What Is Customer Onboarding and How Can You Optimize the New Client Experience?

Understanding Digital Customer Onboarding

Customer onboarding is the bridge from someone considering a purchase to actually becoming a customer. It might be as simple as completing an online form, or it could require more steps, such as software integration, training and on-site visits.

Customer onboarding is crucial because it sets the tone for the business relationship. A slow, cumbersome process can sour the relationship and even lead to customer abandonment.

A clear understanding of what to collect and why can lead to smooth processes that take into account the customer’s point of view.

Collecting Customer Information for Trust, Safety and Compliance

Digital customer onboarding for unique accounts generally requires at least an email address for registration and account recovery.

Beyond that, the amount of customer information required depends on the use case and the risk associated with the service. If an interaction involves personal information or transactions, the risk to customer data and the business is higher and requires more customer scrutiny.

For some services, collecting and verifying customer identity information is not an obligation. But many of those organizations do it anyway as part of trust and safety programs to protect customers and the business’ reputation.

Other services require collecting payment information, such as credit card details, at onboarding to help ensure the account is in good standing. That often involves identity verification to ensure the payment information is legitimate.

If a business operates in a regulated industry, such as financial services, collecting and verifying identity information is legally required to meet Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements.

Regulations and legislation provide the specific requirements for collecting and verifying identity information. The Financial Action Task Force, an independent intergovernmental organization, suggests using reliable, independent source documents and data.

Two common methods of remote identity verification are:

Digital Identity Verification

Collect identity data such as name, address, birthdate, national ID number or mobile number and check it against known data from accurate sources.

Identity Document Verification

Capture images of government-issued ID documents, such as a driver’s license or passport, with a mobile device or high-quality webcam and determine if they are genuine and unaltered. Customers can also submit a selfie, which is checked for liveness and compared with the image on their ID.

KYC: Best Practices for Know Your Customer Identity Verification | Trulioo from Trulioo on Vimeo.

Verifying Business Customers During Onboarding

Organizations also need verification processes for business customers. That can range from straightforward verification to taking a deep dive into the business details.

A business, for instance, might act as a third party entity and represent numerous accounts that require verification to ensure overall trust and safety. There also could be significant changes in the amount and complexity of transactions that require enhanced due diligence to understand the risk posed by the business.

When organizations conduct merchant onboarding, they commonly require the merchant’s name, registered business or tax identification number, and the registered business address. Additional due diligence could involve the type of business, sales turnover, bank account details and beneficial ownership information.

Collecting beneficial ownership can be a challenge for multiple reasons:

  • Corporate transparency can be hampered by fragmented and inconsistent data from national registers around the world
  • Legal corporate structures with multiple ownership layers increase the number of entities to be verified
  • Beneficial ownership verification can be document-centric and manual, diminishing the capacity to manage risk and compliance
  • Documentation is not standardized across countries, making it more difficult to comply with regulations and verify ownership

The additional scrutiny and complexity of business verification takes time. The average onboarding time for a new corporate banking client can reach 100 days.

Deploying a Systematic Approach to Risk

Understanding the risk a customer poses to the business and responding appropriately is at the heart of a risk-based approach to onboarding. Understanding different risk scenarios and adjusting onboarding accordingly can minimize friction and maximize risk mitigation.

A risk-based approach to onboarding provides that flexibility. It allows the organization to determine the risk level in a market segment and apply appropriate verification checks for that scenario. 

Some risk considerations include:

  • The types of accounts offered
  • The methods of opening accounts
  • The types of identifying information available
  • The organization’s size, location and customer base, including the types of products and services used by customers in different locations

A fraud risk management program gives your business a framework for identifying, assessing, mitigating, monitoring and reporting fraudulent activities. Preventing fraud isn’t just about protecting the bottom line. It also minimizes reputational harm, helps build customer trust and can reduce friction by streamlining the customer experience.

Creating a smooth onboarding experience

The stakes are high for companies during onboarding. One study found that the global average cart abandonment rate in the banking industry was 83.6% in 2022. Intuitive digital onboarding optimized for different platforms and markets can help businesses meet customer expectations and mitigate abandonment.

Digital onboarding is the conversion point that can either turn people away or help them become loyal customers. It’s also a balancing act, with businesses complying with regulations and providing security without creating too much friction. 

As companies expand globally, onboarding customers becomes more complicated. Companies have to navigate multiple regions with evolving regulations and different risk scenarios. 

Successful onboarding often requires identity verification tools that work in tandem and are:


Cumbersome processes can frustrate customers and increase the risk of abandonment. Accelerated and secure identity verification can meet customer expectations for a smooth experience.


Precision in identity verification builds customer trust, enhances security and saves time for the company and customer.


Identity verification fueled by global data sources and the ability to analyze that data can help companies avoid false positives, increase match rates and provide smooth onboarding experiences. 


Robust and adaptable identity verification can help companies meet evolving regulations and customer expectations around the world and quickly scale their operations.

Companies that view onboarding as a product and provide low-friction, secure experiences can differentiate themselves in their market. Onboarding is often one of the first impressions customers have of a company, and if it meets their expectations, it can build trust and loyalty.

Investing in customer onboarding technologies can position companies to expand their reach globally, enhance security and easily adapt to evolving regulations.