In Ukraine remote customer identification and the option to become a bank customer online has been officially in place since 2020, and at present nearly 40 banks out of 63 operating on the market have introduced the option to establish business relationship with the client using remote service channels. Although the service of card opening by new customers using mobile applications is extremely popular, both banks and customers continue to face challenges in the process.

 Challenges for banks:

 1. Potential customers loss and a significant number of rejections. In most cases, the process of opening a card online by new customers is automated and set up in a way that helps reject potential fraudsters or individuals that fail to meet the established criteria at the application stage. Somehow, this may result in the loss of potential  customers who accidentally fall into this "funnel" for various reasons. Therefore, one of the key challenges is to reduce the number of potential customer loss in the onboarding process.

 2. Attracting real customers and building long-term relationships. Establishing business relationships remotely makes it more difficult to identify customer needs and the true motives driving a customer to open a card or apply for other products.  As a result, choosing the right algorithm to meet the online customer needs for him/her to choose the bank for long-term cooperation becomes more complicated.

 3. Dynamic competitive environment. It is becoming increasingly difficult for banks to get potential customers interested in the bank products or surprise them.  On top of that, today's customers are quite demanding. They expect a personalized and convenient banking experience that meets their needs. Normally customers already have experience of opening a card online at other banks to be able to compare it.  They are also price-sensitive and look for the best deals, ready to easily switch banks if they are offered better rates or terms.

 4. Choosing a remote onboarding technology

Legislation provides for the use of a number of technologies in the process of establishing remote customer business relations, but it is important for the bank to implement a reliable and secure procedure meeting legal requirements, and at the same time to make it easy for the customer to understand and not make the digital adaptation complicated. In case the bank uses third-party technologies for face recognition, face matching, etc., the software should be regularly tested for vulnerabilities.

 Given that online fraud and cyber risks are constantly increasing, ongoing monitoring of new threats emerging in the process and their elimination constitute an important component of the secure onboarding process.

 Challenges for the client

 1. Imperfect UX. The client may fail to understand the application procedure, instructions on the screen to be followed can be missing or, ambiguous (in particular, to confirm the customer "reality", and liveness detection). The lack of option to contact the bank customer support during the application process can create a negative user experience and make a customer reluctant to continue the application process.

 2. The client fails to understand the terms of the product he/she is applying for. Normally, the customer can confirm that he/she has read the service terms and conditions, but there is still a risk that he/she will not scroll down to the end of the screen, open the attachment and read all the terms and conditions or understand them correctly. While if applying for the product at the bank branch, a manager can draw the customer's attention to certain rates/restrictions/warnings or answer the customer's questions. If applying online, the customer has to deal with it on his own and may only find out that the rates do not meet his expectations only when he/she starts using the product.

 So the online onboarding process must be permanently getting improved to be efficient. Banks that can successfully adapt to the changing customer expectations will be in the best position to attract new customers and keep them in years to come.