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PaperLess Account Opening

Banks are prone to Frauds , Duplicate or fake documentation provided by customer , time consuming process to fill up all details of the application , information collected by bank are variable in nature and not uniform across banks. To overcome all these issue banks decided to go digital paperless account opening process.

Paperless Account opening helps bank to onboard customer digitally and quickly and with least documentation during account opening Process. Banks would like to attract more customer with such facility and onboard more customers and increase their market presence.

Customer information are digitally stored in a centralized location in form of Social security Number, Driving license number, passport details and so on… These information are unique in nature and can be used to gather customer data like Customer Name, Date of Birth, Address, Photograph, Phone number, Email Id and other details. Moreover these information are authenticated with respective agency before collecting and storing the customer information for their verification purpose.

As and when customer needs to open a bank account, Bank needs a finger print / Bio metric of the customer, Say for example customer provides a SSN number during account opening process, Bank will capture the thumb impression of customer with the SSN database which is interfaced online with bank system. Based on the server response  System automatically download all customer related data from the SSN server to Bank system as required by the bank such as Name, DOB, Gender, Address , Phone number , mail id etc.

Bank user can verify all the details real-time across the counter and open the customer account immediately in quick time without any issues. There are various advantages with such system as below

 

  1. App based (Android / Ios) application are developed by bank and provided to bank users / agents for quick account opening either at branch / customer location real-time.
  2. Customer consents are taken digitally for accessing their information from the respective agency and accounts are opened as quickly as possible.
  3. E-Acknowledgment advices and confirmation are provided to customer during account opening process for the information taken from the centralized locations.
  4. Account number are shared instantly and provided to customer across the counter.
  5. Bank can reduce Turnaround time for account opening with such online process and reduce paper filling activities by the customer, as everything is digitalized.
  6. For Instant account opening say for corporate salary accounts for big corporate clients, these methodology is used for instant account opening.
  7. ATM cards , Internet banking ,  Mobile Banking  credentials are real-time synced with account number of the customer and send digitally to customer email / mobile number during account opening process.
  8. This process will reduce fraudulent activities and reduce erroneous -documentation during account opening process as all information are verified by the respective authorized and can be re-used by the bank for their purpose.
  9. Apart from App Based account application, Customer can onboard real-time with online banking platform of the bank and open the account. But Bank request customer to visit the branch once before the account is getting activated and capture the biometric information for the E-KYC process.
  10. Virtual Debit cards are provided for online account opening apart from physical debit card for all your electronic transactions.

Data captured are uniform across the customer onboarding with paperless account opening. Further bank can use this data for other cross selling products such as Loans, Credit card, Mutual funds and Insurance products. Customer are provided with hassle free account opening experience real-time and get on boarded as and when required from the comfort of home / office instantly.

 

PSD2 (Revised Payment Services Directive) is new banking regulation provided by EU commission. As PSD2 regulations have to be implemented mandatorily by banks from 2018. In short, PSD2 enables bank customers, both consumers and businesses, to use third-party providers to manage their finances. In the near future, you may be using Facebook or Google to pay your bills, making P2P transfers and analyze your spending, while still having your money safely placed in your current bank account.

 

PSD2 will enable new entrants competing with banking companies such as Fintech, Payment Companies to meet the customer expectations.  PSD2 will fundamentally change the payments value chain, what business models are profitable, and customer expectations. With PSD2 there are lot of opportunities in the area of OPEN BANKING, API BANKING and BLOCK CHAIN technologies for the bank.

 

Through the directive, the European Commission aims to improve innovation, reinforce consumer protection and improve the security of internet payments and account access within the EU and EEA.

 

It introduces two new types of players to the financial landscape: PISP and AISP. 

-AISP (Account Information Service Provider) are the service providers with access to the account information of bank customers. Such services could analyze a user’s spending behavior or aggregate a user’s account information from several banks into one overview. 

-PISP(Payment Initiation Service Provider) are the service providers initiating a payment on behalf of the user. P2P transfer and bill payment are PISP services we are likely to see when PSD2 is implemented.

 

PSD2 ensure there are lot of opportunities in the area of Application Programming Interface (API) for each of the new enabled service types: Payment Initiation Services (PIS), Account Information Services (AIS) and Payment Instrument Issuing (PII). 

 

Paperless account opening will be the next generation application for client onboarding as per EU compliance regulation going forward. Banks will change accordingly to ensure regulation are met and customers are on boarded.

 

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This post is from a series of posts in the group:

Banking Strategy, Digital and Transformation

Latest thinking in respect to Banking Strategy, Digital and Transformation. Harnessing our collective wisdom to make banking better. Ambrish Parmar


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