I am looking for opinions and thoughts regarding online account opening - especially from those of you who currently offer it. We are in the process of offering online account opening. We are in the early stages - and are currently still looking at vendors. I'm not cracked up with the idea, however our bank president believes we are behind by not offering this service. We are a small/mid size community bank. I guess my biggest concerns, being in compliance, is CIP and disclosures etc. How do other banks handle CIP when opening accounts online. A couple of the vendors we have spoken to so far allow for the barcodes on the backs of DL's to be captured which copies the information into the system. And while they may offer a way for the customer to upload the front of their identification - it's not really a big deal to them. Call me old school if you will - but if we don't require an identification with a photo and signature - how do we ID somebody later on when they may step into the bank? Some in the bank say these customers will never come in the bank - thus why they are opening online. I just don't believe that considering our location and size... Plus this just seems like a really high risk to me.

I know I haven't really asked a true specific question. I guess I'm just wondering if somebody can alleviate some of my concerns with opening accounts online and verifying identity?

Thanks!

As you work through the various questions and concerns, remember that there's a big difference between opening an account and starting a new relationship. If you insist on face to face contact (at least once) at the beginning of each new relationship, your risk is lower.

Thanks Richard. I agree with the face to face contact - however we have looked at two vendors so far and nothing they have shown us leads to any face to face contact. Are there banks who offer online account opening which also requires the customer to come into the bank at some point? Like a two step process? While I don't know if the rest of the group would agree to this I sure feel like it would alleviate some risk.

Most banks that I know have a two step process for new customers and only existing customers can open accounts sight-unseen. It eliminates the need to try and deal with new customers that are not in your service area, reduces the potential for fraudulent accounts - because you are going to have to have some pretty stringent documentary and non-documentary testing to ensure the person opening the account is that person. It will scare away dealing with fraudsters at the start and make the process much more seamless on the management end of the process. Just some things to consider.

Thank you Randy! I like the idea of having separate processes for new customers. This is definitely something I will suggest in our next meeting. Dealing with new customers not in our service area was a concern of mine also and this would definitely help eliminate that. Thanks for the information!