Guide to Creating a Digital Account Opening (DAO) System
Hello readers! Tell me the truth, apart from subscribing to this blog are you gathering your quota of technical knowledge from any other websites as well? Or Do you just skim through this blog and then Netflix and chill instead of reading the articles thoroughly on this website?
Fret not, I’m not here for any kind of inspection or inquiry. The reason I’m talking about consuming content whether it is from this website or from any other source is that you might have signed up for it before. Right?
Even to be on social media or use shopping services from Amazon or cab services from Uber, you have to sign up for their services first. Right?
So far so good?
Well, the point I’m trying to make here is that no matter what service or content consumption you sign up for, you are filling out a form for it first. And that is one kind of Digital Account Opening System. You are opening your digital account in their web servers to get their services just as you open an accountant at a bank to get financial services. Your information is stored with them and afterward whatever transactions you make in terms of buying any services or consuming any content, all of it is recorded on your digital account in their servers.
That’s how businesses are able to offer personalized services nowadays. The same is true for the financial sector. With the help of a financial software development company, a fintech business can now successfully provide their customers with seamless user experience right from customer acquisition and on boarding to the after-services for every product or service they have bought from the organization.
Now, fintech companies use digital account opening systems to stay connected with their customers so that they can offer better-personalized services. If you aren’t familiar with this concept in depth then read this blog carefully because we are also going to discuss how you can imply such a system to your business too.
What is a digital account opening?
Digital account opening is a process that involves creating an invoice from an existing order, which is then sent to a customer’s email address or mobile phone number.
The process of digital account opening is one of the easiest ways to get customers on your platform and build trust with them. It also increases conversion rates for your business because it provides a better experience for both the customer and yourself as an e-commerce store owner.
Digital account opening is a process that allows you to do business with your customers online. It also allows you to track and manage all types of customer interactions in real time and the best thing is that you can automate the whole process.
How to design an effective digital account opening process
Capture basic customer data
Creating a DAO system is not something you want to rush. It’s a long-term investment, and you’ll need to take the time to understand your customers, their needs, and how they will interact with your products or services.
The first step in designing your DAO system is capturing basic customer data. The basic data includes demographic information like age, gender, location, contact information (e-mail addresses, phone numbers), and more. Meanwhile, if it is relevant to your business, you can ask for account information (credentials and history), income level, and transaction information (purchase history).
Once you have this information captured, you’ll need to analyze it to determine what kind of product or service offerings make sense for your company. You might find that some of your products or services are more appealing to customers than others. For example, if you are selling clothes, you might find out that women tend to purchase more clothes in comparison to men per year.
To verify the identity of your customer, you’ll have to ask them to provide some proof of who they are. You can ask for this information as part of the application process and then use it to confirm your identity.
You may also ask them for information that can help you verify their identities, such as a selfie, verification code via a phone number or email, copy of a government-issued photo ID (such as a driver’s license or passport), or bank statement.
You can also create a unique customer ID for each customer in your system. Creating customer IDs is easy because you can use their email addresses as the basis for their IDs. If you have a customer who has multiple accounts, you can create a unique ID for each account and associate that with the email address of that account.
When you verify customer IDs, you’ll be able to see which customers are already members of your DAO system and which ones aren’t. You can then provide these non-members with an invitation to join by sending them an email message or website link to create their DAO account.
Instantly create an account
Once the customer provides all the necessary details to open the digital account, you must immediately provide them with the mobile banking login credentials. This will allow them to instantly access their accounts via mobile devices.
Instant account opening is a way how banks nowadays are managing to attract more and more customers. A simple KYC policy and a secure payment gateway see to it that the customer gets better financial services in the new digital era.
Customer due diligence
Customer due diligence is an important step in the account opening process. If a customer is found to be fraudulent, it can cost your business time and money to recover from the loss.
To minimize this risk, you should perform customer due diligence on all new customers before they open an account. This includes researching their credit history and performing various checks on their identity.
Customer due diligence is the process of determining if an applicant qualifies for a loan, credit card account, or insurance contract. This includes verifying income, employment, assets, and other relevant information.
Customer due diligence is key to making sure that you are creating a solution that will work for your customers and meet their needs.
Final account approval
The final step before opening an account is to send your client a final approval. There are two ways to do this – in person or by email.
In-person: This is the best way to make sure your client understands the process and knows exactly what’s about to happen. You can also use this opportunity for some last-minute tweaks — like ensuring that your client has read all the documents, and confirming that they understand everything you’ve explained so far.
By email: This is a quick and easy way to approve accounts, and it’s also a good idea if you’re working with multiple clients at once or want to speed up the process as much as possible.
Additional compliance will be required in special cases like making large deposits, unusual cross-border transfers, and more. You can develop your customized KYC policies to determine how additional compliance will be done. You can base them on the following –
- Local compliance needs
- Type of occupation
- Type of income
- Spending patterns
These factors will help you gather the necessary data for additional compliance that is needed in special cases.
There just doesn’t seem to be any choice for businesses, they have to go digital. And Digital Account Opening is the first step to digitally transforming your core business.
No one now wants to wait 3-4 days for opening an account at any bank, they want their accounts to open and transactions to happen in an instant including the KYC verification procedures. If you are slow then the customers won’t hesitate to switch to your competitors’ services if they allow them to open an account and avail of services in fewer taps. Now, it’s up to you what you want.
Do you want to gather information about your customers and create a strong customer base or just do business with a bunch of strangers whom you do not know anything about?
We have already gone through one of the simplest DAO systems from both your business’s and your customer’s perspective. If it all seems more complicated to you or you do not have the right technical knowledge to pull this off then I suggest you collaborate with a developer or hire someone who has the necessary skills for the job. And then you can focus on your core KPIs.
Tell me now, how good does it seem? You can take ideas from the DAO systems of other businesses’ and NGOs’ websites if you want. If you have any queries, ask them in the comments section below. Also, if this article has been of any help to you, feel free to share your feedback as well.
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Thanks for reading!