We have delivered a number of pan-European projects for SMB acquirers in recent times, and with the Adyen Yapily announcement this week, we thought it a good moment to get our thoughts on OB and onboarding on paper.  Let’s be honest, onboarding new customers can be a nightmare. SMBs are often burdened with long waits, endless form-filling, and document uploads to meet opaque and apparently arbitrary PSP KYC requirement. However we increasingly find Account Information Services (AIS) being used to verify identities and accounts more quickly, and accurately, than current alternatives. 

AIS allows businesses to securely access bank-verified immutable financial data in real-time, with customer consent. This is strongly preferable for both PSPs and merchants to manually upload bank statements, identity documents, or utility bills which is cumbersome, difficult to programmatically review, and subject to manipulation.  

In the UK, 86% of customers open accounts digitally, a dramatic increase from 50% pre-COVID. However, many of these processes still involve manual back-office checks, slowing things down and still requiring some level of eyeballing, making onboarding expensively and slow. 

Adyen, and Yapily’s recent press coverage reflects the former’s investment in their SMB onboarding processes to keep up with market demands from both merchants and their competitors. We are now seeing a strong set of reasons to jump on the OB AIS band wagon now the product is more nature. 

Here’s a handy summary of some of 10 key elements driving our client’s ROI for investing in AIS during onboarding:  

1. Accelerated Onboarding

AIS allows SMBs to retrieve verified financial data instantly. A number of  fintechs using AIS have reported reducing their onboarding times by over 80% compared to legacy systems.

2. Lower Application Drop-Out

AIS removes lengthy form completion and makes the process smoother, leading to fewer abandoned applications. As the customer is in session, issues can be addressed immediately, rather than resorting to call-backs/emails. 

3. Improved Data Accuracy & Recency

Manual data entry by customers is prone to errors while AIS data is immutable, and up to date. It is also impossible for customers to “tweak” data before submission.

4. Better Compliance and Reduced Fraud Risks

AIS is typically not regarded as sufficient for full KYC, but can provide evidence of source of funds and control over bank accounts when combined with PIS. When combined with other digital ID processes this can produce high confidence KYC outcomes. 

5. Cost Savings

More reliable, machine-readable data, enables fully automation of a greater proportion of applications and reduces the need for slow and expensive manual review. Headcount can therefore be re-focussed towards higher value customer interactions or more complex/larger customers. 

6. Increased Through-Put 

Removing manual review teams increases overall throughput by removing bottle necks. These processes are also easier to scale to new markets where AIS increasingly common. 

7. Consent

Customers have to provide consent for AIS calls, so there is clear evidence that they are in session. This can be used alongside digital signature processes to increase confidence in consent processes, and reduce the risks of disputes. 

8. Auditability

It is much easier to audit this process as part of compliance reviews than manual alternatives as processes follow a standard form and can be consistent across multiple countries/use cases

9. Data Security 

Data collected during an AIS can be fully controlled and encrypted from the outset. This makes GDPR processes much tighter and reduces the risk of handling unnecessary sensitive data. 

10. Ongoing Validation

As the world moves towards continuous KYC, getting customer used to re-submitted information via AIS can significant increase ingoing data quality and reduce compliance costs 

The biggest issue with AIS is now is patchy quality and availability. Even in the EU we are going to have to wait for PSD3 before we get improved consistency, so there is still plenty of room to optimise these processes in the coming years