“The spread of the new coronavirus is exposing the vulnerabilities of some of the more antiquated corners of banking”.

The observation – by Alison Tudor-Ackroyd in a recent article in the South Morning China Post – ensued from a recent episode involving Chinese ride-hailing giant Didi Chuxing.

As reported by the SCMP, the company “hit a snag as it tried to route money from a new Latin American market to Asia” and needed to quickly open a bank account in Singapore.

Traditionally, opening a business bank account requires face-to-face meetings and signed and chopped paper documents shared between customers and the bank’s compliance team during the initial phase of client onboarding. However, in mid-February – when staff of Beijing-headquartered Didi was already working from home in light of the Covid-19 outbreak – this was not a viable option.

“To solve Didi’s problem, New York-headquartered Citigroup turned to a relatively new concept in banking: digital onboarding”.

The benefits of a digital-first and remote client onboarding experience are easy to grasp:

Working digitally, clients can open an account as quickly as a couple of days. If clients have already lodged documents with the bank, they do not have to resubmit all their data again as they would have to do in the old paper-based system every time they wanted to open an account.

Like Citi, an ever-increasing number of financial institutions are looking to make capital flows easier to manage by replacing manual and paper-based processes with digital-first procedures powered by technology.

It appears that the spread of the coronavirus is accelerating the digitisation of the client onboarding experience, starting from Asia but most likely expanding across Europe and the rest of the world in the coming weeks and months. Talking about the current circumstances, Sanjeev Jain, a senior banker in Citigroup’s treasury and trade solutions business in APAC, said: “A crisis like this is a wake-up call if you are not digital. How do you move money?”.

Both in retail and business banking, the traditional, paper-based and office-centric approach to client onboarding is showing its limitations in the face of the current crisis. Partnering with an experienced solution provider can help financial institutions of all sizes implement cloud-based technology to ensure business continuity and regulatory compliance in times of uncertainty.

At Know Your Customer, we specialise in providing easy-to-use and fast-to-implement digital onboarding solutions to financial organisations around the world. Our technology empowers compliance teams to

  1. Conduct all necessary KYC and AML checks from one centralised solution accessible anywhere in the world
  2. Acquire official incorporation documents downloaded in real-time from company registries across jurisdictions
  3. Analyse company structure charts and instantly identify Ultimate Beneficial Owners, as required by anti-money laundering regulations
  4. Communicate digitally and securely with their prospective customers at every step of the onboarding journey
  5. Collaborate remotely as a team and automatically track every compliance decision in an immutable audit trail for full transparency

To learn more and see the power of our digital onboarding solution in action, please contact us here.