In today’s hyper-competitive business landscape, the banking industry is witnessing a transformation in how customers are onboarded. Banks and financial institutions (FIs) strive to optimise their customer onboarding processes with Artificial Intelligence (AI). This is because customer onboarding is more than just a routine process. Instead, it is the first touchpoint between customers and banks or FIs when introducing financial products to customers. This means that it is a pivotal moment that can determine the success or failure of a customer relationship. According to PWC, 73% of users consider customer experience a determining factor in their decisions. Thus, effective onboarding is crucial as it can establish a positive first impression and significantly enhance customer satisfaction and loyalty.
Traditionally, customer onboarding has been a labor-intensive process involving paperwork, face-to-face meetings, and repetitive data entry. However, the emergence of AI has brought about a transformative wave in how this critical process is conducted. 77% of bankers assert that effectively leveraging AI will differentiate winning banks from losing ones. Furthermore, Business Insider Intelligence found that 75% of respondents, primarily banks with assets exceeding US$100 billion, actively utilise AI. Therefore, this article will explore the profound significance of AI in seamless customer onboarding within the banking industry.
What is customer onboarding and AI
Before we proceed, what is customer onboarding in the banking context? Customer onboarding is the process by which banks or FIs welcome and integrate new customers into their systems and services. Specifically, it involves collecting information from customers, verifying their identity through electronic Know Your Customer (eKYC), and establishing necessary accounts. In other words, it is the initial interaction between banks or FIs and clients, involving data collection, account creation, and relationship building. The process aims to establish a positive experience for customers while meeting regulatory requirements and minimising risks for banks and FIs.
AI, in the context of customer onboarding, refers to the application of AI technologies to automate, streamline and enhance various aspects of the onboarding process. These technologies include Optical Character Recognition (OCR), chatbot and more. AI-driven solutions have the capacity to revolutionise customer onboarding by reducing manual tasks, increasing efficiency, and providing 24/7 accessibility.
Why is AI important In enhancing the customer onboarding process?
Streamlined onboarding processes
One of the benefits of implementing AI in customer onboarding is the ability to streamline and automate various aspects of the process. Traditional onboarding procedures often involve a significant amount of paperwork, manual data entry, and repetitive tasks. AI technologies can eliminate much of this manual effort by automating data collection, verification, and document processing. By streamlining onboarding processes, banks and FIs can even handle higher volume of onboarding requests within the same timeframe. Therefore, the implementation of AI in the customer onboarding process can enhance efficiency, ultimately resulting in greater user experience.
AI-driven onboarding solutions offer the advantage of being available 24/7, breaking free from the constraints of traditional business hours. Customers can initiate their onboarding journey at their convenience, whether it’s during the day, late at night, or on weekends. This flexibility aligns with the modern customer’s expectations for instant access to financial services and information. A survey revealed that 53% of respondents are frustrated by long response times when interacting with businesses. Consequently, it is crucial for banks and FIs to allow their customers to initiate their onboarding journey anytime and anywhere. By doing so, banks and FIs can effectively enhance customer experience and satisfaction.
Time and Cost Saving
With streamlined and automated onboarding processes, it reduces the time and cost it takes to onboard a new customer. To be more specific, it reduces costs associated with manual labour, paperwork, and lengthy onboarding procedures. At the same time, it also decreases the time required for data collection, verification, and document processing. Thus, banks and FIs can serve more customers with fewer resources, ultimately leading to significant time and cost savings.
Improved human resources allocation
Furthermore, AI can help banks and FIs better allocate their human resources. Employees who were previously engaged in manual data entry and administrative tasks can be reassigned to more value-added roles. For instance, banks and FIs can reallocate their employees to relationship management or address complex customer needs. This not only improves overall employee satisfaction but also ensures that employees can focus on tasks that require human expertise.
What and How AI technologies can create a seamless onboarding process
Optical Character Recognition (OCR)
Firstly, OCR is one of the AI technologies that banks and FIs should implement for seamless customer onboarding journeys. It enables the conversion of various types of documents, such as identification cards, passports, and other documents into machine-readable text. Moreover, OCR can also convert scanned or photographed images into text. Particularly, OCR can accurately extract essential information from documents, such as names, addresses, and identification numbers. This means that it can eliminate the need for manual data entry, reduce errors, and speed up the verification process. By implementing OCR to simplify and speed up customer onboarding processes, it helps banks and FIs save cost and time. With AI technologies like OCR, banks and FIs can establish a seamless onboarding process for their customers.
Chatbots are AI-powered virtual assistants that can engage with customers in natural language, addressing inquiries and assisting with the onboarding process. Chatbots are available 24/7, ensuring that customers receive instant responses to their questions and guidance throughout the onboarding process. This means that customers no longer need to wait for a human agent to be available to answer their queries or guide them through the onboarding process. Interestingly, 62% of them prefer to engage with a chatbot instead of waiting for 15 minutes or more to speak with a human representative. In addition, chatbots can achieve a potential 30% reduction in customer service costs by handling up to 80% of routine inquiries. This instant assistance enhances customer satisfaction and reduces the risk of customers abandoning the process due to frustration or uncertainty.
In conclusion, the integration of AI technologies in customer onboarding offers a myriad of benefits to banks and FIs. It streamlines processes, enhances accessibility with 24/7 availability, saves time and cost, and optimises the allocation of human resources. OCR and chatbots are some examples of how AI is revolutionising the way customers onboard with banks and FIs. However, to truly leverage the power of AI in customer onboarding, it is crucial to choose a trusted and reliable platform. This is where JurisTech’s AI-driven customer onboarding platform can make all the difference. With its advanced AI technologies, including OCR and chatbot functionalities, JurisTech’s platform is able to provide a seamless onboarding experience. You not only enhance efficiency and customer satisfaction but also ensure that your business stands to become a leader in this technological revolution. Embracing AI in customer onboarding is not merely an option; it is a strategic imperative.
JurisTech (Juris Technologies) is a leading Malaysian-based fintech company, specialising in enterprise-class software solutions for banks, financial institutions, and telecommunications companies in Malaysia, Southeast Asia, and beyond.