3 Principles to Successfully Digitise Corporate Onboarding in Banking

Paper processes used to take days. Digital journeys usually take minutes. Mobile app processes should take seconds.   

Since mobile technology has entered everyday life, our standards for what constitutes a seamless business interaction has shifted sensibly. In financial services, the introduction of internet and mobile banking has revolutionised our habits for the provision of financial services.  

Yet, one area still remains incredibly paper-based or only partially digitised. While retail clients can now expect to have access to their active account in less than 2 days, average times for corporate client onboarding still remain between 26 and 32 days. 

Why? First, the amount of information needed to open a business account is considerably larger than when opening a personal account. Secondly, these documents and details often hail from multiple sources, as in the case of shareholders’ and directors’ personal details or approval needed from all authorised signatories.  

Aside from a few exceptions such as Neat and Qonto, challenger or digital-first players haven’t assumed the role of change catalyst in corporate and business banking the same way it has happened in the retail banking space. 

Yet, the current inertia may soon come to an end. In 2020, due to the closure of thousands of bank branches around the world during the global pandemic, previously untouched segments of the population turned to digital banking. In the UK, 12% of the nation’s population (6M) switched over to digital banking when lockdown measures were introduced in March and April.  

What customers now know is possible for retail onboarding, they will expect also in business banking: a fully digital, seamless and fast onboarding experience. 

However, successfully digitising corporate onboarding in banking is much more complex than moving a paper form to a pdf format.  

1. Rethinking the customer experience  

Digitising corporate onboarding represents a unique opportunity for financial institutions to rethink the customer experience from its very first touchpoint, building a great foundation the business relationship can grow on. 

According to Forrester, 66% of adults believe valuing their time is the most important thing a company can do to provide a good online customer experience. This is why, when sitting down to redesign the corporate onboarding journey, teams should analyse each touch point or request of their current onboarding process and ask themselves: is this really necessary? If so, is asking the customer for this information the only way to achieve our goal? 

By strategically thinking of all the steps involved in a more holistic way, teams can design smart workflows that limit the need for back-and-forth interactions with the customer. All required checks should either happen in real time – for example by instantly retrieving company incorporation documents from official registries through APIs and asking the customer to confirm the details included in them – or grouped in relevant “packages” that can be sent to the customer for review at once. 

Finally, concerns about prioritising good customer experience over cybersecurity may arise, but this is often a false dichotomy. Take document collection, for example. Emailing copies of personal or company documents still remain the primary form of document collection for corporate onboarding, despite the recurrence of data breaches and human errors involved in email communications. When done right, document collection via a dedicated mobile app or web portal is not only more secure, but also a lot more pleasant for the end user. Instead of needing access to a scanner or having to attach a pdf to an email, the customer can go through all the required steps within one seamless digital journey via their preferred device. Similarly, instead of asking one single point of contact to provide all shareholders’ and directors’ personal information, individual requests can be sent to each one of them, reducing the risk of impersonation.  

2. Harnessing technology to improve efficiency and accuracy  

At its core, technology is any kind of applied science or knowledge that makes life easier for us humans. The sheer amount of repetitive or manual tasks in traditional corporate onboarding makes it a perfect candidate for technological disruption.  

Machine Learning and Artificial Intelligence are fundamental in building a system that not only can collect information in digital form on a large scale but can also read and extract valuable details to progress the KYC investigation during client onboarding. For instance, identifying where the name, date of birth, nationality and address of shareholders is listed on a mandatory company document and how different shareholders relate to each other to form an Ultimate Beneficial Ownership chart are areas where ML and AI can sensibly improve efficiency. Optical Character Recognition (OCR), on the other hand, can be utilised to extract information from company documents or passports, to be automatically copied across internal onboarding systems.  

Arguably, the areas where technology has the biggest impact in corporate onboarding are the identification of relevant KYC/AML information; the transcription and reproduction of such information across internal systems; and the standardisation of data to scale operations. 

3. Keeping data alive for stronger compliance with regulations 

Introducing cutting-edge technology to simply move information from a piece of paper to an online form would be an incredible waste of time and resources. Luckily, thanks to the range and depth of RegTech solutions currently available, banks have the opportunity to build internal corporate onboarding systems that truly harness the power of data.  

For example, by introducing an on-going monitoring solution, compliance teams can be alerted in real time of any new AML hits, not only on the customers’ companies, but also on every shareholder or directors within the system. Similarly, automated audit trails ensure all KYC actions are recorded for every corporate customer throughout the whole onboarding process, while set remediation cycles help standardise internal compliance processes and ensure the data in the system is always up to date and trustworthy.  

In conclusion, the time for financial institutions to fully embrace technology to digitise their client onboarding process is now.  

To get started, a recent McKinsey report on digitising customer journeys suggests introducing purpose-built “labs” or “pods” with team members from different departments and insulate these from everyday business demands to focus on delivery.  

Bringing together UX designers (who can voice the needs of the customer), IT and security experts (who can focus on the technical requirements and feasibility of a new system) and compliance specialists (who are fully aware of compliance requirements) will ensure the end result is a truly customer-centric, secure, efficient and fully compliant corporate onboarding process.