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20 Jun 2024in Use cases

The Challenges in Verifying and Onboarding Customers & How to Tackle Them

Henry Patishman

Executive VP, Identity Verification solutions at Regula

Identity verification has become a crucial aspect of a customer onboarding process, often making or breaking the customer journey. Inadequate implementation hinders the onboarding experience for both clients and businesses, as the various challenges are often tied to either UX or fraud prevention. 

In this post, you’ll learn about the most critical issues associated with verifying and onboarding customers, customer onboarding best practices, and solutions that can save the day.

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Customer onboarding challenge #1: Too many forms to fill out

Customers can quickly become frustrated when faced with numerous forms during onboarding, especially if they have to fill them out manually. This frustration can lead to a drop in conversion rates as potential users abandon the process. However, certain industries have compliance requirements, making the collection of specific data as well as identity verification for digital onboarding mandatory.

Optimizing the customer onboarding process involves reducing the number of steps while adhering to regulatory requirements. This balance creates a more user-friendly experience, boosting customer satisfaction and conversion rates.

Solution

Implementing data entry automation can simplify the onboarding process, allowing businesses to collect necessary data without compromising UX. These tools can be tailored for both online and on-site scenarios:

In-person customer onboarding strategy: Use hardware devices like passport readers. The operator scans the document, and OCR technology automatically enters the relevant data into the system. This eliminates the need for manual form filling, leaving customers only to put their signature on the page.

Additionally, passport readers perform authenticity checks. It takes mere seconds but provides extra security against fraud.

Digital customer onboarding strategy: Implement specialized SDKs that can enhance your app with identity document reading capabilities. These solutions use OCR technology to automate data extraction and entry from a submitted identity document while incorporating essential authenticity checks, which are critical for remote scenarios.

These solutions also streamline the entire customer onboarding process and provide reliable verification by minimizing manual input. For example, Regula Document Reader SDK identifies the document type, eliminating the “Choose your country” and “Choose your document type” steps. It reads the data and fills in the fields while also performing authenticity checks in the background.

Customer onboarding challenge #2: It takes too long

Lengthy approval and analysis times for submitted forms can deter clients from completing the onboarding process. As a result, businesses may lose potential customers who don’t want to wait for a long time.

Even before the spread of 5G Internet, web users were 32% more likely to leave a page if it took over three seconds to load. Fast-forward a few years, and customers are even less patient. 

There are two reasons that can cause impatience in the case of onboarding:

  1. Manual review. When documents are sent for manual review by a human employee, it often results in delays.

  2. Slow systems. An automated system might be in place but operates slowly. Poor UX design can worsen the issue, leaving users uncertain whether to wait longer or restart the process.

By addressing these concerns and streamlining the customer onboarding process, businesses can improve user satisfaction and enhance customer retention.

Solution

By delegating basic highly repetitive tasks to technologies, you eliminate humans from the loop and streamline the whole process. As a result, customers are more engaged and less likely to abandon the onboarding process.

To automate identity verification for digital onboarding, you can use Regula's comprehensive solution. Regula Document Reader SDK, which includes a database of over 14,000 document templates, effectively captures all meaningful information and conducts massive cross-checks to ensure all the data, as well as the document itself, is valid. This process takes seconds and allows genuine clients to access services almost instantly.

Customer onboarding challenge #3: It requires too much effort

Traditional ID verification methods often require customers to visit a physical location and complete various tasks, while digital onboarding may involve resubmitting documents due to incorrect formats, sizes, or poor image quality. In both cases, clients may be asked to provide extra documents, such as bills and bank statements, which can be a significant inconvenience.

Solution

Use modern tools that provide an intuitive user experience, making the digital customer onboarding process as simple as taking a selfie. For example, when an app integrates Regula Document Reader SDK, customers only need to present their documents, and the app will do the rest. It automatically assesses the image quality, improves it if necessary (e.g., deskewing a document shot at an angle or removing glare), extracts the required data, and verifies it.

When combined with Regula Face SDK, the system then also conducts a liveness check and compares the selfie with the photo(s) on the document(s) to confirm the person’s identity. This seamless process reduces the false-positive rate without creating additional obstacles for clients.

