What is digital onboarding and how does it work?

What is digital onboarding?

Digital onboarding is the process of registering new customers or clients onto your company’s database and equipping them to use your services. It usually involves some form of identity verification as a security measure. Adopting digital onboarding at your company demonstrates that you’re keeping up with industry changes and striving to offer your users ultimate convenience without sacrificing the quality of service.

How does digital onboarding differ from traditional onboarding?

While the objectives and outcome are typically the same, there are two key differences between digital and traditional onboarding.

1. Physical presence not required

Traditional onboarding means that a customer or client needs to go into your shop, office or branch in order to verify their identity in person and be manually added to the system. This usually involves interacting with a staff member. They may also be required to fill in a form, although sometimes the staff member can ask them for information face to face and enter it into the system themselves. With digital onboarding, the user can remain in the comfort of their home, saving them time and effort. The self-service nature of digital onboarding also means that the user won’t face any additional delays, like a queue.

2. Customer or client not bound by a certain date or time

Being physically present at your shop, office or branch can be a challenge for many people, especially if the location is only open during traditional working or retail hours. Service users may struggle to fit the necessary visit around their own working hours or commitments like childcare. Travel costs and traffic may also need to be factored into their plans.

For users with disabilities or who are experiencing physical or mental conditions, it can be especially difficult to get to a physical location at a specific date or time and can require a considerable amount of planning. Most digital onboarding services are available 24/7, enabling the user to choose a time that’s most convenient for them.

Advantages of digital onboarding

Aside from its convenience, digital onboarding can offer you a host of other advantages. Below, we list some of the main benefits of digital onboarding.

Usually much quicker: Digital onboarding streamlines the entire onboarding procedure and maximises efficiency. User information can often be processed in real time and without the need for human intervention.
Cuts costs: One of the main costs associated with traditional onboarding is the need for knowledgeable staff. With an effective digital onboarding process set up, you can operate with fewer employees in your workforce. You may also be able to downsize your company’s physical presence. For example, many banks have closed branches in recent years as more of their services can be completed online. In some cases, remaining branches have been made smaller. Another cost that is reduced through digital onboarding is the need for paperwork and printing. This has the added benefit of being more environmentally friendly.
Fewer human errors and improved compliance: When the onboarding process is automated, incidences of human error are greatly reduced, cutting the risk of customer dissatisfaction and protecting your company’s reputation. Your digital system can also ensure that no information is missed during onboarding and can even maintain an audit trail for regulatory purposes.
Increased scalability: Digital onboarding systems are scalable – they are able to handle a growing number of clients without significant adjustments or an increase in administrative work for employees.
Possibility for integration with other systems: While digital onboarding can act as a standalone service, it’s more likely to form one part of the greater customer lifecycle. With the right software, you may be able to easily link your onboarding service and the data that it captures to other areas of your digital offering, like customer relationship management (CRM) systems and other business applications, providing the user with a holistic experience.

Disadvantages of digital onboarding

While digital onboarding offers many conveniences, the traditional system also has its advantages, some of which are lacking in its online counterpart. Below are some potential disadvantages of digital onboarding to be aware of.

Lack of human interaction: Many customers still prefer human interaction. Friendly and helpful employees can significantly impact the reputation of your company in a way that cannot easily be replicated by a digital system.
Can be challenging for some people: Digital onboarding can pose a particular challenge for users who are unfamiliar with technology. It may be a good idea to focus on user experience, ensuring that all online instructions are detailed and clear, that you provide the option for a mobile site or app with the same capabilities as the desktop service and that you offer responsive customer service from humans in case problems arise.
Problems or errors can take longer to resolve: If errors occur, it can often take a while to undo processes and change data that’s already been captured. Having a robust tech team to manage such eventualities can reduce this risk.
Security concerns: Storing any amount of data online, particularly sensitive information about users, comes with security risks. Even some of the world’s most well-known companies have suffered hacking scandals and other security breaches, and cyber criminals can be extremely sophisticated. To avoid the practical, legal and reputational fallout from a breach, it’s essential to have cutting-edge security systems and fraud detection in place and to reassure users that the safety of their data is a top priority for you.

How the digital onboarding process works

Depending on the types of services that you provide, there can be several stages to setting up digital onboarding. Let’s explore some common tasks involved.

1. Know your customers/clients

This stage involves knowing what your users’ needs are and how to set them up for success. This could range from embedded video tutorials for complex procedures to email reminders about completing the next steps in the onboarding process. You could even reach out to your users directly via surveys to gain a better understanding of what your onboarding platform needs to focus on.

2. Bring a talented tech team on board

Designing your onboarding platform requires a wealth of expertise, from data capture and security to user experience (UX), and it’s critical to have the right people on board. If you don’t have an in-house team to provide these services, you can consider outsourcing to contractors or a company that specialises in creating such platforms.

3. Set up remote identity verification

This is the most important part of the onboarding process and the key reason for its existence. It’s crucial to know that your customer is who they say they are and to ensure that no bad actor can assume their identity and access their account. Identity verification can take several forms, but typically involves the user submitting information along with identifying documents and biometrics such as a photograph or short video of themselves. If a user is submitting payment information, like credit card details, it’s also vital to ensure that they have legal access to that payment and that they are not trying to commit fraud. There is an array of sophisticated systems and software that you can use to automate identity verification and your cyber team can advise you on what processes work best for your needs.

4. Integrate with existing systems

This optional step is ideal if your company offers many services online, as once the user is onboarded, integration allows them to start performing other actions and completing any tasks that they need to do.

5. Gather user data and feedback for valuable insights

This can include information that the user submitted (subject to GDPR compliance) as well as data about how users are navigating the platform, where they spend the most time, whether they visit an FAQ page or Help Centre and more. You can also ask your users for feedback directly. For example, you could email them a survey asking about their onboarding experience. This information can help you identify any changes to make and determine levels of user satisfaction.

Embracing digital onboarding can take your company’s offerings to the next level and even give you a competitive advantage. Successful implementation of this process involves a deep understanding of your typical user and leveraging your existing systems alongside in-house or outsourced technical talent to create a seamless experience that’s superior to traditional, human onboarding.

What is digital onboarding and how does it work?

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