Digital onboarding for a regulated firm

Aug 29
3 min read

Updated: 2 days ago

Introduction

A client agrees to proceed. They are then sent a link to a portal requiring an account, an identity verification process that fails twice on their phone, a fact find of eleven pages, and three documents to print, sign and return.

Two weeks later nothing has been completed. They have not changed their mind about the advice; they have been defeated by the process. Regulated firms have genuine obligations at onboarding, and the question is not whether to meet them but whether the way they are met is losing clients who had already decided to proceed.

1. Digital onboarding for a regulated firm must satisfy the rules without defeating the client

Hold both requirements together.

Identity verification, suitability information and disclosures are not optional. How they are collected, in what order and with how much friction is entirely a design decision, and it is where firms differ enormously. Two firms with identical obligations can lose wildly different proportions of their clients.

2. Establish what is genuinely required

Separate obligation from habit.

Much of what firms collect at onboarding is accumulated practice rather than a requirement. Reviewing each item against what is actually needed usually removes a substantial part of the process.

3. Ask for information when it is needed

Not all at the start.

Anything required later can be collected later, when the client is already engaged. Front-loading every question produces an enormous first step at the point the client is least committed.

4. Make identity verification work on a phone

Where most abandonment occurs.

Camera-based verification that fails in poor light, requires a desktop, or rejects a valid document without explanation loses clients who cannot easily try again. Test it yourself on several devices rather than assuming the supplier has. Do it with an older phone and a passport that has seen some use.

5. Pre-fill everything you already know

An irritation that reads as incompetence.

A client who has just spent an hour with an adviser should not be asked for their date of birth again. Repetition suggests the firm is disorganised, at exactly the point it is asking for trust.

6. Explain why each piece of information is needed

Reduces resistance considerably.

A short note explaining that identity checks are a legal requirement, or that a particular question determines suitability, changes an intrusive form into a reasonable process. Clients comply more readily when they understand the reason.

7. Provide a human alternative

Do not exclude people.

Some clients cannot or will not use a portal, and in many practices they are the older and wealthier ones. A route involving a person, on paper or by telephone, should exist and be offered without implying difficulty.

8. Track where people stop

The measurement that fixes it.

Completion rates by stage, and the point at which clients abandon. Firms are frequently surprised to find one particular step responsible for most of the loss, and it is usually a specific technical failure rather than the length overall.

9. Keep the audit trail

Both a requirement and a protection.

What was collected, when, what the client saw and what they agreed to. This is straightforward when the process is designed with it in mind and difficult to reconstruct afterwards.

Follow up personally when somebody stalls. A short call asking whether they had any difficulty recovers a meaningful proportion of clients, and it identifies the specific problems in your process better than any amount of internal review.

Conclusion

Meet the regulatory obligations without designing a process that loses clients who already decided.

Establish what is genuinely required rather than what has accumulated, collect information at the point it is needed instead of all at once, test identity verification on real phones in real conditions, pre-fill everything you already hold, explain why each item is required, keep a human alternative available and offered, measure completion by stage to find the failure point, maintain the audit trail by design, and call anybody who stalls.