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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.
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.
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.
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.
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.
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.
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.
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.
Give Consumers What They Want: Easy Online Account Opening. Consumers who can buy anything with one swipe of their finger are demanding more responsive digital experiences from their financial institutions, including easy-to-use online account opening.
Banks have traditionally relied on physical branches and paper applications. But the world has changed. Customers are unsatisfied with the old way of doing things. They want to shop and buy online - even when it comes to banking services. Banks face a digital sales and marketing divide.
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