One of the fastest growing banks in Uganda implements digital KYC and customer onboarding to acquire 20% more clients

About the bank

The bank is one of the fastest growing banks in Uganda, with a wide network of 51 branches and 50+ ATMs spread across the country serving over 1,800,000 customers and growing.

To stimulate its digital transformation, this Bank has deployed a number of Alternate Business Channels to enhance its product and service delivery and make them more digital and data-ready. These channels include: Internet Banking, a mobile banking service, Point of Sales (POS) machines as well as partnerships with major telecom companies.

Challenge

Paper-based KYC verification created hurdles for new customers and raised the risk of identity fraud

In the past, the bank was only using a paper-based account opening process. Customers needed to fill up a tedious form with pen and ink. They also needed to carry their identity documents to the nearest branch to have them manually verified by bank staff for KYC. 

Even though the bank was using Voter ID details provided by the Ministry of Internal Affairs of Uganda, the data was not up to date and the bank could not  reliably know whether the ID was fraudulent or not. The customers had to wait until the process was completed before they could transact on the account. 

The process of manual identity verification for KYC was slow, cumbersome and used up significant bank resources. It was a poor experience for customers, but it was equally inefficient for this bank. 

Solution

Automate customer onboarding with Laboremus’ infrastructure deployed on website and USSD

The bank started their search for the right infrastructure partner for digital KYC and identity verification. As a member of Uganda Bankers' Association (UBA), it could implement the ID verification infrastructure that Laboremus developed for UBA, based upon a contract with UBA, Bank of Uganda (BoU) and National Identification & Registration Authority (NIRA).

Laboremus was the only solution that fit their requirements providing the right technology and identity verification data directly from NIRA. For simplicity, the bank decided to break up the implementation into two phases. 

In phase 1, this bank used Laboremus’ web portal to verify national IDs. Using this web portal, the staff at any bank branch could validate the identity of new customers instantly by simply entering their details into their systems. The portal was a successful project for the bank to build confidence on the reliability and speed of Laboremus’ digital KYC infrastructure and identity verification. 

In Phase 2, after the success of the KYC portal, the bank leveraged Laboremus’ API to enable account opening via USSD sent from mobile phones - smartphones or basic phones. 

Customers provided their KYC information digitally, had their identity instantly verified, and started using the new account right away. However, as the USSD format is limited in the type of identity information it can capture, these light accounts had limits on withdrawals and deposits. The bank could easily capture identity card number, full name, addresses, occupation and employment details with USSD. 

Afterwards customers completed their KYC process by providing their picture, next of kin info and other details to the bank. Bank employees upload this additional info to the web portal to complete the full KYC. 

As USSD works with basically any phone with a cell connection, this light KYC process enables the bank to onboard a whole new segment of the market that didn’t have access to other channels. This brought down the time for KYC verification from days to just minutes. 

This fast-growing bank today uses Laboremus’ identity verification infrastructure to offer account opening via USSD 24 hours a day, 7 days a week. 

Impact

20% increase in new customer acquisition and faster turnaround for opening new bank accounts

Faster customer onboarding

The automated digital KYC process made customer onboarding and account opening easier and increased the number of customers for the bank. The speed and ease of use has led to an increase of 20% in new customer acquisition by the bank. The turnaround time to open new KYC-verified accounts is now less than a minute.

Improved operational efficiency 

Using a rapid account opening process, this bank saves a ton of effort and resources. These resources are now used for other more important aspects of the business. With fewer paper forms and reduced data entering, the overall efficiency and efficacy of the process has also improved. The bank is using these enhanced processes to move into a new age of digital transformation. 

Created a superior customer experience

More importantly, the new process delivers a vastly improved experience as customers can start transacting on the new account within minutes. Better customer experience has led to wider reach and 20% new customers. People with limited access to branches and online banking can still open an account with the bank using the USSD process. With instant access to banking services, the bank can also better position the full suite of banking and credit services to this new audience. 

Built a secure, fraud-resistant infrastructure

Using Laboremus’ API for ID verification, this bank provides customers an alternative channel to open new accounts. Implementation of USSD functionality was only possible after a reliable, error-proof, fraud-resistant Identity Verification process. 

To reduce the risk of fraud, the leadership team of the bank desired a high-quality solution to verify data from NIRA. 

Future outlook

Further reduce the risk of fraud and enhance the customer experience with more digital-first processes

Laboremus’ Digital identity verification and customer onboarding has allowed the bank to create more ambitious plans for the future. 

The biggest next step is to roll out account opening via agents and integrate Laboremus’ ID verification solution with their mobile application for agents. 

This would further enhance the speed and access of opening new bank accounts empowering the bank to acquire more customers and provide them new financial services and credit solutions.