The facts make the case

Why digital sales channels matter

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70% of customers prefer digital account opening to a branch

Source: Javelin Research,  2017
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60% of new accounts still involve a branch

Source: Ibid.
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71% of NA consumers view e-commerce as more convenient

Source:  !Vend Retail by CitiXys, 2017
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44% of digital applications occur after hours

Source: Bottomline internal data

People prefer mobile

The use of mobile devices continues to explode, reaching every area of our lives. In financial services, this is no different. Creating a great mobile experience is essential to customer acquisition and growth.

Important facts:

Americans spend 5 hours per day on mobile devices

52% of digital account openers work on new bank account applications on mobile devices, up from 39% just two years ago. 

Only 8% of successful new bank applications are both started and completed on mobile devices.

In today’s world, a great mobile experience means more than having a traditional account application that can resize to fit the screens of smartphones and tablets. Creating a truly great mobile experience means delivering simplicity, and ensuring the right behind-the-scenes integrations are making it work.

Millennials have momentum

Did you know that 42% of Millennials are multicultural and they spend more than $65 billion each year? Millennials, generally defined as adults born in the 1980s and 1990s, are the most important demographic opening new accounts.

As young adults go to college, start a career, move to a new city, or buy a home, they are more likely to begin a relationship with a financial institution than at any other point in their lives.

Important facts:

50%+ of digital account applicants are 35 or younger

Nearly 17% of digital account openers are 25 or younger

Millennials access their financial organizations on a mobile app or browser 8.6x per month compared to 3.1x for all other users. 

building a digital experience

The enemies of a great experience

One of the reasons that digital sales in banking underperform is that too many applicants start an application that cannot be completed online, reducing the return on digital investment for the financial institution.

In some cases, financial institutions require applicants to complete the process in the branch. At best, this increases the cost of acquiring a new customer and lengthens the time until the account is funded with revenue-generating deposits.

At worst, requiring a branch visit will drive the customer away altogether.

In other cases, applications don’t get completed in a single session because they are poorly designed, too lengthy, or too onerous. Potential customers simply give up.

In this section, we’ll explore the enemies of a great experience and discuss what leading institutions are doing to slay them.

Data Entry

The Enemy: Data entry

The longer an application, the less likely it is to be completed. Many banks and credit unions first started digital account opening by replicating every aspect of the branch process in the online form. For consumers looking for a fast and easy experience, a lengthy application is a killer, especially if it is not optimized for mobile devices.

How financial institutions are slaying it:

Mobile-friendly design 

Many financial institutions have revamped their online account origination design to be mobile-first.

Mobile phone photo capture 

Capturing data from a mobile phone photo can eliminate the need for data entry in a digital application.

Re-engineering application forms 

Review every form that applicants are required to complete to ensure that every piece of data collected is necessary.

Reducing Knowledge-Based Authentication questions 

Better identity verification practices can reduce the need for KBA questions, which are notoriously ineffective and frustrating.

Deep Expertise Illustration

Risk and compliance

The Enemy: Risk and compliance

To comply with the Bank Secrecy Act and the U.S. Patriot Act, financial institutions must undertake the appropriate level of due diligence to verify the identity of a new account-holder. The downside is that many digital applications rely solely on credit bureau data, which may not be a great source for younger applicants or others without an established credit history.

In some cases, financial institutions are still requiring visits to the branch for signatures, terms and conditions information, and/or to verify the photo ID of the applicant.

How financial institutions are slaying it:

Real-time integration

Financial institutions leverage independent third-party databases during the application process to validate identity so that the account can be opened in a single digital session.

Non-traditional data sources

New sources of data are emerging beyond just credit bureaus. Some sources use information like e-mail, phone, social media, and IP-related data to assess risk. Other sources use government and public record databases.

Security and compliance media large illustration

Failed qualification

The Enemy: Failed qualifications

One source of frustration for applicants is when they don’t qualify for an offer that a bank or credit union has advertised, especially after having filled out a form and given the institution their information.

