5 Ways to Maximize Your Account Opening and Onboarding Process

Simply opening more accounts doesn’t automatically translate into more profits. Without an effective program for fully engaging new account holders, you could end up investing marketing money just to lose money.

Most banks and credit unions invest heavily in acquiring new relationships, but there are significant opportunities to maximize both engagement and profitability. Here are five simple strategies financial marketers can implement in their new account opening and onboarding processes.

1. Plug the Funnel and Convert Abandoned Applicants

With deposit accounts, around three quarters of applicants in digital channels bail without finishing their applications. Motivating people to open accounts is difficult and expensive. Why risk losing the majority of applicants at the finish line?

Many financial institutions calculate “abandonment rates”, a simple formula that divides the number of completed applications submitted for a final decision by the total number of applicants. However, abandonment rates are often grossly underreported. The issue lies in the way “total applicants” is calculated. With many digital account opening platforms, applicant information isn’t saved until an initial set of required fields are completed. Until that’s done, applicants aren’t counted in the denominator. This results in understated application abandonment rates. (It also means that institutions can’t get back in touch with applicants that bailed early because contact information was never harvested.)

It’s a lot easier and cheaper to reengage someone that already expressed interest than it is to attract someone new. Retargeting abandoned applicants pays huge dividends. By capturing and immediately saving applicants’ names, email addresses, and mobile numbers, banks and credit unions can send email and SMS reminders that motivate abandoned applicants to come back and open their accounts.

Tip: The easy solution is to immediately implement a “landing page” that is placed between any “Open” or “Apply” call-to-action and the broader digital application (see below).

Reminders should ideally be sent within minutes after abandonment. When messaging comes days or weeks later, applicants are more likely to have already opened accounts with another provider. Use email and SMS reminders over two to four weeks after an applicant abandons and consider offering an incentive.

2. Prioritize Engagement and Earn More

When customers and members use account-related services like direct deposit, bill pay, and their debit cards, they’re far more likely to stick around. Plus, fully engaged customers and members generate an average of $212/year in incremental profit compared to inactive ones.

It’s important to acquire new accounts, but you’re investing money to lose money when customers and members don’t fully engage. And that’s the trouble: they don’t fully engage.

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3. Welcome New Account Holders Immediately

Waiting a few days can mean the difference between a fully engaged customer and an inactive one. But according to the Digital Banking Report, fewer than half of banks and credit unions have a structured onboarding program in place for new account openers. The majority of institutions that have programs use direct mail and phone calls (among other tactics) to welcome and onboard new account openers. The trouble is, traditional tactics introduce a delay in the process and break the momentum.

Tip: As soon as new accounts are opened, send an instant acknowledgement that thanks them and provides help with enrolling in account-related services.

Among the those institutions that told the Digital Banking Report that they had a structured onboarding program in place (47%), three quarters of them said that email communications was the most commonly used channel for outreach. Like SMS, email allows for instant outreach so new account holders don’t lose steam before important account set up information arrives. Digital communications also let you link to additional information and help resources that make it easier for customers and members to adopt additional products and account-related services.

According to Dimension Data, nine out of ten people would like to use SMS text messaging to communicate with businesses. And Shift Communications found that 82% of U.S. smartphone owners reported that they read every SMS text message they receive. Chances are, your email open rates are lower than 82%, phone calls go unanswered, and mail gets tossed aside before it’s even read.

4. Remind Them Often

If a new account opener doesn’t engage in the first 90 days, very likely they never will. JD Power & Associates found that new account openers should receive five to seven communications from their financial institution in the first 90 days. Yet, the majority of banks and credit unions don’t communicate often enough.

Tip: Follow up with customers and members immediately after account opening and send reminders to help them enroll in account-related services.

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5. Be Their Guide

If someone takes the time to open a new account, they probably had the best intentions of using it. Why then are 25% to 40% of new checking accounts closed within the first year? Because people think that financial services like online banking, direct deposit, and bill pay are a pain. A quarter of all consumers say that it’s difficult to enroll in online banking, while one in five say the process of switching direct deposits and bill pay is a hassle.

It doesn’t make sense to use paper welcome kits and direct mail to motivate someone to adopt digital banking services. Give customers and members an easy-to-follow digital guide with one-click access to enroll in additional products and account-related services. Consider linking email and SMS reminders to a landing page or microsite where new account holders can easily access the information they need to set up their new accounts.

Tips: Keep communications simple. Avoid describing every feature and instead highlight one to three benefits of each product or service. Where possible, feature short videos or other help materials that show customers and members how to enroll and give them direct links to take action.

Test, learn, and iterate. Unless you are leveraging best-practice campaign templates, discovering the optimal onboarding process takes trial and error. It’s wise to test your approach and vary message and webpage content, message timing, cash incentives (if applicable), and other variables so you can identify the winning combination.

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