Account opening solutions have undoubtably emerged as one of the most essential initiatives a financial institution should invest in. In fact, account opening has been a very hot topic in Cornerstone’s What’s Going On In Banking for the past four years. So what lies ahead? With technology and consumer demands rapidly evolving, it is now not sufficient to solely have a streamlined account opening process. It must have more.
Account opening solutions must first and foremost be agile to keep pace with new technological developments. Unfortunately, financial institutions are falling behind in investing in the most nimble onboarding systems. In 2024, digital checking account openings declined as a result of bottlenecks in improving account opening systems and evolving demographic shifts. Banks and credit unions need to strategically invest in account opening platforms in order to reverse the decline in digital checking account opens.
Essentially, it now falls below expectations to buy or build a simple account opening solution. It is pivotal to institute a complex onboarding platform that has multiple, state-of-the-art functionalities and has the capacity to quickly intake new enhancements people desire.
Functional Features
With technology progressing swiftly, there are numerous features an account opening platform needs to encompass. Today, capabilities like signing up for online banking, Direct Deposit Switch (DDS), and seamless credit card application and approval are amongst the most requested from consumers.
Direct Deposit Switch allows customers to move and allocate direct deposits to newly opened accounts at their bank or credit union. Implementing DDS within the account opening process is crucial for enhancing the customer experience and simplifying tedious tasks.
Gene Fichtenholz, Vice President of Digital Strategy & Engagement, at Meriwest Credit Union, a $2.2 billion-asset financial institution headquartered in San Jose, California, attests to the importance of DDS in a recent podcast with Terafina, an NCR VOYIX Company and The Financial Brand.
“At Meriwest Credit Union, our goal is to foster long-term, satisfying relationships with our members by providing excellent products and services. We strive to be our members’ primary financial institution. When a member chooses to switch their payroll deposits to Meriwest, it signifies ultimate trust in our institution. Simplifying this switch not only makes it easier and more attractive for our members but also enhances profitability for us, which in turn allows us to offer even better products and services.”
When considering an account opening solution, financial institutions should look for solutions offering frictionless onboarding of customers to value-added services such as DDS as part of the account opening process itself.
Dinesh Kale, Vice President of Product Management and Engineering, at Terafina, an NCR VOYIX Company, discusses, “Banks and credit unions must consider onboarding solutions that now have a good DDS capability that empowers users to make the switch. It is paramount that financial institutions look for a solution that provides a good user interface, has the capability for personalization in direct deposit allocation, proper security features, and seamless integrations with HR systems.”
Ensuring your platform has this feature – whether it be through branch or digital channel – significantly reduces friction and elevates the banking experience. Choosing an onboarding platform that has this capability can quickly boost share of wallet and increase funding for your financial institution.
Just as newly integrated upgrades such as Direct Deposit Switch need to be considered in the development or selection of an onboarding system, ways to optimize standard account opening functionalities are increasingly crucial.
For example, when analyzing lending solutions in the account opening space, it is essential that onboarding platforms have end to end credit card approval abilities in the current landscape. With 48% of businesses now applying for cards online, this is a huge share of market financial institutions could capture with the right tools and functional services. The convergence of credit card approval within the onboarding process optimizes the account opening journey and can boost engagement rates for financial institutions.
Looking ahead, end-to-end credit card approval processes are poised to become industry standard, driven by technological advancements and customer needs. Financial institutions that prioritize new technology that customers expect will have a competitive edge in acquisition.
Cutting-edge functionalities within the account opening process such as DDS and end to end credit card approval represent a transformative milestone in digital banking. It is critical for banks and credit unions to implement these features to capitalize on growth opportunities in the ever-changing economy.
The Essentials Need to be Exceptional
In today’s rapidly evolving financial landscape, account opening platforms can no longer be tools for basic transactions, they must be remarkably comprehensive. As a result, the standard capabilities such as external account funding and document upload have to be effortlessly intuitive, requiring little to no additional thought for consumers.
Dawn DeCius, VP Retail Sales & Service, Harborstone Credit Union, a $2 billion and growing financial institution in the Pacific Northwest, explains how her financial institutions institutes this philosophy, “In today’s competitive financial landscape, it is alarming that typically only 30% of consumers successfully complete the digital account opening process. To address this gap, we have personalized the experience to meet individual needs and preferences and removed barriers.
For common account opening obstacles, we offer automated solutions to help members through the application. For those in need of additional assistance, we offer personal outreach to help guide them through the account opening experience. With this scalable approach, we have increased satisfaction, engagement, and conversion rates.”
Harborstone Credit Union has distinguished itself through a combination of innovation, technological adaptability, and member-centric focus. Embracing financial technology partnerships to accelerate growth, the credit union has seamlessly integrated an account opening platform that makes onboarding simple, easy, and quick. By investing in technology for account opening that also has automated back-end processes for improved data quality, they have not only retained but expanded their membership base. This approach has positioned Harborstone as a robust and trailblazing institution.
Ken Bloomfield, VP Internal Communications, further attests “Account opening is the critical first step in the onboarding experience. Offering a quick and simple application for opening deposit accounts is no longer a nice-to-have; it is essential for both membership and deposit growth.
Harborstone has achieved this through the right partnerships with financial technology companies. Our new digital account opening system was implemented in a fraction of the time it took with previous solutions, allowing us to bring a streamlined experience to our members and prospects as quickly as possible.”
An Area of Important Growth
An important area to invest in is the realm of small business deposits in the online channel. In fact, more and more small businesses are looking to open complex accounts online. These capabilities must be instituted to gain market share. A study from The Financial Brand found that “institutions that have grown deposits during four quarters of brutal rate increases for the balance sheet, have something in common: They’ve used digital account opening to remove friction from funds coming in the door.”
And if your financial institution has not strategized around this initiative, it may already be falling behind as, “roughly three-quarters of banks will focus on growing retail and small business deposits, and half will look to grow large commercial deposits.” More surprisingly, perhaps, is that about half of the credit unions will put an emphasis on increasing small business deposits, an area in which they have not been typically strong” (Cornerstone, What Is Going On In Banking 2024). Unquestionably, having an advanced, and flexible deposit solution for account opening can provide a foundation for expedited growth and retention.
The evolution and advancement of account opening mirrors the pattern the industry has taken on as a whole. With rapidly changing consumer desires, account opening processes must contain advanced capabilities; simply having a basic account opening solution is not enough. Financial institutions must implement features such as Direct Deposit Switch and end to end credit card approvals to capture consumer market share. Functionalities like these improve the customer experience and simplify back-end processes.
Pioneering institutions like Harborstone Credit Union will continue to capture consumers with investments in technology, prioritization of personalized experiences, and strategic partnerships. Their initiatives demonstrate how embracing innovation can ensure continued growth in this economy. Ultimately, ventures in deposit technology, partnerships with strategic, forward-thinking financial technology players, and an openness to remain innovative are the keys to leap to the forefront in the second half of 2024 and beyond.