other illegal activities like financing terrorism. As crucial as KYC is, the complex and evolving nature of the identity verification space makes it difficult to implement.

• Ensuring Compliance

Businesses must adhere to the stringent regulations of the industries they operate in while ensuring that they do not add more friction to the onboarding process.

• Time-consuming onboarding

Customers have little or no patience for slow onboarding processes and expect a smooth and fast experience. The longer it takes, the higher the likelihood they drop off.

Implementing effective customer onboarding plays a vital role in creating strong first impressions and forming lasting relationships. Not only that, but it also helps onboard customers at a faster rate and higher volumes.

Meeting these customer expectations with a manual process is impossible, meaning businesses will have to adopt a digital approach.

• Collecting Customer Personal Data

Collecting as much customer data as possible is vital for KYC and compliance. The typical data collection process involves customers providing their information by filling out several forms, whether online or physically. The problem is that no one likes filling out forms, particularly long ones. Not only that but asking for too much personal info increases the risk of customer drop-off.

• Eliminating Friction from Onboarding

Customers’ appetites and needs have changed in response to today’s technological evolution, and so have their expectations of businesses. They expect a truly digital experience during the onboarding process.

A fast way to lose customers is with a manual process that requires them to photocopy documents, scan them, and head down to a physical location for processing. Businesses must evolve and adapt to meet customers’ needs by leveraging digital onboarding solutions. However, overhauling and changing a critical operation like onboarding is not a walk in the park. Still, to survive in the new digital-first economy, businesses must revolutionize and adapt their operational models to fit the new normal.

How to Balance KYC, Compliance, and Customer Onboarding

KYC compliance is a double-edged sword businesses must deal with. On one hand, customers expect swift onboarding with minimal checks and friction. On the other hand, businesses must mitigate fraud and ensure regulatory compliance. Onboarding and compliance do not have to be at odds with each other. Here are some ways to strike a balance between them:

• Using a Digital Onboarding Solution

One way to create a smooth, fast, flawless, and secure onboarding experience while meeting compliance requirements is using digital solutions to eliminate manual steps.

• Split KYC Checks into Levels

Have you downloaded a mobile app that flooded you with multiple popups requesting access to your files, camera, location, microphone, and more? You were at least turned off, presuming you did not uninstall the app. Customers have the same response to high-friction onboarding flows. No one wants to go through a lengthy verification right from signing up.

Mobile apps solved this issue by only asking for permission at the point of action. For example, apps like Tiktok, Snapchat, and Instagram only ask for access to your camera when you want to take pictures. By doing so, users are more likely to accept the request.

Likewise, by introducing KYC checks at the right point of the customer’s journey, businesses can drastically reduce the drop-off rate. They must know when to request KYC-related information from customers and only ask at that moment. This is what OurPass did; they integrated a multilevel KYC check system into their onboarding flow and reduced their drop-off rate.

Onboard Customers Securely and Seamlessly with Dojah

Effective customer Onboarding shouldn’t be a struggle. Dojah is the partner you need to overcome your onboarding challenges in an efficient and compliant manner.

By leveraging our APIs, widgets, or no-code tools, you can automate your onboarding process, reduce fraud and achieve regulatory compliance by delivering a complete suite of Identity Verification and Fraud Prevention solutions via a single API.

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