Virtual banking places demands on providers that were not known in the past. Virtual banks are expected to maintain the highest levels of security and customer protection while delivering frictionless services to customers on their computers and mobile devices. In this article, Managing Partner of Nicklaus Brown & Co. Rory Brown discusses how advanced customer experience supports the growth of the virtual banking industry.

Onboarding New Customers and Accounts

As the competition between virtual banks increases, providers will continue to find that simple and efficient onboarding is crucial to begin a successful customer relationship. Abandonment of the process is very common when customers are required to visit a physical branch to open an account or if the online onboarding process is unwieldy. Customers typically find this process fast and straightforward compared to the traditional process at a bank branch.

Compliance With Know Your Customer Regulations

Fintech advances have helped turn the Know Your Customer (KYC) process from a very complicated procedure into a more streamlined process for both the customer and the virtual bank through electronic compliance methods (eKYC). Physical bank locations traditionally are obligated to review identifying documents such as a driver’s license or passport. Virtual bank customers are now able to use virtual bank apps to submit proof of identity by taking and submitting photographs for analysis by machine learning software.

Customer Authentication and Determining When Authorizations Are Needed

Once a customer’s account has been created, and eKYC requirements have been completed, accounts can be used through the virtual bank’s web interface or mobile app. Ordinary low-risk transactions can normally be completed with simple password authorization. However, systems are now being used that recognize transactions that require higher levels of authorization. Customers typically appreciate the need for additional authentication to protect their accounts and the ability to use additional authentication methods that don’t require them to go to a branch.

Applying for Loans

One of the major conveniences that customers enjoy through virtual banking is being able to shop for loans online. To protect the customer’s information, virtual banks maintain safe and simple processes to obtain the customer’s consent to use and analyze their confidential financial information. As a customer uses a virtual bank’s website or mobile app to ask for offers for loans or other products, the bank’s system should consistently and effectively seek and obtain the customer’s consent.

As virtual banking and fintech developments advance, the importance of quality customer experience will continue to drive competing virtual banks to excel in their online processes.

About Rory Brown

Mr. Rory Brown has focused on financial technology and investment management for 30+ years. Rory Brown Co-Founded one of the world’s first Internet Banks and writes extensively about the industry.