The experience of spending hours in long lines to open a new account or to transact business is a common Filipino banking experience. But the current pandemic has already led to sweeping changes. Today, enterprises in the Philippine finance industry like banks are using digital onboarding to accelerate the development of connections with their customers.

What is Digital Onboarding?

Digital Onboarding as Used in Banking

Digital onboarding is referred to someone opening a new account with a business or service. This term has its roots in the banking industry when digital onboarding means a customer wants to open a new bank account online. But before doing this, they would need to verify their identities first with the bank.

Before the dawn of digital onboarding in financial services, banks had to confirm their client’s identities through officially endorsed documents that were either mailed in or dropped off. A face-to-face interview was also part of this onboarding process. This led to long wait times.

It was in 2016 when the Swiss financial regulatory authority FINMA allowed banks to go through with digital onboarding for many financial services, starting with the use of videos for identity authentication. This formed the basis of what we know of digital onboarding today.

The First Touchpoint

What makes digital onboarding an essential part of transforming the finance industry for the digital age? While all industries can benefit from adopting digital onboarding, it has become an increasingly crucial part of how we interact with banks and other financial service providers. The effects of the COVID-19 pandemic have lead to certain consequences:

  1. In a recent survey, 41% of respondents were unable to physically access financial services due to the pandemic, while 63% have completely abandoned the notion of onboarding or signing up for a service.
  2. In the same survey results, 10% of respondents mentioned that they stopped going through an onboarding process because of the “confusing” language used in forms. Meanwhile, 15-20% gave up on signing up because it took so much of their time.

Banks cannot be bogged down by both operational and regulatory processes. While these are important for the bank’s survival and for compliance with regulatory standards, the expectation of quick and reliable access to these services should be a top priority. Aside from complying with regulations, guaranteed security and privacy of information must be addressed. The proper handling of customers’ use and access to data not only saves time for customers, but it will help in gaining their trust and confidence.

Having digital onboarding as the first touchpoint allows companies to initiate building brand equity with new customers and help retain old ones. In a study that highlights the accelerated shift to digital conversations due to the pandemic, 86% of respondents show a preference for digital interactions to other forms of communication. This is also born not from choice but also by necessity, as 40% of consumers have changed their preference from direct mail to digital means. Digital onboarding will not only accelerate service delivery and enhance security, but it will ensure that an enterprise’s services are readily accessible to the most loyal section of the customer base.

Digital Onboarding in Philippine Financial Services

In Digital Banks

There are several local banks or subsidiaries of international banks that have adopted a form of digital onboarding. Of note are UnionBank and CIMB Philippines.

UnionBank

To address the needs of their clients and to open its doors more to new customers, UnionBank launched its digital banking platform, The Portal. Customers can access services such as withdrawals and deposits, bills payments, or loan applications, while enterprise clients can initiate payroll, fund transfers, check writing, access credit facilities, and more. It is the first digital broad-spectrum service for businesses, a huge demand given the need for businesses to operate and transact at near-instant speeds. According to Ramon Duarte, head of UnionBank Transaction Banking, the release of the Portal coincides with and answers the increasing usage of digital and mobile solutions among their customers, with “everybody from individuals to business folks becoming more comfortable” in using technology.

By using The Portal, clients can use the platform and onboard themselves in minutes instead of hours, all without the assistance of bank staff or additional training. Existing clients that are using the bank’s digital banking services are instantly migrated to the new platform. The bank is also in the process of migrating all accounts to the Portal. In addition, the new onboarding platform takes advantage of cloud-based infrastructure, adding increased capacity and flexibility for app and web functions.

CIMB and Jumio

CIMB Philippines, one of the few all-digital banks in the country, recently picked Jumio as its end-to-end identity verification provider. With its AI-driven identity verification technology, it provides a “safe, secure, and fast digital onboarding experience, reducing the requirements for KYC onboarding from 15 minutes and video verification to less than 5 minutes. The solution includes the use of machine learning technologies, as well as certified liveliness detection and face-based biometrics for proper identity verification. Instead of using video, Jimio’s program asks for a user’s live selfie-and matches this with a government-issued ID’s photo.

According to Robert Prigge, CEO of Jumio, it’s becoming increasingly important for the banks in the Philippines and the APAC region “to offer a streamlined digital onboarding process.” With the increasing number of cybersecurity cases in the country, it has become crucial to deliver a “safe and secure banking experience”- as CIMB Bank PH CEO’s Vijay Manoharan added. In the bank’s first full year of operations, all in the pandemic, nearly 2 million Filipinos have signed up for a digital account, 30% of whom were first-time bank customers.

CIMB’s rapid increase in new users due to better digital onboarding show proof of the growing demand Filipinos have for digital financial services. With a final target of 3.5 million signups by the end of 2020, the bank aims to solidify its position as a major player in the country while continuing to offer an ideal customer experience for all customers.


Looking Beyond: The benefits of digital onboarding also apply to other industries beyond digital banking:

  • Reliable and convenient access to products and services
  • Fast and secure identity verification 
  • Reduces wait times and service delays
  • Eliminates the need for customer onboarding training
  • Answers the demands of today’s digital native customers

Bankers Association of the Philippines

The Bankers Association of the Philippines (BAP) is the lead institution that organizes the universal and commercial banks in the country. They are also the leading body that develops and promotes policies and technologies for financial inclusion and innovation.

Blockchain-based Digital ID System

The BAP and Amihan worked together to create a digital national banking ID registry built on Blockchain. Using distributed ledger technology to secure user and transaction data, the national registry uses an Electronic Know Your Customer (eKYC) process that will guide new customers to creating new bank accounts and access services. The information is then stored and secured on the blockchain to be shared with all member banks of the BAP. When customers want to go to a different bank, they no longer need to go through the onboarding process again as their data can be accessed and used upon their permission.

In the traditional onboarding process, banks ask customers to submit identification and fiscal documents to serve as proof of their identity. This is not only slow and time-consuming but it is also a risk to data privacy- many of these documents come in paper form and can get lost or be modified. Through the new national digital ID, customers have more choices where to take their business and have more control over their information. Banks meanwhile can divert their resources to become more agile and competitive.

Regardless of bank or branch, and as long as it is within the BAP’s network of member banks, customers can open accounts, apply for loans, and invest in and buy insurance.


As a key takeaway: The financial services in the Philippines, through its use of new digital onboarding methods, are paving the way to enhancing how customers can access much-needed banking and insurance needs. While the pandemic has certainly hastened the timelines for adopting these solutions, it has also shown that the market is already primed to accept the use of such technologies if it can offer positive and tangible results.

Amihan’s SimpleOnboard is a digital and omnichannel onboarding solution created to simplify customer journeys. Available as a SaaS, it transforms your business’s traditional channels and use of costly paper application forms to a system that allows you to sign up your customers seamlessly on the web, through chatbot, or on their mobile devices.

Schedule a demo to learn how SimpleOnboard can help ease your customer onboarding experience.