Customer Onboarding in Russia during a Global Pandemic
Updated: Oct 7
The COVID-19 pandemic has changed people’s lives within a span of a few months. The world is now living in a “new normal” where social distancing and practicing hygiene protocols are now habitual. How businesses conduct their operations have also changed. Apart from simply adhering to the stipulated governmental directives, services offered by businesses that could afford the transition to digital have been immediately transformed to keep up with the disruptions caused by the pandemic. One such industry that has undergone this type of change is banking.
The shift to digital for some financial institutions started over a decade ago, but the pandemic has now hastened the acute need to speed up the effort to digitize. Now is the time! Financial Institutions must work to recalibrate their processes to keep up with changes in the way we live and the way we work. During this pandemic, when the lockdowns were imposed to curb the spread of COVID-19, even customers who were hesitant about online banking in the past have changed their minds. This phenomenon has impacted customer behavior and customer need, which has inevitably led to an unprecedented rise in online banking and a proportionate decline in trips to bank branches. Customers started relying on digitally-enabled financial services.
For customers seeking banking products and services, one remote service that is greatly required is Customer Onboarding. The service opens the customer to a plethora of services offered through the Financial Institution’s digital banking platform. Traditional in-person onboarding is a tedious process that requires the customer to go to a bank branch and present numerous documents before successfully opening an account.
With the implementation of stringent social distancing and health directives that is expected to continue till a vaccine is found, remote customer onboarding is just one of the digital solutions that have helped manage the new normal resulting from the COVID-19 pandemic but is a critical step for both the customer and the bank.
Customer Onboarding in Russia
In Russia, opening a bank account with a full set of financial services requires a customer to submit a passport. These are mostly presented in-branch, where an onboarding customer also provides their signature to complete their account activation. The process of client onboarding is strictly regulated by 115-FZ (Federal law #115) which requires personal presence in the branch. Nearly all banks in Russia now use agents’ models when personal presence is replaced by a personal meeting with a bank’s agent to see the client in-person instead.
This exemplifies the tedious process of traditional onboarding as it requires numerous KYC documents and face to face verification. However, in response to the social distancing requirements and restriction on movement due to the COVID-19 pandemic, the Central Bank of Russia endorsed banks to temporarily allow banks to open bank accounts remotely with simpler document and verification requirements.
One bank that offers digital onboarding is Moscow-based Tinkoff Bank. As a financial institution that only offers its services online, they were already prepared to respond to the repercussions of COVID-19. The CEO of Tinkoff said that the company thrived under Russia’s lockdown because online is their natural home. Tinkoff Bank onboarded a million new customers in the first few months of the year and that number is continuously going up.
According to the Chief Analyst at Sberbank, Russia’s largest bank network, customer behavior changed during the pandemic and people are visiting banks less often. With such recognition, the Central Bank of Russia has relaxed its regulation on account opening requirements in order that the opening of accounts will continue even with the global pandemic and beyond. Instead of presenting numerous paper documents as proof of identity, customers can verify their identity via eKYC (electronic Know Your Customer). The use of biometric data should be normalized to ensure that there would be far greater adoption of digital financial services.
While most Russia’s banking sector has responded well to the pandemic, these can be attributed to digital systems already in place even before COVID-19 hit. Those who have relied on traditional banking set up are catching up by partnering with FinTech companies like Bank-Genie that provides digital solutions to banks. Bank-Genie has a full suite of products to ensure that banking remains uninterrupted in the midst of a global pandemic.
Bank-Genie Pte. Ltd. is a Singapore-based company incorporated in 2016. For banks and financial institutions who are driving towards digital transformation, Bank-Genie is a future-focused technology partner that helps enrichen the banking experience.
Bank-Genie has a proven record across markets of Asia and Africa with its Interceptive Banking Technology. Bank-Genie Pte Ltd is funded by SBI Ven Capital Pte Ltd and FMO, the Dutch Development Bank.