Digital Onboarding: How Does It Work?

Last Updated: 

April 3, 2023

Digital onboarding is crucial to an online company. Businesses help their users know more about their products or services with this process. 

The digital onboarding process is key to retention and increases sales. Thus, a company needs to have a sound, fully-functional, and viable virtual orientation process. However, most companies struggle with this. Some customers may find the procedure too stressful and quit halfway. On the other hand, companies find it difficult to balance customer satisfaction with onboarding standards. 

A business needs to understand how digital onboarding works to design or outsource one that meets its customers' needs. That way, it can be beneficial to both sides. 

This article discusses digital onboarding, its benefits, and how it works. Consequently, you will know the process and how best to use it to boost your brand's traffic, customer retention, and loyalty.

Key Takeaways for Digital Onboarding:

  1. Digital Onboarding Process: Digital onboarding is the online process of introducing new customers to a company's products and services.
  2. Benefits: Creating a great first impression, ease of use, time savings, real-time efficiency, increased customer conversion, and reduced fraud.
  3. General Steps: Request for onboarding, collection of basic data, customer identification, and marketing intermediate steps.
  4. Role of Technology: Technology plays a crucial role in ensuring an effective and user-friendly onboarding process.
  5. Tips for Success: Being customer-oriented, frictionless, customised, avoiding excessive questions, and optimising for mobile.
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What is digital onboarding?

What is Digital Onboarding?

Digital onboarding refers to how companies introduce their products and services to their new customers online. With it, you can teach and guide your customers on how best to use your products and services.

There is so much competition for clients in the business world. Thus, it would help if you made an excellent first impression on a customer to increase your chance of retaining them and increase website traffic and sales. 

Digital onboarding is the beginning of your interactions with your customer after they buy from you or subscribe to your service. Hence, ensure you do it right to improve their chances of continuing with you. 

What are the benefits of digital onboarding?

Besides serving as a medium for welcoming customers to your business and showing them their way around, digital onboarding has other advantages. These include:

It allows you to make an excellent first impression

Digital onboarding allows a company to set the tone for future interactions with a customer. If the company does this right and impresses the customer from the start, it is more likely for them to have a long-term relationship. On the contrary, if a company's onboarding process is terrible, the client may leave for another brand. 

It is easy to use

Anyone with an electronic device and internet access can do digital onboarding anywhere. Hence, a customer doesn't need to come to an office to submit information. This makes the process easy and stress-free. 

It saves time

Automation is a crucial feature in digital onboarding. Therefore, you can extract a customer's personal information from their ID card to fill out forms. As a result, the customer spends less time with the process, leading to satisfaction and a higher chance of a conversion. 

It is efficient in real-time

A significant part of the digital onboarding process is verifying a customer's biometrics and existence. A company also needs to enact several security measures. You perform all these actions in real-time, efficiently, and effectively. 

It increases the conversion of new customers

If the digital onboarding process is user-friendly, easy, and quick, customers will enjoy it and most likely want to remain with you. The customer will also leave positive reviews and recommend you to others. 

It reduces fraud 

Financial institutions always deal with revenue loss due to fraud. It is more difficult for banks to avoid security breaches with technological advancements. 

Financial institutions give out loans and other incentives to their clients/customers. However, understanding loan fraud and its causes mitigate the risks. 

A sound digital onboarding process increases a company's system's security and reduces fraud. This is because digital onboarding provides a business with several tools to enable them to verify customers' identities. Such checks are vital in helping such institutions to keep track of clients and trace them if they suspect fraud. 

How does digital onboarding work?

How does digital onboarding work?

Digital onboarding is essential for many companies, especially financial service providers (banks, fintech companies, and loan apps) that operate online. Technology and security measures allow these companies to incorporate new customers anywhere, anytime, and through any device. 

There are several processes necessary in digital onboarding. However, one feature of an excellent digital onboarding system is simplicity. 

The following are ways to improve customers retention with digital onboarding: 

  • First, the onboarding should involve quick and straightforward steps
  • Then, you avoid asking for more information than your customer can provide

However, companies, especially financial institutions, who onboard their customers online must follow specific rules. These regulations are standard and called Know Your Customer/Know Your Client. 

