eKYC is a digital or electronic strategy for financial organizations to authenticate their consumers’ identities. The finance industry is super competitive. As such, obtaining new credit card clients is never simple. The process of effective consumer onboarding is frequently even more difficult. Many documents pertaining to the firm’s certifications and financial data require verification. To fulfill sophisticated regulatory standards, the KYC onboarding procedure is necessary.
The data needed for KYC online verification onboarding compliance of a new credit card registration can be complicated. This frequently results in engagement between sales staff and customers. Obtaining the necessary documents to fulfill the KYC onboarding process, frequently results in unforeseen delays. This results in a negative consumer experience and a profitability loss for the business. Another critical factor is the lack of digital automated processes in the KYC onboarding system. As a result, the onboarding cycle time increases. Delays have a hurtful impact on the client experience. As a result, the credit company suffers a drop in revenue. This is due to the fact that consumers cannot be billed until they begin using their cards.
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Problems During Customer Onboarding Process for Credit Cards
An article by FintechFutures illustrates the Forrester Consulting research study. It forecasts that customers will be notified 10 times on average during the KYC onboarding program. Customers are required to present between five and one hundred files. Furthermore, it can cost up to $25K per customer, with an estimated price of $6K per new customer. Below are the ongoing system’s challenges:
Lack of Structure
KYC onboarding must adhere to specific procedures. This can happen throughout departments like credit, legal, and operations. The difficult part is that each compliance department may understand regulations differently. As a result, they wind up with their own procedure that is unique to their department/entity inside the bank. This also implies that they’ll have three separate viewpoints of regulations/processes. Furthermore, consumers are likely to be perplexed as to why they must present the same data at multiple points throughout the process. In nature, this data can be reproduced for multiple parties.
Amends in KYC Regulations
KYC rules and restrictions are evolving on a month-to-month premise in today’s world. As a result, banks must make adjustments to their systems accordingly. They require an opportunity to speak to the customer about why the new changes are occurring. They must also make certain that the modifications are incorporated into the KYC digital onboarding program.
Financial firms always maintain close relationships with their customers. There still is a lack of funding for potential opportunities (like KYC onboarding). This is in addition to the desire to comprehend changing clients’ needs and market complexities.
With present tech, banks are under growing demands of doing everything in real-time. A consumer, for instance, wants everything to be accessible on mobile devices. This allows them to not visit the bank by navigating the app from every location at any time. Older systems are still in use in modern banks. As a result, providing consumers with an edge-to-edge digital experience becomes difficult. Companies can easily break this down with breakthroughs such as robotic process automation (RPA).
eKYC Onboarding for Card Application Process
The first part of building a relationship with a new consumer is to make the application process as simple, smooth, and fast as possible. The lesser fields there are to fill out, the quicker the application. Applicants, for instance, can use their phone’s camera to insert demographic details. This can be utilized for face authentication. Some financial institutions have reduced finalization time by one-third. They have also increased success rates by nearly a quarter. Furthermore, streamlining the application procedure results in a 40% rise in digital applications.
The second phase is to engage new customers so that they utilize their card early and frequently so that it turns into a routine. In India, for example, the most credit card needs owners to spend a certain amount within the first three months in order to be eligible for rewards. According to a McKinsey study, the long-term worth of a customer is up to three times higher when they are involved quite often in the first three months. Moreover, many financial institutions only commit about a fifth of their promotional cost to this crucial phase.
The Up And Coming eKYC technology
It provides a one-of-a-kind e-KYC solution platform. It is a facility that allows for the soft onboarding of new credit card registrations. It also provides businesses the benefit of risk analysis and fraud prevention.
- Smooth Application approval: Whenever a credit card application is accepted, it must be authorized by several officers. It is thoroughly reviewed before the application is routed to the rear end for evaluation.
- Credit checks: A distinct set of APIs conducts extensive credit analysis on the applicant. This is done to determine validity, previous default information, and so on. If the candidate is approved, this could result in potential credit risks.
- Background checks: performs thorough background inquiries on credit card applicants This may involve checking the candidate against several AML/CFT databases, running critical inspections against authorized court cases, and so on.
- PAN verification with video: The VideoKYC approach provides real-time PAN validation. This helps to validate the file’s authenticity. It also runs credit analysis against the PAN number.
No photocopies: Simply present the actual ID proof with VideoKYC, and the executive on-call can take a screenshot as an aspect of the KYC proof.