Banks should use Covid-19 as an opportunity to assess their end-to-end digital account-opening capabilities. Here are the top 10 questions they should ask themselves:
- How long does it take to open an account digitally? Seventy-five percent of banks report it takes longer than five minutes to open an account, with close to 30% taking longer than 10 minutes. Abandonment rates increase significantly when the time to complete an application exceeds five minutes. If it’s more than 10 minutes for an online/website process or more than five minutes for a mobile process, the abandonment rate impacts account openings as much as 40%.
- How many clicks does it take to open an online account? The traditional bank onboarding process is significantly longer and more complicated than for newer challenger banks, sometimes by a factor of five times as many clicks.
- How long does it take to activate an account opened digitally? Some banks can take days — and even double-digit days — for account activation. When customers can apply for the Apple Card, for example, and receive approval and begin using it in minutes, patience with financial institutions that take longer will wear thin.
- How clear is the guidance we provide prospective customers? Only 30% of customer prospects who visit bank websites looking for an account will carry on through to the product details page, and just 13% will complete the application.
- How automated is our abandoned application follow-up? Few banks leverage pre/auto-fill and auto-complete data capture, and many don’t even save initial customer information (name and email) until the customer completes all initially required fields (i.e., hits the Save or Next button). Capturing this contact information and developing a strategic nurturing program to re-connect with them can help reduce the abandonment problem many banks face.
- Do we have “save and resume” functionality? Surprisingly, many banks do not offer the ability to start an enrollment and pick it up again later. Customers who stop will lose their time and effort because the process cannot be started where it ended on mobile or other channels.
- Have we optimized our know your customer (KYC) procedures for digital account opening? Many banks continue to use knowledge-based authentication and out-of-wallet questions, which have challenges when customers have recently moved. Do you need to ask all the questions? What information is easily obtainable via social media, making it less useful for KYC and security purposes?
- Does our mobile app perform well under all conditions? Latency kills the customer experience, and many banks’ mobile apps are not fully optimized for mobile devices, with rich content slowing them down.
- How integrated are marketing and digital? If you’re advertising a promotional rate, are you bringing customers directly to the promoted product or are you forcing them to navigate a product comparison page?
- Do we encourage a dialog with prospective customers? Most customers using digital to open an account want to be left alone – but some don’t. For those who have questions, do you simplify the acquisition at points of friction, either with human or AI advisor interventions, live text chat, click-to-call, video chat, or digital appointment booking? Do you provide human touchpoints and advice when needed?
Assessments can be completed to determine the right digital technology, tools, and customer experiences to address end-to-end digital account opening. These types of solutions can help now and with your mid- to long-term strategies. Done well, digital account opening can deliver substantial benefits. Retail customer acquisition in a physical, siloed world costs an average of $280. Shifting to digital onboarding reduces the cost to $120 and, in subsequent years, for additional clients to $19. A similar story exists in corporate banking, where acquisition costs can be slashed from $4,000 to $1,200.
Honestly assessing the gaps in your digital account opening process is a great first step toward using Covid-19 as an opportunity to position your bank for growth in the post-pandemic world. It’s not easy, but banks that invest in meeting evolving customer expectations will emerge as winners through these challenging times.
The world’s largest financial institutions count on us to help exceed expectations and win in the market. Our thought leaders and chief strategists are here to support you — from mapping customer-focused strategies to building and executing experiences that solve your most complex challenges.
The pandemic has forever changed your business. We can help you ramp up your new business imperatives.
To learn more about the importance of digital account opening in the touch-free Covid-19 era, download our perspective here.