Know Your Customer (KYC) is a customer identification process that financial institutions worldwide adhere to. The process's design works to answer the following questions about a client/customer:

  • Who is your client/customer?
  • Are they who they claim to be?
  • Do they have legitimate income sources? 

The KYC process is not straightforward because it requires customers to provide much information during onboarding. KYC is crucial to financial institutions and governments as it is one of the Anti Money Laundering (AML) measures for fighting financial fraud. Therefore, you can't do without asking customers such questions to ascertain their authenticity.

Note that customers often find the questions and the information required cumbersome. Hence, they hardly complete the digital onboarding process. 

However, you can avoid losing your customers during onboarding by making the process easy and fast. That way, you can get the information you need without putting a strain on the customer. So design or invest in digital onboarding systems to ensure user satisfaction, compliance, and lead conversion. 

A typical digital onboarding process should include the following:

A request for onboarding

Leverage your company's digital channels to attract more customers. Then, bring in these new customers through an automated onboarding process that is fast, more secure, and less error-prone than traditional means. 

With digital onboarding, customers will easily comply with financial laws and regulations. So, ensure the process is user-friendly and stress-free.

Collection of basic data

The digital onboarding user interface should be simple and allow customers to easily upload the required data and documents. In addition, the onboarding process should be well-designed and accommodate interruptions. It should also secure customers' data. 

Customer identification

After obtaining a customer's basic data like name, address, photo, etc., the next step is KYC analysis. This stage involves verifying and authenticating a customer's identity and documents to see that they match. 

KYC analysis may involve the following methods or processes:

  • Biometric facial recognition
  • Video call with an operator
  • Uploading a picture or video of the customer and their ID document.

Marketing intermediate step

Here, you can get additional information from the customer. This extra data should include their interests, behavior, service objective, etc. Use the information gathered here to provide tailor-made services or products for the customer. 

The importance of technology in digital onboarding

The importance of technology in digital onboarding

Technological advancements are common in today's world. Digital onboarding is one of those processes where technology plays a vital role. However, with tech constantly advancing, ensure your onboarding processes evolve. 

Hence, your company's onboarding processes should have the right digital tools that guarantee customer satisfaction while adhering to the proper standards. Also, examine your business and look for the best ways to please customers without putting yourself at risk. 

Finally, always ensure your digital onboarding tools are up to date with the latest technological and market trends. That way, your brand is not just innovative but also customer-centered and a step above the competition. 

Customer digital onboarding tips 

The following are practical customer onboarding tips: 

  • It should be customer-oriented

Customer digital onboarding should focus on what clients want. Hence, ensure you provide customers with step-by-step guides to complete the onboarding process.

  • The onboarding process should be frictionless

Ensure your customer's experience during onboarding is frictionless. Accordingly, the onboarding process should not feel arduous for clients.

  • Customise the onboarding process

Tailor the onboarding process to each customer to quicken the learning phase and make their first transaction. Customise the onboarding procedure by collecting customer data and continually optimising the process. 

  • Don't ask too many questions

Customers get irritated when they answer too many questions during onboarding. As a result, most of them may quit the process entirely. 

To avoid this, ensure the onboarding process is straightforward. Also, explain each step and why it is necessary, giving the customers reasons to go ahead. 

  • Ensure your onboarding process if mobile-friendly

Most customers may complete onboarding with their mobile phones. Therefore, you should optimise your digital onboarding process for mobile platforms. Furthermore, onboarding should be fast, fun and easy, and not confusing.


Digital onboarding is critical to any online business's success. First, however, you must ensure the procedure is easy to use, fast, and secure. You enjoy multiple benefits when you adopt digital onboarding. Besides enhancing customer interactions, it also reduces fraud, increases sales, makes an excellent first impression, and saves time.

The digital onboarding process involves a request for onboarding, basic data collection, customer identification, and marketing intermediate steps. Therefore, optimise these steps and ensure customers don't get bored when performing the activities. 

Finally, technology is key to ensuring the digital onboarding process is effective. Hence, leverage technological tools to enhance user experience and security.

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