Remote Onboarding
Remote Onboarding
Remote Onboarding
ONBOARDING
How Banks are Changing
the Game
According to a recent J.D. Power study, nearly one-third (31%) of new account openings are executed
through a bank website or mobile app, up from 22% in 2019 — that’s a 50% increase in just one year.
Meanwhile, the number of new account openings at branches has declined year over year by 10
percentage points, and now comprises just 55% of all new account openings.
2019 2020
5% 5%
8% 9% In person at a branch
6% Online
22% 65%
12%
31% 55%
Mobile app
Phone
16% Total Digital Total Digital
Mail
19%
No turning back
3
In Asia-Pacific, branches are declining in both emerging and mature markets, from Malaysia and
Thailand to Hong Kong and Korea. These actions have been in response to cost-cutting pressures and
customers’ shift to digital channels for routine transactions, such as bill payments or person to person
(P2P) transfers.
As a result, branch density — the average number of bank branches per 100,000 adults — has declined
in many countries. According to Deloitte Insights, branch density in Switzerland reduced from 54
branches to 42.5 between 2008 and 2016. In Norway, which ranks in the world’s top 10 countries with
the highest internet penetration, branch density dropped from 11.7 branches in 2008 to 6.2 in 2016.
India
40
Japan
30
Netherlands
Norway
20
Singapore
10
Switzerland
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 United States
4
KEY QUESTIONS
to Address During the Onboarding Process
Any new account onboarding process must answer these five fundamental
questions:
5
3. Is the customer creditworthy?
6
In-Branch vs.
Online Onboarding
In-Branch Online
OP T IM IZ AT ION ZON E
The customer journey starts with the ID and proof of issued ID, proof of
opening of the new account and as you address address and selfie
will see, there is considerable room for
improvement. Visual inspection of AI and machine
the person’s ID and learning verify ID
Banks around the globe typically proof of address document, face
perform a common set of steps when matching and liveness
they onboard a new customer though
the process differs depending on Ping credit bureau, Ping credit bureau,
whether it occurs at a physical branch sanctions lists and sanctions lists and
or online. While a bank is required to third parties third parties
perform the necessary due diligence as
part of their Know Your Customer (KYC) Bank generates Bank generates
and Customer Identification Program confidence scores confidence scores
obligations, there’s still considerable (e.g., likelihood of (e.g., likelihood of
opportunity for improvement in process default) default)
efficiency. The Optimization Zone of the
onboarding process includes the steps Bank determines Bank determines
that can be automated, streamlined whether to open new whether to open new
and simplified to deliver a better account and type of account and type of
customer experience. account account
7
While the overall customer journey between the in-branch
and online experience shares many similarities, there are
some fundamental differences between the two experiences.
There’s also an opportunity for banks to replicate some of the
more efficient processes often used in remote onboarding and
repurpose them within a branch setting. Since many branch
offices have iPads or tablets at the teller stations, banks can
leverage those devices to trigger online identity verification
solutions that can check the authenticity of ID documents,
perform address validation, ping government watchlists and
exclusion lists, and even query credit bureaus in real-time.
8
What’s Wrong with the
in-branch
onboarding
process?
Let’s explore some of the shortcomings of the current in-branch
new account process:
Convenience
“Account opening is the
first moment of truth.
Finding time in our hectic schedules to visit a branch office,
which is usually only open between 9 a.m. to 5 p.m., is a major Consumers
inconvenience that is only being exacerbated by the pandemic,
which has led to branch closures or limited hours of operation.
want validation
that they’ve
made a good
Time
decision.”
There are large swaths of the population that expect an Uber-
like experience when it comes to creating a new account. Paul McAdam, J.D. Power
Unfortunately, the process for opening an account in-person
often takes 30 minutes to an hour or more. Plus, you may have
to wait a while in the branch unless you book an appointment in
advance.
9
Tellers are not fraud experts
Bank tellers don’t typically make great money but they do have access to the funds in your
account and other valuable information, which can result in criminal behavior. Rich and elderly
bank customers are particularly at risk, prosecutors say, when tellers and other retail-branch
employees tap into accounts to wire funds without authorization, make fake debit cards to
withdraw money from ATMs and sell off personal information to other criminals. According
to The New York Times, accounts with high balances and those with direct deposits of
government funds, like Social Security payments, are especially coveted.
10
Disjointed experience
Poor communication
Banks often struggle to give consumers clear and concise instructions during the account opening
process, and seldom follow up with them to inquire whether they have questions or ask whether
they are satisfied with their accounts. Better communication starts by clearly specifying the types of
documentation required to open an account and making sure your customers know that before they visit
the branch.
Manual workarounds
For most banks, the onboarding process is riddled with manual workarounds and a lack of basic workflow
automation. While many banks will claim that client-centric onboarding is a goal, they also acknowledge
that customer experience is their top challenge. Banks often lay the blame with onerous KYC initiatives
and related processes that inject extra manual reviews into the new account process.
11
Designing a Better Onboarding Process:
Offline
and Online
An overwhelming majority of banks and credit unions still do
not enable a consumer to open a new deposit account end-
to-end without visiting a branch. In fact, only 29% of banks
and credit unions surveyed have enabled a completely digital
onboarding experience for their remote customers with
another 44% planning to digitally transform the experience
in the next 12 months (source: December 2018 Digital
Banking Report). Presumably, the COVID-19 pandemic has
expedited these plans since, in many cases, the in-branch
option has been severely restricted.
