The Fintech strategy of Digital customer onboarding!
If you have made an online payment, booked a ticket, opened an account online, you have used fintech and contributed to its growth. The fintech market in India was valued at INR 2.3 trillion in 2020 and is expected to grow 3.5 x to INR 8.35 trillion by 2026 which gives a good indication of where this sector is heading.
Fintech companies are tiny compared to traditional banks, yet they are challenging them tremendously. The Davids are using advanced technology as their weapon in taking on the Goliaths. Their agile approach and smart user interfaces can board new customers in minutes with no human intervention.
What are the advantages of digital onboarding?
Cool customer experience
Less processing time
Optimum use of resources
Cool customer experience – The main reason why customers leave is when they have a poor onboarding experience. Fintechs offer customers a delightful experience from the word Go which helps them to onboard customers faster. Fintechs are targeting the younger generation of customers who want a cool experience.
Efficient platform – Digital onboarding systems focus on building a single integrated platform that manages all the activities.
Less processing time- The time taken to onboard a customer is a few minutes from opening the application on the smartphone to completion of the process and activation of the account.
Ultimate convenience – In today’s busy world, everyone wants solutions at their fingertips. In a world bound by pandemic restrictions, digital onboarding is an ultimate convenience because customers can onboard anytime, anywhere. Shifting their technology to smartphones has been the smartest move that Fintech has made. This has made products more accessible.
Smart form – Most digital onboarding platforms use a smart form that can pull customer information from the identification documents provided and populate the form automatically.
Intelligent APIs – Fintech strategy is to use intelligent APIs to perform back end activities like customer identity verification, credit checks, bank account verification very quickly and accurately. This eliminates human errors.
Optimum use of resources – Since human interaction is eliminated, the cost of operations is automatically reduced.
No paperwork – The best part of digital onboarding that appeals most to the younger generation is the elimination of paperwork. There are no more forms to fill in or photocopies to submit.
The use of new technologies like Blockchain and AI will improve efficiencies in the Fintech universe. Blockchain technology is expected to enhance data storage and security capabilities.
It can help to secure the digital identity of the consumer as well as help the business to safely manage customer data.
AI is contributing by predicting the needs of the customers. The next stage of AI will include robotic chatbots and Robo advisers for interaction with customers. This will improve the customer onboarding experience.
The Fintech strategy of digital customer onboarding has been about providing a quick, comfortable and seamless experience for customers that helps them access products and services easily. The strategy has been to differentiate from the traditional businesses in the same category and enhance the quality and variety of offerings.
Traditional banks cannot afford to behave like ostriches with their heads buried in the sand. They will have to tie up with Fintechs to get the benefit of digital technology if they want to avoid losing their customer base.
With the growing use of smartphones and easy access to cheap internet connectivity, Fintech is ready to ensure the penetration of credit to the underserved segments of the population. The pandemic offered a golden chance to Fintechs to establish their value proposition and this trend will remain on an explosive growth path in the coming decade as it has enhanced customer experience and improved the overall efficiencies of the customer onboarding process. Globally, the fintech industry is booming and India is on a roll being one of the largest contributors to the fintech ecosystem.