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Originally published on CUInsight.

In 1962, Everett Rogers wrote the Diffusion of Innovationsa book that explored the factors that influence the speed and spread of technology adoption, and postulated that for most technologies the rate of adoption follows a bell curve: risk-tolerant or innovative individuals adopt first, the majority adopts en masse once the technology has been proven, and the most risk-averse or change-resistant adopt last.

Diffusion of Innovations 1

Rogers originally developed the Diffusion of Innovations theory using evidence from agricultural and medical process adoption, but the model can be applied to pretty much any idea, from Hush Puppies to Smartphones. Over the last few years the fast pace of innovation in retail banking has created plenty of opportunities to test Roger’s model.

Of course at Andera we are particularly interested in the diffusion of online account opening.  When we first started opening deposit accounts online in 2004, adding credit/debit data calls, identity verification, funding methods, and core system integration to online forms that strictly captured applicant data, almost no institutions offered end-to-end account opening, and the word “online account opening” didn’t even exist. Over the last ten years adoption has scaled across the industry, and today the technology is relatively common (and we have a whole lot more competition).

A few weeks ago we conducted a survey asking 122 bank and credit union professionals representing more than 100 institutions about their adoption of key technologies including Mobile Banking, RDC, PFM, responsive web design, and online account opening. (You can see the full survey results here) Most survey respondents (58%) reported that they have implemented Andera’s solution or one of our competitor’s. Another 28% of institutions surveyed have plans to add online account opening in 2014, which would close out the “Late Majority” section and leave the laggards to complete adoption.

We’re not an analyst firm, and our survey methodology was far from perfect because we could only survey our contacts, a dataset that skewed towards institutions who have or are thinking about online account opening. However, the results somewhat corroborate our earlier research. Over the summer one of our interns  (who doesn’t love interns?) spent several weeks visiting 1,371 bank and credit union websites to check for an online account opening application; we found that about 47% of institutions have online account opening, and another 12% host downloadable PDFs for deposit accounts. As you would expect, larger institutions are more likely to have online account opening, and smaller institutions are less likely. Interestingly, the adoption rate among credit unions is more than 25% greater among credit unions than among banks – go credit unions!

For more details, check out our blog at www.andera.com or contact us here.

Melanie Friedrichs

Melanie likes writing and data.In addition to financial technology and marketing, her interests include financial regulation, macroeconomics, and startups.

Melanie is a member of the first class of Venture for America, a two-year fellowship that seeks to revitalize American cities through entrepreneurship by matching recent college graduates with start-ups.You can reach her at mfriedrichs@andera.com or on twitter @mfriedri.

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