In a previous blog, Plaid’s Zak Lambert outlined the evolution of customer onboarding and explained how Open Banking holds the key to vast improvements in customer onboarding for the digital era.
Better user onboarding is key to digital finance
Based on a new white paper from Plaid, this blog reviews the benefits that accrue to companies that opt for fully-digital onboarding.
An important study from digital verification specialists Signicat shows[1] European financial institutions lost up to €5 billion last year as users abandoned complex and time-consuming onboarding procedures, with 68% of Europeans surveyed saying they had abandoned complicated onboarding.
The difficulties users experience in onboarding, from complex information requests to document uploads and e-signatures, suggest it’s time to take the next step in onboarding and enable consumers to access their financial lives online rapidly and with minimum hassle.
In our new white paper, we clarify why the new era in onboarding will be fully digital – and how Open Banking plays a significant role in its development.
Open Banking: onboarding unchained
Introduced under the provisions of the EU’s second Payment Services Directive (PSD2) in 2018, Open Banking affords a great opportunity for European financial services firms to speed up onboarding and KYC checking.
Thanks to PSD2’s mandate for all banks to make their customer data available to other Trusted Third Parties, or TTPs, companies can make identity and document verification more efficient using online channels.
Open Banking makes improved onboarding possible through API calls made on a customer’s bank account. API calls can be used to speed up customer onboarding by enabling the automation of checks such as sanctions screening, anti-money laundering, or in obtaining payment and credit histories for loan and mortgage applications.
“By integrating a customer’s bank data into user onboarding, the time taken can be reduced from days or weeks to just a few minutes.”
Permissioned third parties are now able to access a customer’s bank account data and integrate that data into their onboarding processes.
By integrating a customer’s bank data into their onboarding processes, companies can reduce the time taken to onboarding new customers from weeks or days to just a few minutes.
Our new whitepaper details how the provision of accurate and verified customer information during onboarding makes a wide range of other services easier to access, from payments to wealth management, loans, mortgages and more.
At Plaid, we have developed an onboarding solution that uses open API calls to respond to the customer requirement for faster, easier and more secure onboarding.
By integrating bank-level identity verification and security into onboarding processes enabled by Open Banking, organisations will not only remove friction and enable faster service delivery and transfers of value, but unlock whole new possibilities for product and service development.
Download a copy of Plaid’s new white paper to find out how full-stack onboarding can help FinTechs, banks and WealthTechs deliver smoother, easier user experiences across the board.
[1] Signicat, 30 March 2022: “The Battle to Onboard”
