Over recent years, the speed of onboarding new customers has become a point of differentiation for retail banks. The faster they can make it happen, the better the experience is for customers, which results in increased customer acquisition. In today’s on demand society, customers don’t want to be left hanging around either. Yet according to a recent report by Thomson Reuters, it still takes traditional banks on average 26 days to carry out Know Your Customer (KYC) checks to onboard a new customer.
It’s not just a customer experience issue though. There’s also the cost involved. The same report revealed the KYC costs for larger banks are currently scaling phenomenal heights, averaging $150m per bank in 2017.
It goes without saying that banks would like to reduce these rising costs by any means.
Video and onboarding – decreasing time and cost
There are already examples of ‘challenger’ startup banks who are using video as part of the solution to onboarding costs. The best example comes from Monzo – a smartphone-only bank that is employing video as part of its onboarding to speed up the process significantly. Rather than asking customers to visit a bricks-and-mortar branch, Monzo simply asks them to send a picture of their ID with a quick selfie video for verification.
By using video, Monzo is aiming to reduce the onboarding process to just five minutes. It’s already proving to be a ‘wow factor’ for customers and a point of differentiation against competitors. And it will also significantly reduce Monzo’s costs and admin hours required to execute the task.
Progress contingent on effective video asset management
The growing use of video offers a major benefit to financial institutions. However, it comes with the need to be able store, tag, archive and retrieve those assets efficiently. In the finance sector, this also needs to be done in way that will enable eDiscovery and comply with regulations such as MiFID II and the GDPR.
At the moment, this is not something that financial institutions do particularly well, largely because they haven’t had the need to do it before. But as the volume of video data increases, and not just from new onboarding processes, it will be another challenge for them to overcome. Managing all this video efficiently, effectively and compliantly is something they’re going to need to find a solution for soon.
Read more about video in financial services and the Media Asset Management system required to manage it on our latest report: Video in Financial Services: Solving risk and compliance challenges