Digital account opening: The future of customer onboarding?

The growing demand for digital services and the evolution of customers’ needs

Swiss banks are expected to undergo a strong digitalisation process. The introduction of digital innovations in the financial industry is in fact crucial in order to maintain competitiveness in a challenging environment characterised by a growing competition and the entry of new financial services providers. In 2020, the digitalisation trend has been significantly accelerated since banks had to quickly adapt their structures and processes in order to cope with new and unexpected scenarios.

Digitalisation allows to improve not only the banks’ efficiency but also the relationship with their clientele. Customers’ needs are evolving since many clients are now familiar with modern technologies and appreciate the opportunity to interact with banks remotely. Hence the need to implement more efficient and cheaper processes such as the digital account opening, a new onboarding process able to offer a significantly improved user experience.

The limitations of the current procedures and the benefits of a digital account opening

Customers are currently faced with complex and time-consuming account opening procedures. They are required to file and sign several documents and forms, which are often not easy to understand. Moreover, banks often struggle in managing data that are mainly reported on paper-based documents and repapering processes prove to be challenging since most of the times documents need to be redone from scratch.

Being simpler and cost-effective, the digital account opening process provides several advantages. For starters, it makes customers’ life much easier by reducing the number of paper-based documents and the overall contracts’ length. The required information is also provided electronically, so the transfer of the customers’ data is simultaneous and without need of manual intervention. A simpler and more efficient procedure also allows to significantly reduce the return rate through the back offices, thus preventing the need to submit additional queries to the customers. Direct meetings at the bank’s premises are no longer needed and the onboarding process is shortened. The result is a high-level customer experience that allows the bank to be perceived as an innovative and open-minded company. Being a paperless cloud-based system, the digital account opening process also simplifies the management of the customers’ information by reducing the number of hard copies that need to be stored, thus allowing to reduce the carbon footprint of the company and the overall costs of the procedure compared to the standard (paper-based) approach.

The difficulties in implementing safe and effective digital account opening processes

However, the implementation of digital account opening processes is proving to be difficult. The associated adjustments involve high costs and require a specific know-how, thus forcing banks to rely on specialised external organisations able to provide the expertise required to implement these new processes. Although some banks have already implemented digital account opening services, these processes still need to be further developed. In some cases, procedures are cumbersome and slow, particularly considering that customers need to wait until they receive the related physical documents and cards before being able to actually use the account.

Compliance is another critical aspect. Banks operate in a highly regulated environment. Therefore, within the context of the unavoidable digitalisation process, they need to ensure transparency and an adequate level of protection with regard to the management of their customers’ data. Finally, even the set-up of the regulation for the digital account opening proved to be a delicate matter. As a matter of fact, FINMA introduced a specific circular (2016/07 - «Video and online identification») in order to facilitate the adoption of new digital onboarding procedures. In 2018, a revised version of the same circular was introduced since the rapid pace of technological change made some of its due diligence requirements no longer aligned with the needs of the financial market and financial intermediaries.

Bright outlook

Digitalisation clearly is crucial for the Swiss financial sector and the events of 2020 determined a change of mindset. Managing the relationships with customers via digital channels could progressively become the new normal. So, it is to be expected that Swiss banks are going to invest more and more resources in implementing digital account opening processes that are easy, safe to use and compliant to the demanding requirements set by the national regulations.


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