Digital Onboarding & Payment Security - The Next Frontier

Posted on April 27, 2022

Next year Canada will usher in the start of an Open Banking era. While Open Banking is a relatively new concept for North Americans, society can expect to reap the benefits of this new concept. In other words, if Canada does it right, it will improve the lives of Canadians across the board. A digital onboarding and payment revolution is already happening with the added security in tokens, consent and privacy, and transparency.

With this in mind, our latest article explores the digital onboarding and payment security landscape. What happens at the intersection of data privacy, payment security, and Open Banking?

“Onboarding, data privacy and security are the three pillars that will allow open banking to continue to change the world."

Zac Cohen Trulioo

What is digital onboarding? 

Digital onboarding is the automated process of introducing new customers into the system and giving them access to an establishment’s products, services, and facilities. In theory, it should look completely opposite to the traditional in-person methods of the past. Digital onboarding should be faster and simpler. During this onboarding sign-up process, users provide their personal data and information, not to mention their trust to a company.

Seeing that it is digital, the goal should be an easy, user-friendly process. And yet more often than not, it isn’t. Customer onboarding is challenging and time-consuming. Digital identity company Signicat found that 68% of consumers abandoned their financial applications, up from 63% in 2020 and 38% in 2019.

Digital Onboarding and Payment Security

Moreover, they report that close to 30% found the application process overly complicated.

The likes of Amazon, Apple, and Google have set the stage for what people think seamless onboarding should look like. And clearly, many businesses don’t seem to be succeeding at it.

Did you know? According to ThePaypers, when consumers find the process of acquiring a financial product complicated, they will abandon ship at 18 minutes and 53 seconds in. This is a full 7 minutes quicker than the year before.  

Digital Onboarding and Payment Security

On the plus side, the Fintech space and financial sector are embracing (with open arms) open banking and digital solutions that will help solve the tedious barriers of onboarding. As a result, all involved can expect to benefit from a completely digital process tailored for easy data input and less manual processes.

Digital Onboarding and Payment Security

Protecting data privacy and security

The same study discussed above found a whopping 92% of consumers are concerned about how financial service providers are using and taking care of the data they provide during the onboarding process. This is the most compelling evidence, indicating that businesses need to take notice. 

Data privacy versus security  

It is important to note that while these terms are sometimes used interchangeably, they are different.

Data privacy revolves around the processing, storing and usage of personal information. In contrast, data security protects personal data from unauthorized third-party access, malicious attacks, and data exploitation. It is set up to protect personal data using different methods and techniques to ensure data privacy.

The value of data IRL (in real life)

More data empowers businesses to deliver enhanced value. Add in the context of financial data, and we can expect businesses and consumers alike to win big. 

It is not just a one-way street. Open Banking facilitates a bi-directional flow of data. As merchants gain better access to data, they can start to target solutions to address the consumer’s needs. 

At the same time, Open Banking empowers customers, putting them in the driver's seat and allows them to say  “this is what I want you to see, & this is what I don't want you to see.”


Digital onboarding and payment security: Gaining customer trust 

Winning consumer trust will be the most significant barrier to growth. According to The 2021 Identity Fraud Study, 71% of people cite security as the most important consideration when opening a new account. 

That means it is up to each company to show their customers that their data is safe. Customers need to know that their security is of the utmost importance to the company. It’s more than following the basic guidelines for digital security—it’s proving to the customer that it matters.

Ways to gain and keep customer’s trust

☑️Educate customers on security protocol and best practices
☑️Emphasize security at every opportunity (via company reports, webinars and emails)
☑️Be a leader in the Fintech space on customer security
☑️Ensure consistent due diligence and open communication
☑️Speak with customers about potential concerns (via surveys, phone calls and emails)
☑️Be transparent and have open communication with customers to express any concerns they may have

Digital onboarding and payment security win with Open Banking

Open Banking solutions provide various opportunities. For example, they make the onboarding process smarter by allowing the KYC process to be completed faster. And they bring added security by replacing sharing credentials (such as username and password) with anonymized, single-use digital tokens. Consequently, this protects the user's data from any third party or anyone attempting to breach security.

How? MX sums it up nicely: Tokens de-identify user data, which dramatically increases the chances that personal data will not be subject to risk. 

Maximizing payment security with a 100% paperless and mobile-first experience

Whether payment security or data privacy, we have you covered. With VoPay's iQ11 solution, all transactions sit at bank-level security. Tokenized transactions; each time a user initiates a payment, the merchant returns a VoPay generated token. We validate and authenticate the bank account information and financial data instantly at the time of the transaction.

And unlike traditional bank account payments, no bank account details are ever visible. With VoPay Risk Intelligence, our solution proactively prevents payment fraud, eliminates chargebacks and automatically accepts more payments. Automating the whole process eliminates manual review and increases insight into your business. Scale rapidly without friction, and know your good users with confidence.

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