What onboarding in consumer banking was five years ago, where it stands today, and where it's heading is a business-critical change worth both understanding and optimizing. Because while the goal – opening a bank account – remains the same, consumer expectations, the process itself, and the security measures involved have all been redefined.
Onboarding in Consumer Banking: A Shift Towards Ease and Speed
Today’s onboarding experiences must be delivered with convenience and speed; anything else will disappoint. Gone are the days when applying for a mortgage meant visiting a brick-and-mortar branch with a stack of documents and a great deal of patience. Now, customers can kickstart the application process from the comfort of their homes or any place with internet access.
Online banking services have become so common that according to Forbes, more than 70% of adults in the U.S. prefer banking through mobile apps or websites, while only 29% favor in-person banking. In this landscape, banks must recognize that competitors are just a click away. Ensuring a seamless entry through your digital front door and beyond is therefore essential.
As the user journey unfolds, an ongoing balancing act is required: A good user experience, with all its significance, must share the spotlight with an equally critical player – high security.
The balancing act: Key technologies to achieve secure and user-centric onboarding
While a clear convenience factor has driven banking customers online, digital transactions and the exchange of sensitive information in the cloud necessitate robust security measures. Robust security measures, led by Identity & Access Management (IAM) and key cloud technologies, are essential to protect against threats like identity theft, fraud, and data breaches.
IAM can provide a framework that ensures the right individuals have the right access to systems, applications, and data. Here are some key security measures that consumer banks should have in place:
- Secure Document Verification: Advanced document verification technologies enhance the onboarding process by validating the authenticity of customer-provided documents, thereby mitigating the risk of fraudulent activity. Additionally, liveness checks ensure that the individual presenting the document is physically present in front of the camera and matches the picture on the document.
- Modern Authentication: Advanced authentication such as Multifactor Authentication (MFA) is highly effective against account take-overs and attacks, adding extra layers of security by combining something the user knows (a password) with something they have (a mobile device or token) and something they are (biometric data). Passkeys, replacing passwords, emerge as the superior authentication choice. Since tech giants such as Apple, Google, and Microsoft have adopted this standard, it is likely to gain widespread adoption. Yet, it’s important for financial services to understand that the passkey discussion centers on synced versus device-bound options. Synced passkeys, while highly user-friendly, fall short of Strong Customer Authentication (SCA) rules, necessitating an alternative, namely device-bound passkeys. Device-bound passkeys are uniquely tied to a single device, ensuring SCA compliance. The recommended onboarding approach varies based on the risk assessment—synced passkeys for low-risk scenarios and device-bound passkeys for high-risk activities like transactions.
- Continuous Monitoring: Fueled by intelligence, continuous monitoring tailors user authentication dynamically. The collaboration between AI and real-time monitoring, alongside Identity and Access Management (IAM), identifies and responds to anomalies during the onboarding process, adjusting authentication as necessary. Furthermore, AI analyzes extensive behavioral data to detect and prevent suspicious activities in a user-friendly manner. In the interaction between customers and AI, prioritizing "explainability" is a user-centric essential. This involves clearly communicating the consequences of a decision and articulating the rationale behind the computer's choices, ensuring users comprehend the logic behind AI-driven outcomes. This emphasis on transparency fosters trust in the onboarding process.
Take the next step in secure consumer banking
Onboarding in banking demands a delicate balance between convenience and security — two indispensable facets of the same coin. While providing customers with a seamless experience, it is imperative to implement robust security measures to safeguard customer data, fortify transactions, and uphold trust within the industry. Striking the right balance is essential for ensuring the future of consumer banking remains both efficient and secure.
Instill trust and explore the highest security solutions for financial institutions in modern consumer banking.