According to a recent report from Andera entitled, ‘The Future of Account Opening’ the percentage of online deposit product applicants coming from mobile devices increased by over 800% in the past few years, from less than 3% in 2010 to 24% in 2013. Today about one in four online applicants apply from a tablet or a smartphone:
In a broader context, this trend makes sense. Today 58% of consumers own smartphones and 42% own tablets, and those numbers are growing at exponential rates. Estimates for the percentage of all web traffic coming from mobile devices range from nearly 20% to over 30%. While banking began shifting from the branch to online more than a decade ago, banking today is shifting from online to mobile at a much more rapid rate.
But the evolution of mobile account opening (MAO) has some key differences from online account opening (OAO). Whereas the growth in online account opening required institutions to develop an online account opening solution and consumers had to choose to apply online, the rise of mobile account opening has occurred even where there is not a dedicated mobile account opening app. In many cases, customers have simply chosen to access the online account opening app through their mobile device rather than wait for an optimized solution.
Similarly, where the difference between traditional account opening and online account opening was relatively straightforward—the former occurred in a branch speaking with a representative, the latter at a desktop typing on a computer—the difference between “online” and “mobile” isn’t always so clear cut.
So what is “mobile account opening?” Today, mobile account opening means two things:
- Account opening on a mobile optimized platform
- Account opening using mobile features
1. Account Opening on a Mobile Optimized Platform
Simply put, a mobile account opening solution is a platform optimized for mobile devices that can perform the five core functions of online account opening: data capture, qualification, identity verification, account funding, and account creation. Financial technology vendors may either provide a complete solution, like Andera’s, or technology that performs a single function, such as data capture or funding, that can be used as part of complete mobile account opening solution. What “optimized for mobile devices” means, however, is a bit more complicated.
“Mobile applicants are more likely to apply in the evening than desktop applicants, a pattern that reflects general mobile usage patterns.”
When considering mobile account opening, institutions have two options: 1) a native mobile application, or 2) a mobile web solution using HTML5 and Responsive Web Design. Although mobile applications are generally easier to use for repeat use cases, Andera believes that a mobile web solution is preferable for account opening because consumers are unlikely to download an application for a single application.
In addition, where different devices require the development and maintenance of different applications, mobile web solutions work on any device, regardless of screen size or operating system. As technology and design improve, the mobile application and mobile web experiences are converging.
More important perhaps than the choice between a native mobile application and the mobile web, however, is mobile-first design. The greatest problem facing online and mobile account opening today is poor user experiences that drive abandonment. Unfortunately applying for financial products entails more data collection than purchasing your average Amazon product, and many steps to satisfy risk requirements and comply with regulations. Careful attention to every step of the application is required to make the process possible on a mobile device.
2. Account Opening Using Mobile Features
Mobile device touch screens and cameras, in addition to the inherent portability of mobile devices, also make the addition of new mobile-specific features possible. These include:
1. Document upload via the device camera
2. Digital signature via the device’s touch screen
3. Photo data capture, using optical character recognition (OCR), barcode or QR code scanning, or some other method
Other mobile-specific features that could play a part in account opening further in the future include:
4. Location tracking for fraud prevention or qualification purposes
5. Identity verification via a fingerprint scan (like Apple’s Touch ID)
6. Voice recognition through a service like Siri
A good mobile account opening solution should incorporate as many of these features as possible to make the core account opening processes of data collection, qualification, identity verification, funding, and account creation easier.
What’s Next for Mobile Account Opening
“The impressive number ways to open an account and the many factors that are influencing its evolution make it clear that no one technology or channel will define the future of account opening.”
Consumers are clearly choosing to apply for financial products from mobile devices, with or without the help from financial institutions. But to convert them from applicants to customers or members, financial institutions and the technology vendors that support them need to step up to the plate to think about how to make account opening on a smartphone or a tablet as easy, or easier, than account opening on a desktop or laptop.
Over the next few years, we’ll see most existing online account opening providers optimize their platform for mobile, or lose market share to vendors who have. Mobile specific features that today set providers like Mitek and Andera apart will become standard, and vendors will primarily compete on the overall user experience that their platform can provide.