Earlier this year, FYNXT participated in the IFX Expo in Dubai - the largest B2B fintech exhibition there is. It wouldn't be an exaggeration to say that the event was buzzing with innovation and opportunity.
There, I had the opportunity to speak to several financial institutions looking to optimise their transformation agenda and get early wins. Of course, legacy modernisation and digitalisation were the hot topics all through the days, and if you weren't talking about them, chances were that you were already trying to do something about them.
The overwhelming consensus was that digital onboarding is a top priority of financial institutions, especially in the MEA region, where FinTech is well on the way to becoming mainstream with a 30% compounded annual growth rate (CAGR).
As quickly as a month after the pandemic had struck, banks and insurers started to see an uptick in the number of customers with instant access to their online banking, insurance and investment products.
According to MasterCard, 73% of the survey respondents in the UAE commenced leveraging contactless cards as primary facilitators. 84% of them opined that contactless payments are becoming increasingly ubiquitous and vital to the digital ecosystem.
Months later, HSBC UAE expedited a digital way to authorise transactions (via email) for its customers. Steps like these became the tip of the iceberg. Still, they indicate how quickly financial institutions are making adjustments to their customer-facing processes for digital onboarding.
In a recent survey, analysts at McKinsey revealed that more than 20% of the customers consider merchant onboarding a critical factor in the electronic payment and B2B banking experience. Looking at end customers, the number is sure to be much higher when you factor in how customer expectations are being elevated every day by the web and mobile experiences consumer apps deliver.
Undoubtedly, the customer has never had such high expectations of an easy, frictionless, and consistent way to access a particular service online.
For that reason, financial services companies and banks have to raise their game. However, they need to do it without being intrusive to the customer and without compromising on security standards. Simply put, financial institutions and banks have to walk a fine line between speed and safety.
Research by IBSi Intelligence suggests that 30-35% of adults prefer to remain disconnected from the banks due to their inconvenient locations and a lack of trust in their service. Their inclusion is further hindered by the archaic paper-based processes and poor digital capabilities.
In that light, the following trends seem to be the most relevant when it comes to digital onboarding adoption:
Onboarding within 10 minutes or less is preferable, especially with millennials who are not accustomed to waiting in line or filling out paperwork.
Capgemini's World Retail Banking Report 2021 affirms that more than 76% of customers expect a consistent experience across the channels. Well, that's the quick and easy promise that omnichannel onboarding gives them.
The regulatory diversity in the MEA region requires financial institutions to be consistent in the way they onboard their customers. They need to make sure that they comply with the best practices and standards laid down by their local regulators.
Amidst the pandemic, two-thirds of the customers abandoned their registration/onboarding applications - up from 38% in 2019. Intricacy, time, and security were the three most cited reasons for this disinterest.
Such data indicates that many customers are still not in sync with the financial services institutions (FSIs) as far as digital onboarding goes.
As for the financial institutions, the problems run deeper. In most financial service companies, back-office dis-orientation, lack of user understanding, feeble internal resources and lack of consistent training are commonplace.
Hence, the challenges, too, are multifield.
It's natural to think of onboarding in a single dimension as it is, after all, the process that new customers go through to validate their identity and profile and decide whether they should invest with you.
However, onboarding, in reality, is much more than just that. It's a whole life cycle where customers go from strangers to being truly committed, loyal and engaged. And when you look at it that way, it's pretty obvious that a robust digital onboarding experience is crucial to success.
At FYNXT, we don't believe that the industry needs to reinvent the wheel on this complex topic. In fact, the last thing we want to do is add more noise to a confusing landscape.
Instead, we believe in enabling a clear, common-sense approach to digital onboarding that allows financial institutions to attain real value from the activity, experience fewer frustrations and achieve their desired outcome.
Drop us a line to schedule a demo for your team. We'd love to show you how our solution can simplify onboarding for your customers.