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Digital Onboarding as a Tool for Growth

Providing your potential clients with a means to seamlessly complete an onboarding process anytime anywhere, can drastically increase your reach and improve your conversion rate, while also reducing your customer acquisition cost.

Andy Bermudez

Andy Bermudez

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Published 23 Mar, 2022 6 minutes of reading

Where customer onboarding is today

Consumer expectations of digital accessibility to products and services have risen dramatically in the past few years.  Companies like Uber, Spotify and Airbnb have established new standards that raise the expectations at which organizations across industries are striving for. 

These new expectations are creating even greater pressure to build sustainable innovation through customer experience. It’s astonishing to think that among financial institutions (FIs), only 8% of financial service onboarding applications, which include personal account opening creation, can be completed on smartphones. Pair this with the fact that nearly one third of consumers say they would leave their existing FIs for increased mobile capabilities.

Customer onboarding in the context of experience-driven solutions has so much to offer. Financial institutions in particular, with the need to adhere to regulatory compliance, internal rules and regulations, and integrate with numerous core systems, can see tremendous benefit from a modern onboarding solution. Benefits include reducing friction when customers fill out relevant information, reducing errors at the same time, as well as automation across numerous steps that significantly reduces the time it takes for your customers to onboard with your products and services.

Digital Onboarding Path


Onboarding customers into long-term relationships (the goal of nearly every FI) as they establish the products and services they’ll use, share information, and build trust… these are just some of the core factors that drive success in gaining and retaining those same customers.

Innovation drives long-term success

From the very outset, FIs that are able to better serve the digital needs of customers based on newer, more rigorous standards, across all digital spaces, will immediately set themselves apart as they’re able to innovate and drive value to their customers through their digital channels.

There is a gap to navigate, between historically “hand-driven” processes when onboarding new customers, to arrive at a more modern solution that seeks to automate steps and reduce the friction of every element of your customer onboarding.

The fundamental components of customer onboarding

Take a step back, and look at the fundamental components of building a financial product-based digital onboarding solution. Onboarding a customer involves: 

  1. Gathering customer information
  2. Validating their identities 
  3. Filtering them for potential risks
  4. and finally confirming the business relationship with a signature. 

Even with this most basic framework, there are some clear challenges to consider. For instance, how do you:

  • Know the person is who they claim to be?
  • Deal with user-generated errors (typos)?
  • Get a signature your compliance team will accept?
  • Assist users closely while interacting remotely?
  • Last but not least, how do you guide a potential customer through a potentially lengthy interrogation while keeping them engaged throughout?

The truth: there is no one single tool, no “one size fits all” solution to these issues. Simply put, the needs of any particular organization always differ based on their industry, their internal rules and requirements, and their existing systems they need to consider when integrating them into a proper onboarding solution.

The correct approach is to decompose each onboarding component, understand their requirements, and build out each one in the most suitable way possible for your organization.

Gather customer information

The information that organizations gather regarding customers in the context of onboarding is usually personal information, i.e. information that will be used to validate their identities. Onboarding a customer for the purposes of using digital products over an application or website requires a login. This login necessarily needs to be connected to validations, and also allow authentication to pass between the front end where a customer interacts with your organization, and back end services that are used during the onboarding. 


Two smiling people looking at a computer

A system that allows users to log in once and then access multiple services all integrated into one solution is known as Single Sign On, or SSO. Identity and Access Management software such as Keycloak or AWS Cognito both help facilitate this key part of onboarding. 

And since this step involves generating a new customer, it’s important to validate that the person entering the initial information is who they say they are. So, this part of an onboarding solution is usually accompanied by validations through mail or mobile, using methods such as OTP (one-time password), or 2FA (two-factor authentication).

Validating user identification

Just gathering someone’s personal information via a few forms and input fields still leaves you in the dark about who this person really is. Fortunately, the tech available in most personal computers and mobile devices allows us to take advantage of some interesting potential solutions.

For example, some solutions offer to generate a video call with a user while they’re onboarding. This, however, creates a scheduling dependency with an onboarding specialist servicing that customer. We can divest from dependencies like this with other tools that allow for increased independence, such as using biometrics: face and finger scans, iris prints, and liveness detection. Modern onboarding solutions can also validate user identification through simply taking pictures of their relevant documents.  These tools all take advantage of hardware readily available in most personal computers and mobile devices nowadays.

Let's review a couple of example tools that help automate validating user identification.

Liveness detection/ Face recognition

Liveness detection is the ability of an artificial intelligence computer system to determine that it’s interacting with a physically present human being and not an inanimate parody artifact.

computer analysing if a person is real or not

Validating the identity of a customer during their onboarding depends on the camera capabilities of their device, and should allow the process to be done between both desktop and mobile.

Optical Character Recognition (OCR)

Optical character recognition technology is a business solution for automating data extraction from printed or written text from a scanned document or image file. OCR technology can then convert text into a machine-readable form to be used for data processing like editing or searching.

OCR defines the process of mechanically or electronically converting scanned images of handwritten, typed, or printed text into machine-encoded text. Think of it as the process of turning analog data into digital, but automated on a scale that comes with numerous advantages.

man looking through a magnifying glass

The benefits of OCR include reduced overhead, much faster data extraction, and takes innovative steps to be much more seamless than potential manual entry, which is equally susceptible to mistakes, and is generally slower as the amount of information required increases.

For Modyo, OCR is a process of extracting information focused on a set of defined IDs that are incorporated into any onboarding solution’s Know Your Customer (KYC) module.

Know Your Customer (KYC): filtering customers for potential risk

One of the main challenges during KYC is to create a light-weight questionnaire for the user without jeopardizing any legal action due to under-compliance, nor increasing the internal investigation work to learn enough information about your potential customer.


A great portion of any digital onboarding is spent on KYC, and hence it’s important to pay special attention to how the platform communicates and interacts with the client according to the product they wish to acquire and their risk level.


person thinking of his password


Confirming with a Signature

Digital signature tools are becoming ever more popular and are available as SaaS. However, here are the important elements to know, the eIDAS (electronic IDentification, Authentication and trust Services—a convenient, secure authentication regulation designed to drive innovation) establishes three types of digital signatures that can be grouped in the following segments: 

  • Simple or Basic electronic signature (SES): 
  • Advanced electronic or digital signature (AES)
  • Qualified advanced electronic or digital signature (QES)

By rule of thumb, FIs need to ask the following questions in order to set the principles for the digital signature process within their organization.

  1. Authenticity: Does the signature need to uniquely link to the signatory? 
  2. Identity: Do we want to make absolutely sure we can identify the signatory?
  3. Integrity: Do we want to detect any changes in the document after the signature?
  4. Authentication: Do we want to be 100% confident that the signature is created under the sole control of the signatory?

And depending on their needs, organizations can set the constraints and scope for the digital signature that they require.

People Gravitate to Companies with better Customer Onboarding 

Providing your potential clients with a means to seamlessly complete an onboarding process anytime, anywhere, can drastically increase your reach and improve your conversion rate, while also reducing your customer acquisition cost. The fact is, across all possible experiences that customers can have with your organization, you only get one chance to make a great first impression with them, and that begins with a great customer onboarding.

With solutions implemented in the banking, educational, and wealth management industries, Modyo’s Digital Onboarding team brings together the right people, tools and processes that can dramatically improve your time to market, and ability to innovate your customer onboarding solutions. To learn more about Modyo’s digital onboarding solutions, schedule a session with us here.

Photo by Brandon Mowinkel on Unsplash.

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Andy Bermudez

Andy Bermudez

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