Customers who are accustomed to a seamless, Amazon-esque online experience are demanding the same type of responsive utility from their banks – and that includes online account opening. Yet creating and leveraging effective online account opening functionality remains elusive for most banks. The result is an expectations gap that’s damaging all around. Customers are disgruntled because they can’t get what they need and banks are losing out on a powerful sales and marketing tool.
The time has come for banks to break through the barriers and implement a powerful online account opening solution that drives customer growth, cuts acquisition costs, cross-sells products and services and increases revenue. It all starts with overcoming the most common myths about online account opening that have been holding banks back.
Myth 1: Most banks already have an effective online account opening process.
Wrong. They only think they do. Simply offering online account opening isn’t enough – it has to also be effective. Customers who report dissatisfaction with online account opening describe the process as too complex and too long. That’s unacceptable. In order to win customers over, banks have to give them functionality that’s truly useful, such as:
- An application checklist early in the process
- Real-time visibility into the steps and where they are in the process
- “Save and resume” options that allow applicants to come back and finish later.
- A completely digital process, eliminating the need for a branch visit.
Myth 2: Customers are gradually increasing their use of mobile devices to open accounts.
Wrong. Mobile device usage is exploding. With Bottomline’s network of more than 500 banks, mobile device usage has grown 111% since 2013. Because mobile is so prevalent, the online account opening process has got to be fast and seamless or else prospects will abandon it. In order to capture the mobile audience, smart banks will make sure their online account opening functionality includes mobile-responsive design, mobile photo upload capability and application pre-fill.
Myth 3: Banks can’t offer a frictionless process without risk.
Untrue. Managing risk in the digital channel is the same as managing it in a branch. It’s entirely possible to minimize the risk of robust digital functionality by using:
- Enhanced identity verification – Banks can leverage multiple third party sources to ensure that legitimate customers can open accounts while denying applications from fraudsters.
- Network monitoring – A solution that tracks account application activity from many banks can provide alerts based on suspicious activity across institutions.
- Market-proven solutions – Affiliating with a company that has experience with a large number of banks can reduce risk.
Myth 4: Abandonment metrics are the most important factor in measuring success.
Not really. While abandonment rate does reflect how easy the online account opening process is, it doesn’t capture customer acquisition costs or revenue per customer, and that’s what banks should be paying attention to. Those are the numbers that offer insights into the value of online account opening and provide validation for continued investment in the digital channel.
The reality is, customers want banks to recommend products and services – those products and services just have to meet their financial needs and be presented in an attractive, convenient digital package. Banks need to take advantage of that willingness if they want to get maximum value out of each new customer.
Myth 5: Larger banks process more online applications
Not at all. In our experience with hundreds of financial institutions there’s no correlation between bank size and online applications at all, simply because applications are driven by marketing effort, not institution size. Any bank of any size can easily increase the number of applications they receive by simply implementing:
- Ongoing marketing campaigns that drive traffic to bank websites and increase application volume
- “Apply Now” calls-to-action in the creative design of the bank’s website to increase the number of account applicants
- Re-targeting initiatives to reach out to applicants who abandoned their applications
- Analytic tools to support a “test and learn” approach, gaining real-time feedback on pricing, messaging, and product offers
Having a sleek, easy-to-use online account opening process is no longer an option. Banks that fail to provide such functionality will simply lose in the race to acquire and retain customers. But by better understanding these myths, smart banks can optimize their online account opening process and offer the truly seamless experience customers are looking for.
John Tabeart is Bottomline Technologies Senior Director of Product Management for Account Opening Solutions