How Digital Customer Onboarding Helps You Reach Millions of Unbanked

Digital Customer Onboarding in Agency Banking

According to the World Bank (UFA2020), there are almost two billion people worldwide who cannot access financial services.
This means that nearly a third of the world population has no basic Bank account, no (or restricted) access to financial services and economies that rely on cash transactions.

The unbanked population is concentrated in Asia and Sub-Saharan Africa

The Global Findex database shows that more than 20% of adults globally receive wages or government transfers in cash, and many people in developing countries pay bills in cash.

Why does this happen?

There is a whole range of reasons why these populations don’t use financial services. The most common reasons are the distrust in Banks and other Financial Institutions due to low levels of financial literacy, and the lack of proper documentation to open an account. 

Another major issue is related to distance and the isolation of rural areas. Most of the unbanked live in isolated regions. However, the financial institutions’ costs of expanding the branch network to these areas are too high. Hence, the physical distance to financial institutions’ points of sale and assistance turns to be one of the most commonly reported barriers for these populations to access essential financial services and to open a basic bank account.  

Also, many traditional Banks’ customer onboarding process still rely on paper forms and manual compliance when performing identity verification checks. All this makes the whole process slow and inefficient in serving new customers. 

So, how can Financial Institutions successfully reach the unbanked?

In emerging markets, such as Africa or the Middle East, companies have been able to build branchless banking strategies, using Agent Networks equipped with digital mobile technology. This is known as Agency Banking, meaning that authorized agents sell and deliver financial services on behalf of Banks (or other Financial Services Providers – FSP).

The role of mobile technologies, with special emphasis on the smartphone, has been very important for the development of alternative ways of distributing financial services to distant communities and rural populations.

Agents use smartphones to take any business anywhere, even to the most remote village. Smartphones make it possible for Agents to easily deliver services to last mile customers thanks to the innovative mobile and digitization capabilities.

The assistance offered by agents is crucial on the onboarding to new services since it guarantees more security to the process and improves the customer experience.

Let’s see point by point and how everything works as whole.

1. The Key role of Agent Networks

Digital Customer Onboarding is a process that has grown supported by the Agent Networks channel strategy.

Rural consumers may have lower literacy levels, less access to market information, or be less experienced in formal financial products, so they see Agents as trusted individuals from their own community who can help them.

This bond of trust between Agents and locals is key to introduce financial services to rural communities. Agents assist consumers through the onboarding process, helping them understand the service they are buying and guaranteeing everything is done safely.

2. Mobile + Biometrics Capabilities

Banks and other FSPs are building alternative delivery channels supported by mobile technology to bring more people into the financial system and consequently boost Financial Inclusion.

Digital financial services can be distributed across several platforms, such as Agents equipped with mobile phones and retail stores with POS devices (merchants as agents). In other words, mobile technology like smartphones and POS devices have the capability of running software and apps for a successful Digital Customer Onboarding in remote regions.

What about undocumented citizens?

Although mobile technology enables taking financial services to rural communities, Banks still face the obstacle of the population without legal Identity, as we mentioned before. Consumers without national Identity Documents can’t access to financial services due to security reasons.

The solution is the integration of identity verification into the onboarding process. Thus, consumers register their personal data and prove their identity during the onboarding process for the opening a bank account process or any other service.

The ability to capture biometric data with mobile devices is therefore central to serving unbanked consumers in rural communities.

(Read here about the best biometric devices for last-mile delivery of services in emerging markets).

The KYC process with fingerprint capture during Customer Onboarding is very common, especially in African countries, since many national Regulators of Banking and Telecommunications Industries implemented it as a compliance requirement.

3. Last Mile Fulfillment: Reaching the Unbanked

Customer Onboarding is the process of registering customers for services sales.

In the last years, this process has been improved through digital transformation. Digitizing the Customer Onboarding reduces manual errors, prevents loss of information and makes registration safer.

But it goes way beyond that. It allowed Banks to make field operations much more flexible and the optimization of last mile delivery.

The digitization of Customer Onboarding enabled the use of mobile technologies in this process. This way, Customer Onboarding can be done anywhere, that is, remotely. Therefore, Customer Onboarding enhanced by mobile technology allows remote operations and a better last mile delivery of services in new distant markets, where there are more unbanked people.

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Key Benefits of a Digital Customer Onboarding solution

 The digitization accelerates customer onboarding and sales without compromising any regulatory requirement.

📃 You can quickly capture and validate your customers’ documents and add biometric verification processes, without having to fill in any paper forms.

📴 Offline capabilities and mobile tools allow your Agents to overcome operational issues and take your services to new remote regions, even areas with no internet coverage.

🗺️ The Onboarding is done where your customers are, from a store or in the street, meaning that distance to financial institutions is not an obstacle.

🤝 Digital tools ensure a great customer experience: the onboarding process is more secure and service activation is much quicker.

Check how Customer Onboarding works on Waynbo

Waynbo software includes a Customer Onboarding solution.

Our Agency Banking solution is an end-to-end platform that helps you take your business anywhere, acquire new customers with full compliance and manage the Agents that are offering your services.

Request a software demonstration now and see how Waynbo can improve your alternative delivery channel!