James Bruni, Managing Director, GBG IDology, an industry leader in identity verification, AML/KYC compliance & fraud protection solutions.
In a digital-first, contactless world, access to financial services is essential for building wealth, fostering economic independence and creating financial security. Many established customers of businesses and users of credit cards and bank accounts benefit from these services’ convenience, flexibility and wealth-creation opportunities. However, access to financial services remains frustratingly out of reach for 1.4 billion people globally and 6 million people in the U.S. There are many reasons, including a lack of trust in financial institutions, financial literacy gaps and technological barriers.
Too often, the barrier to access is frustratingly simple. They can’t make it past the proverbial front door, prevented from enrolling in financial services because they are nontraditional or thin-file customers, lacking the traditional credit history or documentation required by most institutions.
Fortunately, as 2025 kicks off, this is a solvable problem.
A data-driven, intelligent onboarding approach can help financial institutions maximize revenue potential while maximizing access to critical financial services to the most people possible.
Here are three best practices for onboarding more customers accurately and cost-effectively to build loyalty and drive revenue from the first touch point.
1. Combine the strengths of public and proprietary data.
Like most online activities, opening a financial services account starts with an application. The process is relatively simple. Potential customers complete online forms with relevant personal information and hit submit. That’s when the real challenge begins.
Financial service providers face strict regulatory requirements and operational mandates to verify potential customer identities and evaluate their risk profiles. It’s a data-driven endeavor that financial services providers are well-positioned to pursue.
However, credit bureau reports alone don’t provide enough information to verify potential customers’ identities. Financial service providers and their partners should also leverage customer data that allows them to analyze behavior, manage risks and personalize services. They can do so by coupling proprietary datasets with publicly available customer data, efficiently and securely onboarding unbanked customers.
This allows financial services providers to match the most up-to-date address details, along with precise birthdate and full Social Security number (SSN) information, which involves using advanced data sources beyond what is available through public records alone.
For instance, according to the most recent GBG IDology Global Fraud Report, 81% of companies believe that cross-sector intelligence sharing and collaboration can be a strategic differentiator that allows them to more effectively combat fraud.
Organizations gain a strategic advantage by using real-time intelligence across industries to counter changing fraud tactics and enhance the precision of their decision-making processes.
2. Create a robust defense against synthetic identities.
The rapid rise and distribution of frontier generative artificial intelligence (GenAI) models have made familiar fraud types even more pernicious and problematic. The Global Fraud Report notes that executives across industries consider GenAI the most significant fraud threat of the next several years. Specifically, 74% of executives are worried that synthetic identity fraud (SIF) will make phishing or smishing attacks more prevalent.
SIF occurs when fraudsters create fake identities by combining real and fabricated personal information. They use these identities to open accounts, secure loans or commit other financial crimes without immediate detection.
Already, billions of phishing emails are sent daily. GenAI technologies can make these emails or SMS messages more persuasive and effective, convincing unsuspecting recipients to click on links to websites containing malware.
To create a robust defense against SIF, financial service leaders must:
• Leverage advanced identity verification solutions.
• Deploy multilayered fraud detection systems.
• Educate customers on the latest fraud trends.
• Invest in AI and machine learning technologies that detect fraud.
3. Streamline the onboarding experience without compromising security.
When onboarding new customers, especially data-thin unbanked customers, financial services providers must balance security with convenience.
After all, if the onboarding process is too cumbersome, potential customers are prone to walk away, diminishing opportunities for everyone. On the other hand, if onboarding processes are too permissive, they amplify fraud risk, which is bad for customers and companies.
To engage younger customers, mitigate fraud and reduce friction, leverage familiar authentication solutions, like biometric-based authentication. Remember that, in contrast, older customers are likely to embrace provided security settings and trust financial institutions more when they are required to provide proof of their identity.
Simply put, financial institutions must understand consumer preferences for security and digital engagement. It’s one of the best ways to anticipate the fraud attempts most likely to impact their experience while meeting their expectations for security and convenience.
Financial Access For Everyone
Every person deserves access to digital financial services. It’s critical to provide equitable access to the financial tools and services that allow everyone to build wealth, establish financial security and participate fully in the modern digital economy.
For financial institutions, the benefits of a better, more streamlined onboarding process are evident: They can acquire more customers faster and with less risk.
Put differently, intelligent onboarding can enable financial service providers to reach thin-file and difficult-to-identify demographics while reducing dropout rates. It’s a win-win-win for financial institutions, their customers and their communities.
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