AFTER years of requiring in-branch visits for people to open new accounts, more financial institutions are embracing technology to allow new clients to be onboarded digitally.

The latest entities to announce digital onboarding tools are CIBC Caribbean Bank Limited (formerly FirstCaribbean International Bank Limited) and JMMB Group Limited, both of which recently launched their digital onboarding platforms. They allow for new and existing clients to be verified by inputting their personal information, taking a photo of their relevant KYC (know your customer) documents, and taking a selfie which is secured through encryption. The financial entities will verify with a subsequent call to the client to ensure they’re the ones who applied to open the account.

The only situation which would require a branch visit would be if something else needs to be verified or if the client is going to collect a new debit card.

“You can now open a deposit account completely online with CIBC Caribbean using our enhanced digital client onboarding platform. As a fully digital end-to-end process, it simplifies the opening of individual savings and chequing accounts for new and existing personal banking clients, including sole traders, in Jamaica,” read a CIBC email sent to clients which notes that this process cannot be used for joint accounts.

The introduction of the digital onboarding facility by CIBC Caribbean comes nearly a year after it debuted its loan store which allows borrowers to complete a loan application and receive funds in under 10 minutes. That platform processed nearly 10,000 applications in 2023 when it was fully rolled out.

In the case of JMMB Group, clients can apply to open both bank and investment accounts in Jamaica, the Dominican Republic, and Trinidad & Tobago. This new digital onboarding option was launched in mid-August and is a step beyond the prior process of completing forms, emailing them to JMMB Group, and awaiting a call days later from an agent to verify the client making the request.

The other commercial banks in Jamaica with online account-opening options for new and existing clients are National Commercial Bank Jamaica Limited (NCBJ), Sagicor Bank Jamaica Limited, and First Global Bank Limited. JN Bank Limited still requires persons to visit in branch to open a new account but their ONE JN Passport tool allows for clients whose KYC information remain current to approach other entities under the JN Financial Group to open new accounts and access products without needing to submit new KYC documentation for each entity. Bank of Nova Scotia Jamaica Limited (BNSJ) allows for existing clients to open new accounts through their online banking platform but new clients still have to go in branch. BNSJ is likely to debut an online onboarding solution at a later date.

With respect to persons seeking to invest their money, very few brokers allow clients to fully open an account online without the need to visit a branch. Barita Investments Limited allows for new clients to sign up online but they have to visit a branch afterwards. NCB Capital Markets Limited allows for existing NCBJ clients to open new NCBCM accounts online but new clients have to go in branch. Proven Wealth Limited and Mayberry Investments Limited allow for clients to open new accounts entirely online.

On the initial public offering (IPO) perspective, nine out of the 14 JSE brokers have launched online platforms already to allow for persons to apply for capital market offers online. The only caveat is where incorrect information on an external database causes the broker’s IPO platform to reject the application of an investor.

“Phase one is when you come into the branch; you don’t have to talk to the branch representative. You go to the kiosk, and instead of dealing with a customer representative you can put in your documents and start to open the account. Phase two is that you don’t have to go into the branch. We’re well on our way on that digital onboarding across all business lines,” said Joanna Banks, executive vice-president at Sagicor Group Jamaica Limited in a recent investor briefing.

However, this begs the question as to why so many banks are lagging in creating these online portals for persons to open accounts online. A major factor in this paradigm shift is the COVID-19 pandemic, which has forced digital transformation forward, and the accompanying investments to move this process ahead. While digital onboarding can be a cheaper process and improves efficiency for the financial entity and customer, the necessary investments are key to enable these changes.

“The governing legislation regarding establishing business or one-off relationships with banks does not limit a bank’s ability to develop such relationships digitally. As set out in Regulation 7 of the Proceeds of Crime (Money Laundering Prevention) Regulations, 2007 and Regulation 5 of the Terrorism Prevention (Reporting Entities) Regulations, 2010, banks are required to, as soon as is practicable after contact is first made, have the customer produce satisfactory evidence of his/her identity, and take measures to verify that customer’s identity. Therefore, if a bank digitally establishes a relationship with a customer, the bank must then institute measures and controls to meet the requirements under POCA [Proceeds of Crime Act], TPA, and Bank of Jamaica Guidance Notes. That is, the bank must be able to verify the customer’s identity and authenticate the validity of documents provided digitally in a fully online onboarding process,” Bank of Jamaica (BOJ) explained in an email to the Jamaica Observer.

BOJ also added, “However, where banks are unable to digitally verify a customer’s identity and/or authenticate submissions made by the customer digitally, then institutions will have to take additional measures to verify and authenticate such information, which may include requiring the customer to take the physical form of documentation to the bank.”

BOJ’s comments come at a time when several legislative and policy changes have been made in the last five years to encourage more persons to join the formal system. In 2019, amendments to regulations 5 and 7 of the Proceeds of Crime Act (POCA) allowed financial institutions to use a risk-based approach in their procedures which also remained compliant with the law. This led to several banks creating low-risk bank accounts which only required persons to have a government-issued ID and tax registration number to open these accounts.

In late 2023 there were amendments to Section 118 of the BOJ Guidance Notes, and Paragraph 183 (h) of the Financial Services Commission (FSC) Guidelines on the Prevention of Money Laundering which no longer required regulated entities to request two references when onboarding clients. Almost every bank, broker, or insurance company has removed the reference requirement since then.

“The Fintech Regulatory Sandbox (‘the Sandbox’) is a crucial driver of innovation in the financial services sector. Several entities use the Sandbox to develop and test digital solutions, successfully achieving their innovation objectives. This proliferation of digital solutions and the successful attainment of their goals are expected to contribute significantly to Jamaica’s digital transformation,” the BOJ added.