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Establish A Secure Customer Onboarding Experience

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With new techniques of fraud rising in cyberspace, businesses need to be more cautious with whom they are dealing with. Hackers can fake the identity of others and scam businesses causing a loss of a huge amount of money in the financial aspect. Not only this but reputational damage is also created through which the interest level of other business dealings is also affected badly. This has caused the dire need for establishing the online Know Your Customer procedure to perform identity verification on clients and eliminate any potential risks associated with them before any action is preceded, protecting the firms while providing a better and secure customer onboarding in the long run.

Customer’s Experience vs Customer’s Decisions

 

The primary goal for any business to flourish is to maintain a satisfactory relationship with the customers by providing them with the best possible experience. This will lead them to attract more customers and generate better profitable revenues. Therefore, a customer’s experience is of significant importance as their decisions are revolving around it. If they had a bad experience of personal information getting scammed and used for illegal purposes leading them into false accusations of theft, they will probably move towards another company that could provide them a safe environment to carry out successful transactions. How the customers are treated is one of the essential tools that set the tone for future relationships with them during customer onboarding. 

The Vulnerability of the Financial Sector

 

Identity thefts, fraud, and illicit criminalities are conducted at an increasing rate in the financial sector as compared to other industries. Opening an account and conducting online transactions activities can cause vulnerability to the information of clients through which data breaches are executed by criminals. Therefore, a know your customer checklist is required before onboarding customers so that any immoral action can be eradicated. In addition to this, sectors like gaming and travel also require identity verification to monitor the legal age rule and comply with the know your customer (KYC) regulations. 

Customer Due Diligence vs Enhanced Due Diligence: What’s the Difference?

 

Whenever the term KYC is used, the terms of Customer due diligence and Enhanced due diligence are interlinked with it. Both of them are equally required in order to ensure a secure customer onboarding process. Not only this, it helps the firms to protect themselves from penalties against AML or anti-money laundering regulators. 

 

Customer Due Diligence – An Effective Background Checker 

The process of customer due diligence (shorten as CDD) consists of checking the background information of the client and constantly monitoring the activities to prevent any suspicious actions. This is particularly required during the initial process of account opening in banks. Different validations such as a document or biometric verifications are conducted to perform this process successfully. 

 

Enhanced Due Diligence – An Advance Identifier to Check High-Risk Individuals

EDD is also known as enhanced due diligence in which an advanced and more detailed version of customer verification is executed. The level of risk a client can possess is calculated upon which they are categorized under CDD or EDD. The know your customer requirements for EDD refers to carrying out verification process on individuals who poss a high risk such as politically exposed persons (PEPs), chairpersons, chief of staff, etc. The process lookout for a detailed insight into their business relationships which might contradict AML. 

Ensuring Better Security Concerns with Know Your Customer Regulations

 

To effectively execute a secure customer onboarding, the following features are needed that should be provided:

  • Convenient Sign Up Process: Whether opening an account or registering on a website, a complex sign-up process can decrease the level of interest of customers. Therefore, an easy go-to process such as biometrics should be designed for a hassle-free customer experience.
  • Time-Saving: As customers want to spend minimal time in today’s era, this factor can prove to be very beneficial for businesses. Long procedures of waiting for identity verification should be diminished by businesses by adapting to new methods of identity verification checks which require minimum time. 
  • Serving Customers at the Right Time: At what stage, the firm verifies an identity is an important part as customers don’t want themselves to be disturbed every single time. So rightfully executing the system can make a huge impact on the customer’s decisions during the customer onboarding process. 

 

Wrapping it Up

 

The dynamics of customer onboarding are changing with time, as businesses want to establish trustful relationships with their customers. For this purpose, clients need to be verified properly to exhibit any financial and reputational risks while implementing a secure customer onboarding experience. It revolves around the fact, that if the company is able to attract more and more customers for onboarding with satisfactory remarks, the better the revenues would be generated, and secondly, a better brand image will be promoted in the global market. Hence, the KYC checklist is critical for secure customer onboarding. EDD is also known as enhanced due diligence in which an advanced and more detailed version of customer verification is executed.

 

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