How financial institutions are slaying it:


If the right applicants are targeted upfront, the qualification rate will be much higher. There will always be situations where a prospective customer doesn’t qualify, however. But in many of those cases, the applicant would qualify for a different type of product.

For example, an applicant who doesn’t qualify for a premium interest checking account might still qualify for a basic checking account with fewer perks. Re-marketing to applicants with an alternative product offer can help drive new sales.

Real Time Analysis Illustration

Moving money

The Enemy: Moving money

Successfully funding the new account through the digital process is no small challenge. So it comes as no surprise that a high percentage of application abandonments occur at the account-funding stage of the process. People don’t always have the right information with them to facilitate the electronic transfer of funds, for example.

Yet, account funding may be the most important step of all because deposits are what drive financial benefit for the bank or credit union. An account that is opened but not funded doesn’t create any value.

How financial institutions are slaying it:

Making funding easy:

Offering the option to fund via a credit card or debit card offers immediate funds and eases the burden of information required from the applicant. You can even use smartphone photo capture to help the applicant enter their card information.

Payment Connectivity Illustration

Lack of engagement

The Enemy: Lack of engagement

Often the customer never activates the related services that would enrich their experience with a financial institution, such as the mobile app or account alerts. This ultimately means the customer is not receiving value and is more likely to switch to another bank or credit union down the road. In addition, studies show that highly engaged customers are more profitable than those who aren’t.

How financial institutions are slaying it:

Product bundling

Additional products are bundled into the product offer or presented as an add-on during, thereby increasing the number of customers already enrolled in digital banking channels.

Branch technology

In-branch tablet computers can provide an opportunity for branch personnel to educate new customers about digital capabilities.

Customer activation campaigns

Reminders to activate additional services and/or one-click access can be included in the new account confirmation email or email campaigns that immediately follow.

Data-driven cross-sell

Leveraging available data, financial institutions may make targeted offers relevant to personal activity or life events.

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Take advantage of what's next

Predictions for the future

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1. Business onboarding will go from multiple weeks to less than three days

Business owners are now demanding the same convenience they experience as consumers. The pressure is on to make business account openings and onboarding easier, faster, and better.

No more waiting weeks for all the required steps: addressing multiple owners or signers, authenticating the business as legitimate, addressing state and federal regulations. The financial institutions who streamline and automate these processes down to three days or less will differentiate themselves from the competition and increase their market share.

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2. Social media will come of age

Smart financial institutions will embrace social media by connecting to potential applicants in the right way, through the right social media channels, at the right time, with the right marketing to increase the success rate of their digital account conversions.

And it won’t stop there. After a consumer has opened an account, social media can continue to be leveraged to generate additional referrals, solicit positive online reviews and comments, and provide well-timed product and service offers.

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3. Biometrics will enter the world of account opening and onboarding

Banks are already leveraging biometric technologies, such as Apple ID, to access online banking.

Soon — and we predict it will begin in 2017 — biometrics, such as thumbprint recognition, facial scan solutions and animated selfies will be used as a way of validating or verifying digital applicants.

Biometrics have great potential to improve UX since they provide an additional authentication factor to mitigate against fraud, and can replace the need for challenge questions which often annoy customers and cause drop-off in the application process.

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4. Risk management will be redefined

The increasing digitization of account openings will require a corresponding maturation in risk management approaches. Financial institutions will establish risk management approaches that are:

Holistic - Risk management must take into consideration all available data sources

Targeted - Risk of each applicant must be weighed against the acceptable risks for the financial institution and the specific product

Real-time - Detection of unusual behavior will protect institutions against increasingly sophisticated fraud attempts

Predictive - Strong risk prediction engines designed to identify fraud

Frictionless - Employing real-time risk mitigation technologies for a frictionless user experience and customer satisfaction.

Why it matters?

70% of small businesses consider ease of onboarding/account opening to be a factor in their decision to switch banks.

Source: Aite/Bottomline, 2016


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