Reducing Onboarding Costs in Cryptocurrency
March 18, 2021
Customer acquisition costs are among the most valuable metrics for all businesses and keeping them low is paramount to overall profit margins.
So in an increasingly competitive crypto space, onboarding customers as quickly and efficiently as possible while reducing acquisition costs is key to survival.
Below is a list of all the topics we will cover in this article. Go ahead and click on any of these links, and you’ll be taken to that specific section.
The World of Cryptocurrency
Cryptocurrency has long been a volatile market, with rises and falls of 40% or more in a matter of days not uncommon. It has been seen as an alternative to traditional (fiat) currency, so when investors lose their confidence in a fiat currency because of economic or political events, they can turn to Bitcoin or its rivals, pushing up the price.
However, cryptocurrencies’ value has been on an upward trajectory for some time now and many currencies such as Bitcoin have recently hit their highest ever value, helping some savvy investors capitalise on massive gains.
Onboarding Cryptocurrency Customers
When markets experience price hikes of the like we’ve seen recently, investors want instant access to be able to buy and sell through exchanges. Onboarding means taking these potential customers and turning them into active users of a product or service.
Although growing, cryptocurrency is still seen as a somewhat volatile market and cautious investors want to make sure the exchange and wallet they use is secure and legitimate. There are hundreds of cryptocurrency exchanges available to prospective investors, so how do you set yourself apart in an increasingly competitive market?
1. Maintain Regulatory Compliance
One thing you can count on in the world of crypto compliance and regulation is how unpredictable it is. Anti-money laundering regulations are changing all the time and businesses dealing in crypto assets must be prepared to move swiftly, adopt new standards, and protect their business from regulatory scrutiny.
Customer due diligence (CDD) should be performed by exchanges regardless of whether regulations are applicable to ensure customers are who they’re claiming to be. Illicit activity and money laundering has been steadily increasing in cryptocurrency as we investigated recently.
Employing robust and efficient AML & KYC checks not only helps maintain regulatory compliance, but instills customer confidence in your business and its level of security. The initial interactions a new customer has with your business set the tone for the entire relationship; the likelihood of a customer sticking with you (and recommending you to others) increases with the level of emphasis you put on creating an excellent onboarding process.
To stay ahead of regulators, exchanges should add identity verification services to different points within their environments, to help reduce money laundering and meet compliance standards.
2. Automate Your Process
Relying on manual processes can eat into your onboarding budget. Manual work requires a human, which takes more time, is more prone to errors, and offers zero visibility which keeps almost everyone in the dark. Customers can’t see the status of their onboarding, which can erode trust and put teams in reactive mode.
When markets are on the up, investors want instant access to the party and manual identity verification can lead to long and cumbersome account opening processes that drive away new users; one of the main reasons for customer abandonment is the speed of the onboarding process. If your process takes days or even weeks to arrive at a decision as to whether a customer is being approved or disapproved, they’re very likely to go to a competitor. Automated processes are quicker, more accurate and more efficient and a user can gain access to services in seconds.
3. Update Your Methods of ID
Using ‘old-school’ forms of identification such as credit history mean that many good customers are turned away. A vast number of millennials do not have CRA data so if this source is used, they are rejected. Equally in countries with thin files, where traditional data does not exist or is scarce, an advanced, automated product offering can be used to qualify and verify new customers.
Utilising a wider range of more readily available data sources gives customers the highest chance of passing through your onboarding process, thus increasing acquisition and lowering costs.
Many businesses make the mistake that onboarding ends when a user signs-up to their service or purchases their product. The more a business knows about their customers, the more they not only build further trust within their brand but can tailor customers experiences to expand loyalty, improve overall customer lifetime value and obtain revenue retention.
How We Can Help
To avoid the above costs of customer onboarding, you need a partner and tool which is robust, efficient and compliant.
Introducing Sodium, our global ID, KYC & AML platform. Sodium is designed to help save you time and money, streamline your customer journey, automate your onboarding process, reduce fraud and achieve regulatory compliance by delivering a complete suite of Identity Verification and Fraud Prevention solutions via a single API. This solution enables all data sources to be cross-referenced and deliver truly enhanced customer due diligence.
A unique and real-time ID scoring system intelligently verifies identity through a combination of data sources, including digital footprint verification, document authentication, facial recognition matching, liveness verification, live utility data address verification and CRA identity checks.
Utilise a single element or multiple processes – it’s entirely up to you. Learn more about how we can help to automate and simplify your verification processes to help you to learn more about your customers.
Book a demo today and see for yourself how powerful our suite of solutions are.