Digital Onboarding: A Must-Know in Regulatory Compliance

 

The process of Digital Onboarding is not foreign to many. An individual would likely have experienced having to provide their personal information to organisations for education, employment, or even online purchases. 

 

As a frequent procedure undertaken by organisations worldwide, digital onboarding serves as an essential measure for compliance‌, especially in combating digital and financial frauds.

 

What is Digital Onboarding? 

Digital Onboarding is a process of acquiring new clients or subscribing new users to new services remotely. It is further described as the critical user-organisation interaction that provides security to the company and integrates the customer as a legitimate and non-sanctioned user. Generally, Personally Identifiable Information (PII) would need to be provided to the organisation by the screened individual which includes digital photos, IP addresses, login credentials and social media posts. In organisations with more advanced digital onboarding tools, they would further require geolocation, biometric and behavioural data. In addition to data collection, Facial Detection (FD) or Optical Character Recognition (OCR) checks are also conducted during onboarding.

 

Digital Onboarding is defined as a non-face-to-face (NFTF) customer due diligence (CDD) measure, aiming to provide clients with simplified and smooth onboarding experience.

The process can be completed within a few simple steps, as shown below: 

Benefits of Using Digital Onboarding

In a world that has increasingly called for stricter regulatory compliance requirements, digital onboarding has enabled a seamless and convenient process in adhering to the regulations. The module has hastened the pace of screening each individual or entity. It allows the screening to be done remotely, which is highly essential in the current climate where many are working or requesting for services from their homes. Digital onboarding has many other beneficial points which include, but are not restricted to: 

 

  1. Time and Cost Efficient: With digital onboarding modules, most of the onboarding process becomes automated. This decreases dependence on manual work by compliance officers or other employees involved in the compliance process, thus saving on time, manpower and also operating costs.

 

  1. Improved User Experience: Individuals or entities being onboarded can expect lower waiting times in completing the automated onboarding process, while eliminating the need to revert back and forth with personnels of the organisation. Digital onboarding can screen and monitor illicit activities, which enhances the safeguarding of those being onboarded, especially consumers. 

 

  1. Confidentiality of Information: Digital onboarding is conducted through a secure application programming interface (API). This means that confidential information is stored safely and out of reach from criminals. 

 

Challenges of Using Digital Onboarding

Despite its convenience and efficiency, digital onboarding is not a foolproof method to prevent money laundering or other crimes from occurring. In actuality, there are some common challenges, which include: 

 

  1. High-Cost: It is estimated that each screen could cost approximately USD 1 to USD 2. In large volumes, digital onboarding proves to be extremely costly, especially if no discounts are provided on the modules.

 

  1. Identities can still be falsified or stolen: There are companies which conduct digital onboarding without requiring real-time proof, such as a live selfie. This would enable fraudsters to be allowed on the platform. Similarly, false documents could be submitted which incur the aforementioned issues. 

 

Digital Onboarding is a Requirement

Digital Onboarding has been stipulated as a requisite in many legislations across the world. In Singapore, the Monetary Authority of Singapore (MAS) has recently made a new announcement on 8 February 2022, which stated that organisations ought to take NFTF CDD measures, which include digital onboarding. 

 

MAS notes that many financial institutions in Singapore have integrated the request of information from an individual’s MyInfo account as part of their onboarding process or conduct video calls in order to verify identities. However, this may not be sufficient as fraudsters can still hack into a victim’s MyInfo account or pretend to be someone else on video calls if their identity is left unverified. As a result, additional steps should be taken to prevent such occurrences. 

 

As an example, companies are encouraged to purchase digital onboarding modules with liveness detection tests. An initial transfer of funds should be made to the company using a verifiable and reliable bank, so that the legitimacy of the person or entity can be established.

 

Regtank’s Digital Onboarding Module

Regtank’s Digital Onboarding module offer liveness detection tests where the individual or entity onboarded is required to submit identification documents before taking a live selfie. Here, the digital onboarding tool will ‌determine whether the individual in the live selfie matches that of the individual in the documents, preventing identity fabrication. Our digital onboarding module also utilises our very own API and client interface, whereby the onboarding process can be completed in easy steps and without hassle. 

 

Contact us at info@regtank.com for more information on our intuitive and comprehensive digital onboarding module!