By Deb Stewart
Where is your smartphone right now? How long could you go without it? In Bank of America’s 2015 Mobility Study, 11% of respondents said they would last less than an hour without theirs. And of those, more than half (52%) check their smartphone at least every 5 to 10 minutes. This need for connection has extended to mobile banking behavior. Of those using a mobile banking app, more than six in ten access it at least a few times a week or more; two in ten check once a day or more. Some 63% of respondents have used mobile check deposit. And 81% of mobile banking app users are also using banking notifications and alerts—ranging from bill payments due, to fraud alerts, to reminders for appointments with a banker. Mobile banking is a part of our daily lives.
Accounting for Mobile Account Openings
Yet despite this strong preference for mobile engagement, only 23% of new checking accounts are opened digitally. While 28.3 million checking accounts were opened in person last year, only 7.2 million were opened on a website. And under two million were opened on smartphones and tablets combined, according to Aite Group’s November 2015 report, “Digital Checking Account Openings: U.S. Market Sizing.” Is this because of a strong preference to talk to someone at a branch? Or is it simply a lack of viable digital options?
David Albertazzi, senior analyst of retail banking and payments at Aite, believes it may be the latter. “Aside from a handful of challenger banks like USAA and Ally, and some technology-led startups such as Moven and Simple, there aren’t a lot of great mobile account opening experiences available to consumers,” he said. Instead, most banks have simply optimized their online screens to mobile. And those screens are based on outdated paper forms and processes. It’s been difficult to completely quantify abandonment rates for people who do start the account opening process on mobile, but Albertazzi estimates it’s in the range of 50-55%. “In addition to those that completely abandon the process,” he added, “we know that 36% switch channels during the process.” And most of those are switching to the branch.
The Missing Link
If customers want to open an account online—and they begin the process—why would they wind up in the branch? Albertazzi’s explanation is that customers can’t get their questions answered. Interactive chat or click-to-call are generally not available. And millennials have the same questions as everyone else, so even they are opening accounts in branch. “There are several areas we need to be addressed to resolve this,” he said. If 36% switch channels (not including abandonment) during the account opening process, the need for omni-channel data access becomes crucial. Customers need to be able to save their work, and the channel they switch to must have access to the information they’ve already provided. “Second,” Albertazzi said, “we need to create more dynamic workflows to make the process simpler. Pre-filling customer information, leveraging analytics, and use of imaging technologies will give mobile account opening as high a perceived value as remote deposit capture.”
The Technologies That Can Make This Happen
Is this the year that mobile becomes a part of the sales process? James DeBello, CEO of Mitek, maintains that it’s already happening broadly in other parts of the finance world. “Progressive Insurance uses mobile imaging to allow you to take a picture of your driver’s license and VIN,” he said. “Based on these, they’ll give you a quote on insurance.” He also points out that the technology that you use today for remote deposit capture is easily applied to other business purposes. A drivers’ license or passport image can be used to initialize any application or enrollment form. An image of the document is used to onboard that data to the appropriate systems, which greatly improves completion rates. “Pay statements, titles…the human experience is built on physical documents,” he said. In the past, there have been concerns about ensuring the authenticity of these documents. But today that authentication is possible. For example, Mitek offers a product called Mobile Verify, which verifies the authenticity of ID documents such as drivers’ licenses, passports and more than 3,500 other ID documents globally. Facial recognition technology adds another factor of authentication by comparing the face in a selfie to the face on the ID document photo.
Taken a Step Further
Robb Gaynor, chief product officer at Malauzai sees an opportunity for mobile account opening to also target internal cross-sell. With existing customers, there is no need for additional ID. So opening a savings account, CD, money market account or even a personal line of credit can be a very quick add-on to a mobile checking account opening. And this capability already exists. Gaynor also points to the potential of secure messaging to support the sales process in an even more robust way. “Secure messaging can now happen at scale, he said. “Chat, video, two-way secure messaging—even with attachments—enables customers to ask questions during the account opening process and greatly improve completion rates.”
The Business Case
It is estimated that a well designed app will allow a customer to open an account in about five minutes. This compares to traditional branch account opening times of 30 to 40 minutes. “We have three or four banks live with mobile onboarding today and expect to have 20 by year end,” Gaynor said. Among these banks, there are some that use the same onboarding process in their branches, using iPads. This approach makes for shorter account opening times, simplified document sharing and a consistent experience across channels. And branch staff benefit from simplified input, lowered probability of errors, and the time to have quality relationship-building conversations with customers opening a new account, Gaynor added.
Albertazzi also sees quantifiable benefits in a better app. “We estimate that it costs about $15 to open and onboard an account on mobile/online. This compares to $80 to $100 in a traditional branch.” This seems to make a compelling financial case for building this capability and using it on both a self-service and an assisted service basis.
So why are most banks still just optimizing their online screens? “Silos,” said Albertazzi. He contends that onboarding at most banks is still seen as a complex process, crossing a number of different systems, and that it’s not approached from the consumer’s perspective as a buying experience. Plus, most banks have built their online and mobile onboarding platforms based on outdated paper forms and their associated processes. “We need to remember that each useless question is an opportunity for abandonment,” he said. Between imaging and the other technologies available today, onboarding could be a far superior experience for customers. “It’s time,” Albertazzi said.
Deb Stewart of Charlotte, N.C., is an independent consultant working for the financial services industry. Email: firstname.lastname@example.org.
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