Transforming Digital Customer Onboarding for European Financial Institutions

The onboarding experience isn't just a customer's introduction to your bank; it's an opportunity to make a powerful first impression. This first interaction sets the tone for a customer’s future engagement, influencing their satisfaction, loyalty, and willingness to engage with the broader range of services your bank has to offer. Despite this, research indicates that most banks continue to use cumbersome onboarding processes, resulting in high customer abandonment rates.

For example, many customers abandon the onboarding processes due to lengthy or complex procedures. According to a study by Arkwright Consulting, cart abandonment rates at different stages of the sales funnel for European banking can range from 67% to 80%, highlighting the potential value destroyed by clients leaving the onboarding journey.

In another study, Fenergo found that 67% of financial institutions have lost clients due to slow and inefficient client onboarding and KYC. According to their findings, the high abandonment rate was attributed to several factors, including poor customer experience and delays in processes (cited by 77% of banks) as well as complex onboarding processes (cited by 45%).

The challenge of European financial institutions (FIs) balancing compliance, user experience, and security

European FIs are at a crossroads. In today's rapidly evolving digital landscape, they face the growing challenge of balancing the rising demand for seamless customer experiences with the complexities of regulatory compliance, rising fraud risks, and evolving customer expectations.

These banks operate under some of the world's most stringent regulations, including KYC, AML, and eIDAS. These compliance mandates call for rigorous identity verification and transaction monitoring to prevent financial crime and ensure customer protection. Non-compliance can lead to substantial penalties, legal repercussions, and significant reputational damage. The ambiguity surrounding certain standards, such as those for advanced electronic signatures (AES) under eIDAS, further complicates the compliance process, requiring FIs to invest heavily in legal expertise and robust compliance frameworks.

Plus, traditional onboarding processes often involve disjointed workflows, forcing customers to endure redundant identity checks. This poor user experience leads to customer frustration, high abandonment rates, and lost revenue opportunities. In an age where customers expect seamless digital interactions, FIs must streamline their onboarding processes to remain competitive. Many customers abandon onboarding processes due to navigating multiple systems, highlighting the urgent need for a more unified and user-centric approach.

Finally, the rise of remote onboarding has created new vulnerabilities for FIs, with increased fraud risk at onboarding. FIs face increased risks of identity theft, fake account creation, and unauthorized transactions. Basic e-signature methods often lack the robust identity assurance and security controls necessary to effectively combat these threats. This leaves both FIs and their customers exposed to financial losses, disputes, and potential legal liabilities. As fraud becomes more sophisticated, FIs need to adopt advanced solutions that can verify customer identities with a high degree of certainty and secure the end-to-end onboarding process.

Addressing these multifaceted challenges is necessary for European FIs to maintain customer trust, drive growth, and ensure long-term success in an increasingly digital and competitive environment. To remain competitive, FIs require a solution that streamlines onboarding, supports compliance, and improves security, without compromising user experience.

A unified approach to digital customer onboarding

Entrust has designed a solution that empowers European FIs to overcome these challenges. eIDAS AES for Customer Onboarding is a unified solution that combines eIDAS advanced electronic signatures with AI-powered identity verification. Our innovative solution helps European FIs:

• Support regulatory compliance: We’ve simplified adherence to KYC, AML, and eIDAS regulations by embedding identity verification within the onboarding and e-signing workflow. We facilitate efficient collection and verification of customer information – including document and biometric checks – and generate a detailed audit trail for compliance and dispute resolution.
• Simplify user experience for faster customer time-to-value: By integrating identity verification and e-signing into a single, seamless process, we eliminate redundant steps and streamline the customer journey. This results in faster onboarding, higher conversion rates, and increased customer satisfaction.
• Increase security at onboarding: Our solution leverages advanced ID verification techniques, including real-time document and biometric verification, to help ensure that only legitimate, verified customers can execute legally binding agreements. This significantly mitigates the risk of fraud, fake accounts, and unauthorized transactions.

Transform your digital customer onboarding workflows

eIDAS AES for Customer Onboarding transforms the onboarding process into a single, streamlined solution. This provides your customers with a more efficient, secure, and user-friendly experience, allowing them to complete the entire onboarding process in a single session. eIDAS AES for Customer Onboarding delivers:

• AI-powered fraud detection: Accurate identity verification in seconds automates KYC and onboarding, protecting FIs and reducing drop-off rates.
• Secure agreements with verified identity: AI-powered biometrics anchor e-signatures to real users, ensuring trusted digital agreements.
• Higher assurance: EU-recognized, tamper-proof digital agreements with strong signer identity verification helps meet eIDAS requirements for AES. By ensuring only verified customers can e-sign, our solution establishes strong non-repudiation, minimizing disputes, chargebacks, and financial losses.
• No-code orchestration for streamlined workflows: Drag-and-drop functionality allows for easy building and optimization of identity verification workflows with integrated AES.
• Detailed audit trails for compliance: Our solution generates meticulous logs and timestamps for every event. This supports compliance efforts and facilitates dispute resolution.
• All-in-one solution for effortless onboarding: Seamless integration of ID Verification and AES delivers a smooth, user-friendly journey, allowing customers to verify their identity and complete agreements in a single session. This unlocks faster customer value, providing immediate access to financial services.

With our unified solution, European FIs can confidently embrace digital transformation, deliver exceptional customer experiences, and thrive in a competitive market. From facilitating seamless account opening and loan applications to investment account agreements and KYC compliance forms, our solution enables FIs to optimize their operations and elevate the customer journey.

How to use eIDAS AES for Customer Onboarding

Getting started with eIDAS AES for Customer Onboarding is easy. We've designed the process to be user-friendly, ensuring a smooth experience for both your institution and customers. Here's how our solution works:

1. FI creates the AES workflow in our Workflow Studio by dragging and dropping the AES task into the ID Verification workflow. The AES task will require a document verification task and a biometric verification task to be included in the workflow.
2. The customer creates a new account.
3. The customer verifies their identity through document and biometric verification.
4. The customer accesses the documents to review and e-sign.
5. The customer e-signs the documents with AES. They successfully create their bank account.
6. The system generates an audit trail that includes details of the ID verification, signed document, and signature receipt with seals and timestamps.
7. Both FI and customer receive copies of the signed documents and audit trail. The customer gains access to the relevant financial services provided by the FI.

See it in action: Watch demo

Conclusion

eIDAS AES for Customer Onboarding empowers European financial institutions to streamline customer onboarding, enhance security, and support compliance with eIDAS regulations. By delivering a seamless and efficient digital experience, it helps FIs reduce fraud, minimize risk, and accelerate business growth in today's competitive landscape.

If your FI is evaluating a solution for digital customer onboarding with AES, it’s important to understand and follow the eIDAS regulations. Our solution is designed to support eIDAS standards for AES, providing a secure eIDAS-aligned way to verify customer identities and execute agreements faster.