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Improving the Digital Account Opening Process in Banking

Blog: ProcessMaker Blog

This article is part of a series on improving industry-specific digital account opening processes.

Digital banking used to be a luxury for top-tier banks, with most activity taking place at a brick-and-mortar branch. Now, more than half of customers conduct most of their banking on the internet, and the digital experience is the chief factor influencing a customer’s choice of a new banking partner. As a result, digital account opening is no longer reserved for industry leaders, but is a vital essential in every bank’s digital offering. 

The cost of a poor account opening experience is hefty—not only in customer satisfaction but financially. Commercial banks risk $4.5 billion in revenue if they continue to work through systems that don’t move at the speeds expected by modern customers. To build a commercial account opening solution that’s intuitive, interactive, and user-friendly, you must put the customer first. 

Why banks need to rethink their customer experiences

Customers are unwilling to wade through time-draining application processes

For many banks, a six-week application timeframe is status quo. Institutions that beat this number think they’re ahead of the game. But, nearly three-quarters of customers believe bank functions should be near instantaneous. They’re unwilling to wait on even complex functions like account opening or treasury funding.

Application abandonments cost the banking industry big bucks

Many customers begin the account opening process online, but immediately stop once things get too complicated. In 2018 alone, abandoned applications totaled $3.3 trillion in losses. By focusing on user-friendliness and ease-of-use, you can attract the business customers that other banks lose in the confusion. 

Account opening speed enhances loyalty

Business owners are busy and measure potential projects by their time investment. They’re most loyal to banks that respect their time pressures. In fact, 96% of customers who undergo a high-effort banking experience become disloyal to their financial institution. What questions are they asking when considering your account opening process? 

Analysts estimate that an iron-clad account opening process can earn your bank between 3% to 10% incremental value over the first year. Here are the four steps to delivering a winning self-service account application. 

How banks can create a winning digital account opening experience

1. Collect basic customer data in intuitive ways

A winning digital account opening process is more than pasting your offline application onto a website. Digital should be quick and fast, satisfying the modern thirst for convenience and expediency.  

While your current paper application might be dozens of pages, don’t weigh down your online process with unnecessary form fields. To offer the best digital account opening experience, you need to create a user-friendly workflow that customers will be happy to use.

2. Present a personalized list of products

Instead of presenting a long list of features for customers to sort through—with alarmingly high drop-off rates!—consider new interactive ways to curate a list of personalized offerings. 

Some popular sites report that 96% of users that start a quiz wind up finishing them. Leverage this popular marketing strategy to reduce abandonment rates. Pare down your complete list of services into a smaller collection of products pinpointed explicitly for each customer’s needs. By asking a few quick questions about the size of their business and spending habits, you can discover what products a customer is most likely to be interested in.  

3. Streamline Know-Your-Customer checks

Many banks allow customers to complete the first few steps of account opening on the web but then send them to offline channels to complete the process. Are you forcing customers to mail in documents or schedule an appointment at a branch to finalize their application? You’re likely experiencing sharp application abandonment rates—over one-quarter of Americans will seek out a competitor when asked to finish an application offline. 

Instead of the unwanted interruption, perform KYC right inside your digital application. You can use biometrics and sync-ups with third-party services: 

What Know-Your-Customer information do you really need to open up an account? The truth is, to get a new customer up and running requires far less paperwork than most banks admit. Instead of drowning users in unnecessary, time-draining steps, consider a gradual KYC process. Allow customers to unlock base features to “hook” them and gather additional regulatory information as they need access to different functions. 

4. Create accounts instantaneously 

Even the most user-friendly interface cannot overcome the importance of instant account creation. Studies reveal that 75% of online bank account openings take longer than five minutes. Sound fast? Think again—banking applications that take more than 5 minutes on mobile or 10 minutes on desktop lose the attention of 40% of prospects. By improving KYC checks and other backend workflows, you can have new accounts ready to go in mere minutes. 

What’s stopping banks from stepping up to the plate? A staggering 9 out of 10 banking professionals point to their own legacy infrastructure as the most significant obstacle blocking them from adopting user-friendly customer experiences that attract a fresh clientele. To survive the shift towards digital, banks need to connect with new technologies that help them serve up a stellar digital account opening process. Is your bank ready with the digital tools that build the thriving customer bases of the future? 


The post Improving the Digital Account Opening Process in Banking appeared first on ProcessMaker.

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