The do’s and don’ts of technical onboarding

During her Sibos session – titled "Improving the technical onboarding experience in payments” – Tricia Balfe, CEO of XMLdation explored the do’s and don’ts of technical onboarding. This article summarises the main takeaways

The payments value chain involves numerous points where technical onboarding must be considered. Starting with clearing houses and market infrastructures, these entities onboard banks and, increasingly, non-banks—especially in real-time payment systems. This requires technical integration between the systems of banks, non-banks, and the market infrastructure, necessitating extensive testing and coordination across multiple organisations.

Moving to the banks themselves, they must interface with corporate clients and FinTechs that support retail payments. This presents a further layer of technical onboarding, including integrating corporates using file-based payment systems and enabling API access to payment services. Additionally, banks must support FinTechs and technology companies as they integrate with their APIs.

To manage this technical onboarding, banks have traditionally relied on relationship managers – people talking to people – to smooth the process and keep the customers happy. If you only have a few organisations to onboard, this handholding approach can still be quite effective. The problem is that it doesn't scale.

Picture the scene: rather than having to onboard only a couple of organisations you now have to onboard thousands. Having a technical expert walk each through the process quickly becomes untenable. You could try replicating your experts, but that is not only very hard to do, it is expensive and inefficient. The answer lies in technical onboarding tools.

The do’s

When designing a seamless technical onboarding process, focus on empowering clients and ensuring efficiency through these key "do’s":

1. Do emphasise client control

When onboarding, the first step – whether you are a bank or market infrastructure – is to share information with your clients. This should include the documentation associated with the file formats or API definitions, as well as samples that showcase what is expected from clients. Next you open up an easy-to-use self-service validation tool so the client can independently test that their messages and API calls meet your specifications.  The third step is a free form testing tool, in the form of a Sandbox or Simulator where clients can submit messages and receive responses for the main test scenarios.  And by providing these self-service tools, the onboarding time can be reduced by approximately two thirds.

2. Do allow clients to build confidence

When the client has enabled their systems to produce files and make API calls correctly, the next step is the end-to-end testing. This is the point at which connectivity and the relevant security for the API calls needs to be setup to enable the client to conduct a suite of test scenarios – often with a simulated counterparty, such that the client retains control of their testing timeframe. The final stage is a suite of certification tests which, once complete, proves that the client has achieved a certain level of maturity.

3. Do monitor progress and provide timely support throughout

It is important to monitor your client’s progress throughout the onboarding journey, such that any potential blockers can be quickly identified and addressed – ensuring clients stay on track and are ready for the next phase. In addition, monitoring can also uncover unexpected testing behaviours, providing insights to refine your onboarding tools and processes for the future.

The don’ts

When implementing effective testing and onboarding processes, it’s as important to focus on what not to do as it is to define what to do. Here's a breakdown of key "don’ts" to consider:

1. Don't delay testing:

Start testing as early as possible. Testing should run in parallel with other activities like KYC processes and connectivity setup as waiting for all components to align first significantly slows the process.

2. Don't aim to test everything upfront:

While technology teams often gravitate toward solving complex problems, you should resist the temptation to cover every edge case during onboarding – and should instead prioritise essential and straightforward scenarios. Remember that simple tests can be just as impactful, and providing manual support for repetitive, simple tests can be very challenging.  For example, automating a simple test performed 1,000 times is often more beneficial than tackling a single complex scenario.

3. Don't rely exclusively on copies of production systems for testing:

While copies of production systems have their place, they come with significant drawbacks – and you should instead opt for systems that allow for continuous and flexible testing:

• Limited replication of critical scenarios: Certain test cases, like level-two wire failures or fraud rejections, are difficult to replicate in a production copy.
• Restricted access and test windows: These systems often require controlled windows for testing, reducing flexibility for clients. Clients lose control over when they can test, which slows progress.
• Data privacy and security concerns: Production copies often contain real data, which poses significant data privacy and security risks in many markets. Protecting this data to production standards complicates testing unnecessarily.

4. Don't depend on people over tools:

Effective testing processes rely on automation and tools, not manual effort. Tools ensure consistency, efficiency, and scalability, while reducing the risk of human error.

Building client trust

To recap, technical onboarding can be a frustrating experience for both banks integrating with infrastructures and clients integrating with banks. To improve this, aim for a more polished approach: guide your clients, empower them with self-service tools for learning and testing, and maintain strong communication and relationships. By actively monitoring and supporting clients, you can make the process smoother and more effective.

Early testing is key – it can reduce onboarding time by up to two-thirds while significantly improving the customer experience. A seamless onboarding process not only enhances satisfaction but also encourages customers to expand their use of your services and remain loyal through upgrades. Streamlining onboarding is essential if you want to build trust, loyalty, and long-term engagement with your clients.