eKYC In ASEAN Insurance: Digital Onboarding Implementation

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The customer onboarding process is arguably the most important stage for every customer in the customer journey. It sets the tone for their entire experience with a product or service and is considered the pivotal point where lasting impressions are made. It is important to provide the essential guidance that they need and to ensure that customers feel valued from the very beginning.

In today’s fast-paced digital age, industries are continuously seeking ways to streamline and improve their operations. The insurance industry within South East Asia, for example, has always been traditionally viewed as slow-moving and paperwork-intensive. However, in recent years, insurance companies have adapted to and embraced digital technology to improve their processes. According to a report by EY, the Asia-Pacific insurance industry, which includes ASEAN countries, is riding a strong growth spurt, driven by factors such as intensifying regulations, economic uncertainty, and the rapidly expanding middle-class populations in the region.

eKYC is a revolutionary concept that blends the traditional KYC process with cutting-edge technology to make customer onboarding more efficient, convenient, and secure. It plays a crucial role in insurance, where customer trust and compliance with regulatory requirements are paramount.

How Does eKYC Work?

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eKYC is a digital process that leverages sophisticated techniques to verify the identity of insurance applicants. This process replaces the traditional paper-based KYC system, which involves customers providing physical documents to prove their identity. eKYC streamlines the onboarding process by allowing customers to submit their identification and other necessary documents electronically — via a mobile application or a web portal.

The eKYC process typically involves the following steps:

Document Upload: Customers are required to scan or take a photo of their identification documents, such as their passport or driver’s license.

Facial Recognition: Most eKYC solutions utilise biometric verification technology, such as facial recognition technology to match the image on the ID document with a selfie taken by the customer.

Verification: The uploaded documents are verified against the information in government databases or other trusted sources to confirm the customer’s identity.

Consent: The customer provides consent for the insurance company to access their personal information for onboarding.

Instant Approval: The customer’s application can be approved almost instantly once the eKYC process has been completed. This is a big step up in reducing onboarding times.

What Are The Benefits Of eKYC Implementation In Insurance Onboarding Processes?

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From speeding up the onboarding process to bolstering the security of online transactions, eKYC is undoubtedly a game-changer for the insurance industry. The adoption of eKYC offers a range of benefits that include:

1. Speed and Convenience: eKYC eliminates the need for physical document submission, reducing the onboarding process from days to minutes. Customers can apply for insurance from the comfort of their homes or on the go, simplifying the experience.

2. Enhanced Security: The technology used in eKYC helps to minimise the risk of fraud. Biometric data and document verification make it difficult for individuals to impersonate others, enhancing the overall security of the onboarding process.

3. Regulatory Compliance: Insurance companies must comply with strict regulations related to customer verification. eKYC systems often incorporate these regulations to ensure that companies remain compliant with the law.

4. Cost Reduction: The automation of the KYC process reduces the cost of manual document verification and data entry for insurance companies.

5. Improved Customer Experience: Simplified onboarding and faster approval processes lead to a more pleasant customer experience. This, in turn, can improve customer retention rates.

The adoption of eKYC in ASEAN countries is driven by a combination of factors, including regulatory compliance, technological advancement, and the desire to improve customer experience. This adoption trend is expected to continue as the region’s digital economy and financial services sector continues to grow.

What Are The Challenges Of eKYC Implementation For The ASEAN Insurance Industry?

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While eKYC offers a plethora of benefits, there are also challenges that insurance companies need to address when implementing it:

1. Data Security: Handling sensitive customer data comes with the heavy responsibility of safeguarding it. Insurance companies must invest in effective cybersecurity measures to prevent customer information from falling into the wrong hands.

2. Customer Education: Some customers may be unfamiliar with the eKYC process, and educating them on how to use it effectively can be a challenge in most cases. This is particularly relevant to customers from more rural areas, with little to no access to the internet.

3. Lack of Internet Reach: In 2019, Thailand, Myanmar, and Vietnam had less than 60% internet penetration, with 57%, 39%, and 38% respectively. This can pose a challenge for insurance companies to extend their reach to these areas with lesser internet penetration as most eKYC solutions require internet access to conduct the digital onboarding process.

4. Regulatory Variations: Each ASEAN country has its unique regulatory environment, which can pose challenges for the implementation of eKYC solutions. Companies need to carefully consider the regulatory barriers and take appropriate steps to address them to successfully implement this technology.

5. Technological Infrastructure: Adopting eKYC may require significant technological upgrades and investments.

6. Cost of Implementation: The cost of implementing eKYC, including technology investment, training, and compliance, can be a barrier for some insurance companies, especially smaller firms.

Bottom Line

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The implementation of eKYC in the ASEAN insurance sector marks a significant shift in the industry and it reflects the digital transformation taking place across sectors worldwide. With its speed, convenience, and enhanced security, eKYC is a win-win for both insurance companies and their customers.

As technology continues to advance, we can expect eKYC to become an integral part of insurance onboarding processes in improving efficiency and customer satisfaction. However, it’s crucial that insurance companies carefully consider the security and privacy aspects of implementing eKYC to ensure that customer data remains protected. Ultimately, eKYC is not just a step forward; it’s a culmination of all the past techniques used to verify a customer’s identity.

Consumers today demand convenience and seamless transactions that align with their busy and fast-paced lifestyles. Innov8tif aims to empower the insurance industry with the tools needed to keep up with this rising demand. Gone are the days of tedious and length-worthy onboarding processes, our proprietary EMAS eKYC solution is designed to streamline customer onboarding, offering a swift and user-friendly experience.

With EMAS eKYC, insurance companies can bid farewell to paperwork hassles.

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