Customer onboarding challenge #4: Limited onboarding options

Some companies limit onboarding to either online or specific platforms, such as web or mobile. However, customers prefer to onboard through their most convenient channels, not just the ones a company offers. With nearly 15 billion mobile devices in operation worldwide in 2021, projected to reach 18.22 billion by 2025, not offering diverse onboarding options can alienate potential clients and reduce market share.

Solution

Businesses must ensure that their digital customer onboarding process is accessible across various channels, both online and offline. However, an attempt to level up the workflows on all fronts may result in too many moving parts that are hard to implement and maintain. That’s why having a single provider that covers all possible touchpoints in the verification process is beneficial. 

Regula is an example of such a one-stop shop which provides document reader devices, web and mobile SDKs, and even the ability to integrate with third-party devices. This flexibility allows businesses to create a seamless and user-friendly onboarding experience across multiple platforms, catering to diverse client needs.

Customer onboarding challenge #5: Fraud detection issues

Both traditional and digital onboarding processes are vulnerable to document forgery and scams. A global survey by Regula revealed that 26% of banking organizations experienced over 100 identity fraud incidents in the past year. 17% of FinTech companies faced the same issue.

Scammers are also becoming increasingly sophisticated, using technologies like AI voice cloning and face morphing to authorize fraudulent transfers.

Solution

Businesses need advanced customer ID verification tools to combat forgery, sophisticated scams, and deepfakes. For reliable authentication, it’s essential not to rely on a single test but to conduct multiple tests.

This is especially important as many customers are onboarded remotely using mobile devices. For example, cross-checking information from the visual inspection zone, machine-readable zone, barcodes, and chips in identity documents is crucial. 

Another essential aspect of secure remote onboarding is the "zero trust to mobile" approach, which involves re-verifying the RFID chip on a server in a secured perimeter. This ensures the physical ID information is trustworthy, and the chip has not been cloned or its data manipulated.

Using biometric verification, such as face biometrics, is also vital. Performing liveness checks and comparing submitted photos with those in documents or databases significantly enhances security and provides a more efficient customer ID verification process.

Certain types of fraud, such as face morphing, are still challenging to detect directly with high confidence. Forensic methods are used to find traces of alterations in documents. For physical locations where security is a top priority, devices like Regula's passport readers are essential. These tools help businesses identify and combat fraud more effectively by conducting various checks and cross-validations.

By incorporating these robust measures, businesses can confidently verify the identities of their remote customers, overcoming most fraud detection challenges and ensuring a high level of security and a seamless onboarding experience.

Customer onboarding challenge #6: The data is not secure enough

Security is a major concern during the identity verification process, especially in digital customer onboarding. Hackers may attempt to steal data during form completion, and scammers may create phishing websites to trick new customers.

Solution

It is crucial to ensure that your customer ID verification solution does not collect or store clients' personal data in order to maintain privacy and trust. 

It's also important to consider a solution that can operate on-premises, as this allows all processes to occur within your secure perimeter, minimizing potential risks. While an on-premises solution may not provide 100% protection from phishing attacks, it significantly enhances data security, reducing the likelihood of breaches and unauthorized access to sensitive information.

Regula's solutions are designed with these concerns in mind, offering both data privacy and on-premises capabilities to ensure a secure and reliable onboarding experience for your clients. With the recent update of Regula Document Reader SDK, the software solution for thorough ID verification, Regula focuses on comprehensive cross-checks of all document data from all sources.

Bottom line

Unpleasant onboarding processes can deter clients from using a business's services, resulting in wasted customer acquisition costs, which, for example, can range from $200 to $1,000 for credit cards. 

By adopting customer onboarding best practices and leveraging technology partners like Regula, businesses can reduce their financial burden as well as build trust and confidence with customers. Regula Document Reader SDK and Regula Face SDK streamline the onboarding process, making it seamless, secure, and effective. We’ve already helped dozens of international organizations streamline their digital customer onboarding, so don’t hesitate to reach out if you have any questions.

Identity Verification for Digital Customer Onboarding

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