Reinventing business onboarding for financial services
Onboarding business clients is a major challenge for financial institutions. The automated verification technology that’s ubiquitous in retail services is non-existent in business services. This forces Financial Institutions (FIs) to rely on arduous and unscalable manual processes to verify businesses. It's inefficient, costly and delays time to revenue for both the FI and the businesses themselves.
TrueBiz solves that problem. We streamline document processing during Know Your Business (KYB) to help FIs get new businesses on the books, and those new businesses to market faster. Here’s how, why – and what’s next.
Why is it so difficult to onboard new business clients in financial services?
Building a business doesn’t happen overnight. It takes a long time to build a product, find an audience, hire a team, scale and iterate.
The part that should happen overnight? Opening a bank account.
But it doesn’t. It’s Day One stuff: businesses can’t buy, sell or pay staff without a bank account. And yet the process takes – in many instances – up to 10 days. That’s if businesses are opening accounts with nimble fintechs. If they’re working with traditional banks, it’s more like 10 weeks. That makes the process of building a business a lot longer and harder than it needs to be.
It’s a problem for everyone – not just in banking. During the pandemic, entrepreneurs started new businesses in record-breaking numbers. 4.4 million new businesses were created in the U.S. during 2020 – 51% higher than the 2010-19 average. Those businesses are vital to the recovery of the economy, but many of them are falling at the first hurdle. FIs simply can’t onboard them fast enough.
The current system is deeply flawed. In order to prove they’re legitimate, companies have to answer a barrage of questions about their business and themselves, find and upload different documents, and then wait indefinitely for them to be verified.
It doesn’t have to be like this. I know: after 6 years at Onfido, a global leader in consumer identity verification technology, I’ve seen firsthand how slick document capture and verification can be for retail clients. What I also saw during that time was FIs pleading for a similar solution to onboard business clients. Until today, none existed.
The challenge of onboarding business clients
There are a few reasons that verifying and onboarding business clients is so complex.
Individuals are easier. People are born, registered, and then have 18 years to drop digital breadcrumbs about their identity all over the internet before they try to access financial services. By then, there are plenty of signals FIs can rely on to prove that they are who they claim to be.
That’s not the case for businesses. Businesses usually require access to a financial service as soon as they’re incorporated. There is no breadcrumb trail, so FIs often have to rely on paperwork alone.
That, too, is a problem. There’s no central, trusted database of businesses and ownership information. Government Registry databases can fill in some of the gaps, but not all of them. Regulators don’t allow FIs to depend solely on these databases for their KYB checks for the very reason that the information on there isn’t verified. It’s also not complete. In some jurisdictions it can take months for new businesses to be added to databases, slowing the process even more.
Instead, FIs have to ask clients to provide information themselves. Unsurprisingly, this is a far-from-perfect solution. It’s burdensome for businesses and the result is that FIs almost never receive a complete, correct set of documents and data on the first time of asking. The back-and-forth that inevitably ensues between the two parties can be extremely time consuming.
Once the data capture stage is complete, the information provided still needs to be reviewed. Different jurisdictions require different degrees of due diligence and classify businesses in different ways, so it’s hard to fully automate. Business document validation usually falls back to manual review. This means that FIs have to hire teams of analysts and underwriters to comb through data and documents, and try to build confidence that businesses are legitimate.
The process is slow, manual and inconsistent at catching the things that it should.
Financial institutions need a better way to onboard businesses
This process is a huge headache for the people working at FIs that are trying to serve business clients in compliant and efficient ways.
- Product and Marketing can’t grow the number of new businesses they’re onboarding because of bottlenecks in the due diligence process.
- Risk, Underwriting and Compliance waste the valuable time of their human analysts verifying company documents – time that could be spent on more strategic work.
- Operations can’t scale their manual processes enough to keep up with fast growth.
Poor processes around business document verification interrupts onboarding, and that leaves money sitting on the table for FIs. Throwing more staff at these issues won’t solve the problem: linear hiring can’t keep up with businesses that are growing exponentially.
TrueBiz unlocks the data in company documents to efficiently onboard businesses
Enter TrueBiz. We’ve reinvented the way FIs process company documents, like Articles of Incorporation and 50+ others, so it takes seconds to process – not days. It means FIs can meet their KYB requirements more easily, proving businesses are real, and who the owners and directors are.
There are 3 simple steps:
- Classification: We classify the document type upfront, so FIs can instantly inform customers if they’ve uploaded the wrong document.
- Extraction and Comparison: We compare the information the business has provided against the document submitted, and return the key data points.
- Validation: We give FIs confidence that the document is legitimate and the data it contains is consistent with other sources.
TrueBiz makes it easier than ever for legitimate businesses to access financial services. By helping FIs optimize the way they process documents during registration, they can:
Speed up time to activation: TrueBiz validates documents in seconds, preventing a slow back-and-forth to capture the correct paperwork. This can shave days off revenue realization.
Reduce manual review: TrueBiz helps identify the key 10% of cases that actually need further attention, so FIs can redeploy the majority of their analysts’ time and skill elsewhere.
Scale: Truebiz removes friction from the onboarding process, so FIs can grow faster – and help businesses to do the same.
What’s next for TrueBiz?
Our company is still young, but we’re already excited by the impact TrueBiz is having for our growing community of clients.
Next, we’ll be focusing on adding support for a broader range of formation and shareholder documents across the USA and internationally.
We’ll be expanding our team, too. Our people are tenacious, talented and driven to reinvent company due diligence for clients at the forefront of innovation in financial services.
If you’re interested in working for us or with us, get in touch.