SECURITY

Customer onboarding is key at the moment. There is something of a perfect storm with new Anti-Money Laundering directives and new Know Your Customer regulations coming in. At the same time, there is an increase in identity fraud and data breaches. Moreover, all of this combines with the global drive towards a greater digitisation of financial services.

It is a sobering stat: $26bn of fines last year were levied on global financial services firms for AML and KYC failures.

But on the other hand, the digital customer on-boarding journey needs to be smooth and quick. Asking customers to go through a lengthy KYC process or mail, email, bringing a copy of their ID documentation to a branch is will arguably cut down on the risk of a regulatory penalty.

But it is also a grossly outdated customer journey.

The end result might conceivably find favour with the bank’s legal department. Such relief within the organisation will be short-lived as it will also mean application abandonment and increased cost of customer acquisition.

For example, in the UK, there are well known established banking brands suffering up to one-half of all account applications being abandoned because of inadequate data sources and cumbersome manual ID validation processes.

The aim is therefore customer onboarding with a great customer experience combined with minimised account opening abandonment and optimised fraud prevention.

The digital challenger banks have tended to enjoy a strong reputation for getting this right. And then the UK’s Metro Bank became the first high street lender to launch current account via a selfie and one piece of photographic ID.

But there was heightened interest when the first of the major incumbents kicked off remote current account opening, avoiding the need to visit the branch.

Step forward RBS NatWest and fintech HooYu. The brief was simple to define, harder to pull off. The bank needed to transform customer on-boarding by improving the conversion rates and meet ever growing expectations of customers. In short, it needed a modern, digital tool to allow customers to provide identity documentation online.

A significant number of NatWest customers failed initial KYC database checks to confirm customer name, address and date of birth. The status quo process was that customers that fail the database check subsequently receive an email after the initial application asking them to upload ID documents in a subsequent process or come into branch with identification. At this point, the majority of new customer account applications stall and drop-off, resulting in customer abandonment and potential customers instead signing up with competitors.

With HooYu, NatWest created an experience where customers can prove their identity digitally and in real-time as part of the digital application process by automatically directing them to the HooYu experience.

NatWest transformed the customer journey to allow customers to go through ID & verification seamlessly and in real-time. The HooYu UI is customer facing inside the NatWest site and customers are asked to take a selfie and to take a photo of their ID document and their utility bill.

The customer-facing technology from HooYu uses UI & UX tools to guide the customer through the process. For example, the HooYu UI automatically renders in whichever language the customer uses on their device, the customer receives helpful feedback and tips as they go through the process and the customer can pause the KYC stage of their application if they don’t have all the necessary documentation to hand.

The customer also receives SMS reminders from HooYu to come back and complete their KYC, driving customers back to the HooYu-NatWest UI.

In a matter of minutes, HooYu geo-locates the customer, authenticates their ID document, performs facial biometrics between the selfie and the ID document and checks the utility bill for recency and a matching name and address.

HooYu then cross-references and analyses the customer name, address and date of birth from multiple sources to build a customer identity confidence score. This new process has made it quicker for customers to complete account opening whilst increasing the level of customer due diligence.

As for the end result, Frans Woelders, Chief Digital Officer at NatWest is more than happy: “We know customers want to be able to open accounts at a time and a place that suits them and not have to worry about precious ID documents going missing in the post, or taking time out of their day to go to a branch.

“That’s why we’re making it easier, safer and faster to open and access accounts, allowing customers to get on with the things that matter.”

And the partnership also comes with a killer stat, stressing a winning ROI for the partnership, namely a 33% increase in conversions and reduction of completion time.