According to the most recent Online Banking Report, online and mobile account opening will surpass the opening of new accounts in branch offices by 2017, with account opening using mobile devices having a 37% CAGR. This growth will be driven by new mobile-first account opening capabilities including being able to use a camera phone for ID verification and document upload, information autofill, digital signatures, location tracking, direct funding, responsive design and even simplified next best product cross-sell.
The impact of these new capabilities has been significant, according to Jim Bruene, founder and editor of the Online Banking Report. “Financial institutions with mobile account opening capabilities have seen 20% of new accounts opened from mobile devices,” said Bruene. “This is mainly due to the determination and persistence of mobile-first consumers rather than institutions developing a mobile-first account-opening process, however.”
The report focuses on the mobile account opening (MAO) experience for checking accounts, and the landscape of solutions and workflows that comprise the end-to-end account-opening process. It illustrates that many banks are still using mobile devices to access banking websites, with the account opening experience not optimized for mobile.
“Consumers trying to open accounts using a mobile device are finding hard-to-read screens, the inability to fund accounts seamlessly, or the requirement to still use physical facilities to print off signature cards or provide proof of identity. This is not a good customer experience.” – Jim Bruene, editor, Online Banking Report
Key research questions answered in this comprehensive 28-page report include:
- Do consumers want mobile account opening?
- What are the components of a good mobile account opening solution?
- Who are the key providers of supporting technology?
- What kind of growth can we expect with mobile account opening?
- What advances are on the horizon with mobile account opening?
- What benefits can financial institutions expect from mobile account opening?
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Mobile Account Opening Today
In the past five years, the ability to open an account online has moved from being an innovation to being a required online banking capability. Long term, mobile account opening (MAO) is even more important than the ability to do so online (OAO). As one banker told the Online Banking Report, “Designing for mobile provides a better experience for everyone.”
The report found that, in most cases, mobile account opening is accomplished simply by accessing an institution’s online account opening platform via a mobile device. More and more often, however, organizations are finding that the functionality of mobile devices provides more opportunity to improve the experience.
In addition, it was suggested that banks will need to support MAO on both the mobile web and in their native app and to leverage responsive design to accommodate devices of various shapes and sizes. “The goal of mobile account opening is to meet consumers where they are, not to provide an extra hurdle,” stated the report.
Mobile Account Opening Trends
Consumers are using their mobile devices more and more each day as they look for ways to simplify their lives. This desire for increased digital functionality on the go is what is driving the growth and innovation around mobile account opening. Organizations with a mobile-first perspective will have a competitive advantage in the future as opposed to those organizations that believe consumers will ‘settle’ for a miniaturized online experience.
Neobanks like Moven, Simple, GoBank as well as mobile-first financial institutions like USAA and Navy Federal Credit Union were some of the first to offer mobile account opening. In the past year or so, however, several other (mostly larger/progressive) institutions have begun to introduce new mobile account opening capabilities to their customers. The Online Banking Report goes into significant detail around the keys to a state-of-the-art MAO experience:
- Simple navigation: Streamlined user interface with a clean, responsive design
- Clear communication: Well defined and communicated process expectations
- Single channel engagement: Avoidance of needing physical channel involvement
- Keystroke Reduction: Wherever possible, the pre-population of customer information
- Integrated advice: Helping customers with account choices and other questions
- Electronic funding: Allowing multiple ways to fund the new account with one touch
- Mobile onboarding: Capture of additional insight and integration of ‘go-with’ services
- Mobile cross-selling: Leveraging collected insight and internal data to offer additional products
- Retargeting: Reconnect with any potential customer who doesn’t complete the MAO process
- Capability expansion: Some organizations have used tablets to provide the MAO benefits in the branch
Successful mobile account opening goes beyond simply a strong customer experience. This experience needs to be built on a solid operational foundation that includes user experience decisioning, real-time analytics, a well-defined set-up and workflow process as well as decisioning around funding. Each of these internal components are discussed in the Online Banking Report. In addition, the components of the business case for mobile account opening are also discussed in detail.
The Future of Mobile Account Opening
Banks and credit unions are just trying to catch up to the mobile functionality offered by non-financial industries for years. The most advanced institutions reviewed in the report are piloting mobile account opening solutions that leverage the following mobile capabilities:
- Cameras: Mobile deposit capture has trained consumers that smartphones and banking can work together. For MAO, taking a picture of a driver’s license can authenticate identity, pre-populate account application data fields and assist with signature verification.
- Touchscreen: Security can be enhanced using the touchscreen on the phone for both PINs and digital signatures.
- Device Authentication: Additional security can be facilitated by using the devices internal identifier to verify phone numbers or a mobile-authentication process based on SIM cards.
- Location: Account fraud can be minimized using geo-locational data.
As with many Online Banking Reports, this study provided multiple charts projecting the acceptance and use of mobile account opening in the future. The research estimated a mobile account opening compound annual growth rate from 2013 to 2020 of 30 to 35% based on various assumptions. This growth would be achieved by financial institutions rolling out or improving MAO and would be positively impacted as more consumers use their mobile devices to access digital content, including banking services.
“In this report, we focus on the mobile account opening (MAO) experience for checking accounts, and the landscape of solutions and workflows that comprise the end-to-end account-opening process.”
— Jim Bruene
According to the study, financial institutions will see 2 to 2.5 million checking accounts opened and funded through mobile devices (both smartphones and tablets) in 2014. By 2020, that number will grow five- or six-fold to 10 to 12 million. By 2020, about 1 in 4 accounts are expected to be opened via mobile.
What once was the domain of the branch system is now able to be done on multiple channels. The importance of the account opening process can’t be overstated, however, since it sets the foundation for the complete customer relationship. More than simply the collection of personal information, a successful new account opening must also include expanded data collection, advice and funding options. In addition, there must be an onboarding and cross-sell process that improves the overall customer experience.
Optimization of the account opening process despite channel selection by the customer should be the goal of any organization. The good news is that there are literally hundreds of software solutions and data providers that can be deployed as a component of mobile account opening. The Online Banking Report provides a brief description of the leading providers who are mobile account opening solution specialists, or who are advancing MAO capabilities.
The innovation is definitely not over. More functionality will be offered and enhanced design and simplification will be introduced that will improve the customer experience. This will expand the market for this capability and provide additional differentiation to those organizations that continue to embrace a mobile-first positioning.