digital transformation

How Digital Onboarding Creates A New Breed Of GCC-Based Banking Leaders

As customer expectations rise –fuelled by the ever-improving user experience of digital services– their patience falls, meaning banks are constantly having to race to keep up.
How Digital Onboarding Creates A New Breed Of GCC-Based Banking Leaders
Image credit: Shutterstock.com
Founder and CEO of Aion Digital
6 min read
Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

Don’t be distracted by stories of rising abandonment rates in online customer applications. Digital onboarding isn’t just a passing phase, in fact several GCC banks are already setting new benchmarks with digital account opening- Absher platform in Saudi Arabia and end-to-end digital onboarding in Bahrain have changed the game. In one instance, a GCC bank has reported more customer acquisition through its digital platform this year than from all its branches combined. 

As customer expectations rise –fuelled by the ever-improving user experience of digital services– their patience falls, meaning banks are constantly having to race to keep up. Banks wishing to forge ahead in the race for new customers must embrace digital onboarding now. Here’s why.

1. Digital onboarding is easier for customers
Digital onboarding involves signing up online or via a mobile for a bank’s services. Easy enrollment and login are the most important criteria for most GCC customers when choosing a digital bank. Customers now expect opening a bank account to be as user-friendly as their experiences with shopping with Amazon. It’s a startling observation, then, that up to 40% of customers fail to make it all the way through to onboarding completion, dropping off at various stages of the process. Not a great first impression of your new bank. 

The digital generation is impatient with any transaction that takes more than a few minutes. These users represent the GCC banking customers of the future– and they want speed, ease-of-use and a good result. They’re also less loyal. To hold on to customers you need to ensure you differentiate your digital solutions and offer a better experience than your competitors.

Use technology that takes care of your customer
Advanced identity solution capture all the required information via the customer’s digital device. Customers can submit photos and scans of documents, speak to bank staff via video calls and have their identity authenticated and their credentials checked digitally. Data integration and transaction engine work behind the scene to bring ‘aha’ features, such as save and resume, capture user input just once across all products, pre-fill forms, digital signatures, attachment management and channel cross-over. It’s like your Netflix or Spotify experience now in banking.

But also not all technologies are the same. And central banks in GCC are very apprehensive of me-too apps. Hence, banks need to be extra judicious when assessing the underlying technology, algortihms and audit trails. The right investment here will have a direct impact on the bottom line of banks. The speed and ease of digital onboarding means more customers can be signed up in a shorter space of time, at much lower cost, and increasing onboarding rates. A GCC bank reported 70% drop in its customer acquisition cost using the right digital onboarding technology.

Related: Roadblocks To Innovation: UAE Small Businesses Sound Off On Working With Banks

2. Digital onboarding is more secure
In 2017, criminals were found to be behind 159 of every 10,000 current account applications in the UK, up by 13% on the previous year. GCC traditional banks are not immune to these problems. As criminals are becoming ever more sophisticated in their efforts to defraud banks and their customers, traditional onboarding methods are looking increasingly cumbersome and leaky.

Better security will protect your brand
Digital KYC technology has evolved to the point where a customer’s face and fingerprint are their password. Facial recognition and biometrics can enable KYC checks to be carried out in seconds and with a much higher degree of security. The customer takes a selfie, performing both passive and active liveness checks (e.g. nodding their head to show they’re not spoofing) and snaps an ID document such as a passport or driving licence. This data is then checked against a biometric watchlist of known fraudsters and repeat applicants.

In real time, the system then validates the KYC and AML checks and runs the application through the bank’s rules and workflows to deliver a swift decision. Our client bank in GCC has successfully reduced its fraud instances using digital onboarding solution which helped save money for the bank and built credibility with the regulator. Indeed a game changer compared to current practices!

Related: Five Key Aspects SMEs Should Consider For Their Digital Strategy In The Middle East

3. Digital onboarding directly impacts your profitability
Each bank will know what its customer acquisition costs are, but a scan of various estimates suggests they can range anywhere between US$200-400. That includes a number of factors, such as marketing spend, branch cost and management time. With pressure on the bottom line, the board and shareholders are demanding better cost management from their banks.

Hold your teams accountable
We have seen more success at banks where digital transformation is led by business teams. For a smaller GCC bank, the primary motive of digital onboarding was to capture market share quicker than incumbents. They achieved this with an easy onboarding solution and a low-cost, highly targeted digital engagement campaign. Results are stunning. It delivered strong increase in new-to-bank customers and also a much higher cross sell ratio than their historical average.

In almost every instance, GCC banks deploying holistic digital onboarding solution have seen their customer acquisition cost drop by 30%-70%. For a particular bank, it was also able to increase its market access by 30 times and break away from a crowded niche play. This case is specially relevant to mid market banks operating in smaller GCC markets.

A new breed of leaders in the making
There's no sign that customers are about to abandon their digital devices, and as long as that’s the case digital onboarding solutions will remain the gateway to modern banking. Banks that have taken a small, early start are actually realizing tangible returns on their digital investment. 

But not all onboarding technology are the same. And digital banking is certainly not equal to having a mobile app that most banks already have. Hence connecting the (business, regulatory, marketing, legal and technology) dots is your secret sauce to acquire the most profitable customers of the future. According to Bloomsberg, there are currently 70 GCC banks competing for the accounts of the region’s 50 million people. In a crowded market, digital innovation has to be discreet and market leadership is the reward for those who get it right. 

Related: Bridging The Digital Divide

More from Entrepreneur

Amina AlTai teaches entrepreneurs and intrapreneurs how to balance a thriving career, body and mind.
Jumpstart Your Business. Entrepreneur Insider is your all-access pass to the skills, experts, and network you need to get your business off the ground—or take it to the next level.
Create your business plan in half the time with twice the impact using Entrepreneur's BIZ PLANNING PLUS powered by LivePlan. Try risk free for 60 days.

Latest on Entrepreneur