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Online Account Applications: Adopt a Mobile-Centric Philosophy Now

88.5 million Americans attempted to open an account online or with a mobile device in the past 12 months. While digital account opening has come a long way in just few short years, there is plenty of room for improvement: one quarter of all checking account applicants did not successfully complete the process.

While the majority of digital applications last year came in through financial institutions’ conventional online channel, applications via smartphones and tablet devices represented about 20% of digital applications for checking and savings accounts. One in ten consumers feel it is easier to open accounts on smartphones and tablets than it is online or by visiting a branch.

These are among the findings in “How to Upgrade Online and Mobile Account Opening in an Omnichannel Era,” a report from Javelin Strategy & Research. In the report, Javelin analyzes the state of online and mobile account opening compared with traditional branch applications. The findings are based on an online survey of more than 5,000 consumers, as well as interviews with bankers and vendors.

“Ideally, a consumer should be able to apply, open, and fund an account in one session,” says Mark Schwanhausser, Director of Omnichannel Financial at Javelin Strategy & Research.

The bottom line? Retail financial institutions had better adopt a mobile-centric philosophy… now. Javelin says banks and credit unions need to allow e-signatures via mobile devices, and branches should be modernized to better fit within the new omnichannel banking reality.

( Read More: 10 Tips To Drive More Online Applications )

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( Read More: Marketing Strategies To Shatter The Mobile Banking ‘Glass Ceiling’ )

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Kiosk & Display | Migrate Your Digital Signage to Windows 7

( Read More: Online Account Opening Frustrates Customers, As 1 in 4 Abandon the Process )

“The overarching strategic challenge is to weave multiple channels into a consistent, uniform, branded experience,” adds Schwanhausser. “Financial institutions must prepare for a customer who researches an account online, starts an application online (or on a mobile device), initiates a chat session, transmits supporting documents with a smartphone, and still might opt to visit a branch to seal the deal. The key is to enable the customer to decide.”

Credit card offers are particularly suited for online applications according to Schwanhausser. Not only are credit cards ideally suited for online comparison shopping, online rejection is less of a sting than an in-person branch rejection for consumers with borderline credit. And consumers can apply for several cards online in a matter of minutes, instead of driving from branch to branch or completing a bunch of forms by hand and mailing them.

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Comments

  1. I have been advocating this for banks and credit unions to simplify the solution for situations like this. We continue to audit + analyze their digital channels and share insight about how the omni-channel journey continues to lead back to digital in some, shape, form or fashion.

    In the past, we used to use the word, direct response marketing. With digital coming into play, more specifically mobile, the term we could use today is instant response marketing.

    For example, a bank or credit union runs a TV spot, with an instant response call to action. A recent study revealed that 30-40% of actual TV ad viewing occurred concurrently with mobile device usage. With this in mind, the consumer who has been planning on buying a new car, sees the auto loan spot and reaches for her mobile device. She types in the URL for your bank or credit union as part of the instant response call to action and is greeted by your mobile bank log in. Frustrated with the experience, she leaves never to return again.

    The above example is a common experience for many banks or credit unions who have optimized their mobile sites for their current customers or members to access their accounts, not generate leads for new loans or accounts.

    With a couple of modifications, a quick mobile optimized loan lead form could be implemented to capture basic consumer information. This could help the bank or credit union nurture this lead overtime and lead them down the path to conversion.

  2. These findings may provide some insight into the lingering consumer preference for opening accounts at branches. Branches are still the preferred venue, even – surprisingly – for Gen Y. Why? The online/mobile experience does not yet measure up. Complicated, confusing interfaces, funding hurdles, and lack of timely information and feedback in online/mobile account opening make going to a branch a necessary alternative.

    Efforts are already underway to take advantage of features unique to mobile devices (a camera to submit documents, biometrics, GPS, and more) to make the process simpler and better. FIs who deliver online/mobile opening that’s actually better than a branch experience will have a big competitive advantage.

    Those 20 million people who gave up on opening an account online, if they are going to branches, cost the industry far more than if they had been able to complete the process remotely. For nearly all other types of transactions, consumers are opting out of branches given a good alternative. Online account opening has to improve quickly and dramatically if the industry wants to ever climb out from the huge legacy costs of brick and mortar.

  3. Great points Kent. Thanks for the comment.

  4. Veronica Vega says:

    A question about the findings: The 76% Open and Funded accounts (according to the research) – Is this funded 1 way only or is the account activated and can be used without any restrictions?

    Knowing this has largest implications on how we can interpret the results.

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