12
We’ve outlined the principles and
technologies that result in a better, faster,
more customer-centric onboarding
experience. When moving online, there are
a number of best practices to consider:
The more steps, the more screens, the more clicks that you require a new customer to go through, the
higher the abandonment rate. The entire onboarding experience needs to be wireframed from start to
finish to ensure the experience is fast, secure and intuitive.
13
Tether the digital identity to a
government-issued ID.
14
Repurpose the same biometric for identity proofing and
ongoing user authentication.
During the account onboarding process, banks will ask the new customer to take a picture of their
government-issued ID and a corroborating selfie. During the selfie-taking process, online solutions
are now embedding certified liveness detection to make sure that the online customer is physically
present and not using a picture of a picture or a deepfake video.
Better solutions will create a 3D face map of the user which contains over 100 times more liveness
data than a 2D photo. When a future user authentication is required (e.g., necessitated by a wire
transfer or password reset), the customer is simply asked to take a new selfie during which a fresh 3D
face map is created. This face map is then instantly compared to the original face map to unlock the
user’s digital identity in seconds.
It’s important to highlight that the same biometric captured during the verification process (e.g., 3D
face map) can now be used downstream as another form of authentication in-branch rather than the
typical chip and PIN requirements.
15
Emerging Threat
Vectors
As banks have increasingly moved online in response to the coronavirus pandemic, there has been a
parallel proliferation of cyberattacks that attempt to damage, disrupt or gain unauthorized access to
the computer systems of banks and other financial institutions. So while banks are looking for ways to
streamline the onboarding process, they must ensure that they build in the necessary safeguards to
thwart these types of attacks.
Here’s just a smattering of cyberthreats that banks must now contend with and how having a smart
account onboarding process can help:
New Account New account fraud isn’t new, Requiring a bank customer to capture a
Fraud but it’s fast becoming one of the picture of a government-issued ID and a
biggest problems in the digital corroborating selfie has a chilling effect on
banking era, costing the financial attempted fraud. The simple requirement
services industry billions each of a selfie can deter as much as 90% of
year. In fact, 48% of all fraud value fraudulent attempts since it requires the
stems from accounts that are less scammer to capture and share their own
than a day old, according to RSA likeness with the company they’re looking
Security. to defraud.
16
Average number of bank branches per 1000,000 adults
Threat Description How Smart Onboarding Can Help
Synthetic Fraud Fraudsters can also carefully Synthetic identity theft is one of the most
hoard a cache of stolen bank difficult types of fraud to detect. Filters
account data, credit and debit employed by financial institutions may not
card information, Social Security be sophisticated enough to catch it. Some
numbers and other details identity verification solution providers can
to impersonate legitimate offer a 1-to-many face search. At Jumio,
customers. Using these details, we have witnessed a number of synthetic
fraudsters can cobble together fraud attempts where the fraudster
realistic-looking identities to exchanged particular data points (e.g.,
perpetrate identity theft, new name, date of birth) but always uses the
account fraud and gain entry to same selfie or photo printed on the ID,
other platforms. which is an obvious red flag.
17
Average number of bank branches per 1000,000 adults
Threat Description How Smart Onboarding Can Help
Social Criminals are increasingly sharing Protecting online accounts and systems
Engineering resources and information and with a simple username and password
reinvesting their illicit profits into is a recipe for disaster and represents
the development of new, even a significant vulnerability. Banks need
more destructive capabilities. to move beyond password-based
In fact, over 82% of surveyed and knowledge-based authentication
financial institutions said paradigms to better defend against
cybercriminals have become social engineering exploits. Here again,
more sophisticated, leveraging creating a 3D face map of the customer
highly targeted social engineering at enrollment helps defend against
attacks and advanced TTPs for downstream account takeovers.
hiding malicious activity (Source:
VMware Carbon Black, May 2020).
Wire Fraud With most wire fraud scams, The quickest way to defend against wire
cybercriminals use spear phishing fraud is by requiring more than just a
emails designed to gather email username and password to initiate a wire
account details. Armed with transfer. By requiring the user to capture
account access, fraudsters wait a biometric such as a 3D face map, banks
patiently and obtain intimate can then check the face map against the
details about a transaction and face map captured during enrollment to
the participants involved. This ensure that the user requesting the wire
makes all other parties involved transfer is the actual account owner.
in the deal targets. Nearly 64%
of survey respondents reported
increased attempts of wire fraud
transfer, a 17% increase over 2019
(Source: VMware Carbon Black,
May 2020).
18
Shutting
the
Front Door
The best way to manage and address these emerging If a bank can protect the front
threats is by having a global perspective of the door (the new account), it’s a lot
threat landscape which most banks lack — especially easier to guard the house. Smarter
smaller, regional banks. Too often, banks do not have onboarding makes it materially
the internal expertise to stay abreast of emerging more difficult to get through the
threats or have the manpower to build in the necessary front door without a few, well-
safeguards. That’s why it makes increasing sense to placed hurdles. And it’s often
partner with global leaders in the fraud and digital these hurdles that will deter most
identity arenas to better defend against today’s and cybercriminals and cause them
tomorrow’s risks. to shift their focus to softer, more
vulnerable targets.
19
Closing Words
Despite all the talk about delivering a great customer experience,
most financial institutions stumble out of the starting gates in
the early stages of building a new banking relationship.
20
ABOUT
JUMIO
When identity matters, trust Jumio. Jumio’s mission
is to make the internet a safer place by protecting
the ecosystems of businesses through cutting-edge
online identity verification and authentication services
that quickly and accurately connect a person’s online
and real-world identities. Jumio’s automated identity
verification solutions fight fraud, maintain compliance
and onboard good customers faster.