How Can Optimize Customer Experience for Digital Banking

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Written By Devansh Vijay

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There were both positive and negative consequences to the historical shift from in-person life to the remote living during the pandemic. Positively, online businesses have seen higher profits due to the adoption of new technology by banks. Bad actors are trying to profit from this shift. Customers who demand seamless, secure digital experiences - and hate long waits for services - are in the middle.

Modern digital solutions require financial institutions to understand that customer experience is crucial. Customers are used to shopping online seamlessly and expect the same speed and ease from their banks. Customers want a faster and better online shopping experience when selecting a bank.

Banks and financial institutions must adhere to best business practices and ensure compliance in order to provide efficient and cost-effective customer retention and onboarding processes.

Many organizations are affected by Anti-Money Laundering and Know Your Customer laws. These laws and regulations have a significant impact on financial services and other industries. To protect their customers' personal data, businesses must adhere to all data protection laws. Although most people welcome these policies that protect customers and prevent fraud, it is difficult for businesses to develop robust compliance solutions across multiple languages and jurisdictions. One of the most important tasks to avoid fraud is to obtain an "accurate but fast" identity verification process (IDV).

Advanced Technologies at the Front of ID Verification

Machine learning (ML), artificial intelligence (AI), and machine learning (ML) are contributing to the security and quality of digital verification services. Forward-thinking companies are deploying AI/ML-driven solutions to verify customer identities with greater accuracy. This is done by matching faces and identity documents.

Onboarding is a key factor in retaining customers. Consumers value the process of onboarding and place high importance on it. It can be frustrating to wait for confirmations or verifications or to be transferred to a call center. This initial customer experience can be improved by a company's speed and efficiency in the onboarding process. Ask yourself if your current process is easy to understand. Is it possible for new customers to pass the verification stage easily? What is the time frame? Low onboarding programs lead to high abandonment rates. Customers are less likely to switch to your competitors if they have a smooth and quick sign-up.

An automated, configurable and highly customizable IDV solution is what's required. It uses AI and ML for all major languages and features, on-premise or cloud, and enables compliance with the strictest regulatory and business requirements. Automated AI solutions are able to use visual recognition and data to verify customer ID in just seconds. This accuracy rate is more than 98 percent.

Many digital banks today face numerous onboarding problems, including high onboarding failure rates, due to outdated, slow systems. Digital banks will not be able to reach their business goals without an IDV solution that is fast, accurate, compliant, and global. These digital banks will be able to deploy AI-powered solutions that can help them onboard legitimate customers, mitigate identity frauds that target fast-growing businesses such as digital banks, and ensure compliance in multiple jurisdictions, in multiple languages.

Security of Banks is Crucial for Digital Commerce

To support global digital commerce, banks handle millions of transactions each day. They are also constantly under attack by financial criminals who seek to exploit weaknesses in bank processing systems. The rapid growth of online payments and technological advancements have led to a need for better measures to prevent money laundering and ensure compliance with AML regulations.

Banks face a challenge in identifying suspicious activity because each transaction is unique. Banks need to keep track of every transaction made by customers. Failure to monitor its transactions could result in severe penalties and reputational damage.

AML screening is rigorous and involves screening potential customers against international sanctions lists that have been compiled by regulatory authorities from many jurisdictions. It involves authentication of user information against adverse media checks, Politically Exposed Persons (PEP), and lists in less than one second with accuracy close to 100 percent.

IDV Portability will Expand The Customer Experience

Because there is no standardization in KYC IDV (e.g. 50 states and 50 types of driver's licenses), every bank or payment processor does customer due diligence differently. These once-time-consuming KYC IDV processes are now standardized by AI and ML-powered IDV systems. This makes KYC "portable" and allows banks and customers to explore new opportunities.

One of the most popular KYC strategies is to authenticate, screen, and identify customers with human intervention. This can often take days or even weeks. These solutions can be integrated seamlessly into the firm's operations today to achieve these goals via automation.

The Criminal Curve Must Be Avoided by Robust IDV

KYC should be used to verify the true entity of the customer, as well as UBOs, third-party businesses, and other corporate entities. Online criminals and fraudsters are constantly looking for ways to defeat new security measures. A firm that fails to gather enough information in the initial KYC process can allow clients to engage in corrupt or criminal activities, which could lead to companies being subject to regulatory sanctions, lawsuits, and insurance issues. This has resulted in businesses losing business.

IDV solutions need to be able to adapt to the evolving KYC regime in order to stay ahead of the criminals. IDV solutions that are based on continuously improving technologies will enable forward-thinking businesses to reduce fraud, improve customer experience, and maintain profitability. Businesses that deliver a better customer experience and demonstrate KYC/AML compliance are more likely to be able to improve their brand image, which will help them gain a competitive advantage.

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