What is Digital Onboarding?
The term “onboarding” refers to the process of integrating new members into an organization and/or signing up new customers. Typically, these processes will verify information – identity verification, age verification, and address validation are some examples.
Digital onboarding simply refers to when these onboarding processes are digitalized and conducted online. Digital onboarding processes can even be automated by integrating APIs.
Digital onboarding is sometimes referred to as “remote onboarding”. Remote onboarding refers to the onboarding of employees and customers without requiring them to be physically present – something that is enabled by the digitalization of the onboarding process. Today, these terms are largely synonymous.
KYC for Digital Onboarding
Know Your Customer (KYC) is a term that refers to procedures and mechanisms that are used to verify the identity of customers before conducting business with them – accordingly, KYC is intrinsically linked to Identity Verification.
When conducting KYC checks, a business will typically be verifying:
- That an individual exists
- Whether that individual is exactly who they claim to be
- Whether that individual is eligible to receive the product or service in question
- Whether that individual poses a threat of money laundering or other such crime
By verifying this information immediately at the time of signup/onboarding, a business, institution or organization can drastically reduce the chance that the individual is a bad actor who will cause harm.
The digitalization of KYC checks has revolutionised customer and employee onboarding and enabled incredible levels of accuracy, efficiency, automation and integration.
Why is Digital Onboarding Important?
Creating a world-class customer onboarding process is essential because it is often the start of the customer’s journey with the business. Accordingly, a bad customer onboarding process can ruin the customer’s perception of the company and lose their business on day one.
In the past, the customer onboarding process demanded that a company dedicate human resources to manually checking and validating information. This incredibly inefficient process drove up costs for the business and often produced a bad customer experience.
Even today with the help of digitalized tools, the process of manually onboarding new customers and employees can be cumbersome, inefficient and costly – the need for an employee to manually complete the required identity verification and data validation checks consumes valuable human resources that can be better spent elsewhere in the business.
Instead of manually completing the onboarding process, businesses can now automate it by integrating APIs.
API for Digital Onboarding
Application Programming Interfaces (APIs) can be understood as mechanisms that enable two or more software components to communicate with each other using established protocols and definitions.
In the context of identity verification and data validation – such as the customer onboarding process – an API enables a business to build the necessary software into the relevant customer and employee onboarding processes, ensuring a seamless and efficient verification process.
The verification of an individual’s identity and the validation of extensive personal information, such as employment history, is an intensive administrative process that consumes resources if done manually.
Digital onboarding APIs enable the seamless integration of identity verification and due diligence checks, which greatly improve the onboarding processes by boosting efficiency, increasing accuracy and reducing costs.
Digital Onboarding for Customers
Onboarding is one of the most important parts of the customer journey. As one of the customer’s first experiences with the company, a bad onboarding process can turn the customer away and lose their business.
More intensive customer onboarding processes – such as those that require identity verification and data validation – have the potential to be arduous, inefficient, and frustrating for the customer. In such circumstances, digital onboarding procedures enable businesses to offer world-class, streamlined and effortless that create a great impression on the customer.
Tools for digital onboarding enable customers to submit all the necessary documentation necessary from the comfort of their homes, as well as have their identity verified and data validated in a matter of minutes. Digital onboarding tools, therefore, facilitate a great customer experience while helping the business to save time and money.
Digital Onboarding for Employees
Digital onboarding tools are also used in the onboarding process of employees. Businesses with a high staff turnover – examples include large retail chains and manufacturing companies – need to easily and quickly vet and onboard new employees.
To screen out prospective employees with red flags – such as criminal histories or who have been implicated in fraud in the past – digital onboarding tools enable businesses to verify identities and validate information.
Digital onboarding tools and the integration of APIs allow this onboarding process to be conducted seamlessly, efficiently and cost-effectively. Whereas in the past this onboarding process may have required a large human resources department to manually process every new employee, digital onboarding tools enable the entire process to be automated. This saves time and money while also improving the experience for new employees.
How to Ensure Regulatory Compliance During the Onboarding Process
South Africa has a variety of AML/CFT regulatory requirements for identity verification and data validation. Non-compliance with these regulatory requirements can lead to the regulator imposing serious penalties on the offending business, so ensuring compliance is essential. The digital onboarding process – especially those that are automated using APIs – empower businesses to ensure regulatory compliance at all stages of the onboarding process.
Digital Onboarding Services for South Africa
As South Africa’s leading provider of world-class due diligence and digital-onboarding solutions, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. By supplying high-quality tools like AVS checks, we empower businesses to verify identities, validate information, secure transactions, and mitigate risk. To experience our full suite of advanced due diligence services, book a demonstration by contacting our team here.
