By David Eads
Mobile account opening can be a catalyst for omnichannel banking.
Banks have invested heavily in creating an omnichannel environment for their customers. However, a glaring issue is that the majority of a bank’s mobile offerings are geared toward existing customers only—leaving prospective new customers to languish through piles of paperwork in order to onboard. With so much invested in the channel already, it begs the question: why is this still the case?
For millennials making a trip to the branch isn’t the problem.
The problem occurs once they step inside and encounter the host of manual, paper-based processes used within many branches. New customers are uneasy about the juxtaposition of paper-based onboarding and digital banking solutions. The cognitive dissonance created often leaves them confused about which process must be addressed within a branch and which can be handled digitally.
To implement an omnichannel banking strategy, banks must establish an interchange of information between the digital and branch channels. This will provide customers with the flexibility to initiate transactions via their mobile device then complete them within the branch.
As a demographic group, millennials, who represent the bulk of new customers today, are shaped by technology more than any other generation. Industry data tells us that they access their financial institution 8.5 times per month via a mobile app or browser, versus 3.1 times on average for non-millennial customers. Yet they also demonstrate a preference for branch banking as well. Therein lies the opportunity for bankers to leverage their omnichannel initiatives.
Mobile onboarding effectively drives the initial engagement within the omnichannel experience.
Mobile onboarding allows customers to open accounts on their own schedule. This eases the initiation of the process and allows for quicker finalization of the details within the branch—if a trip to the branch is required at all. At the same time, bankers gain additional bandwidth to better understand the unique needs of their new customer and more intelligently suggest products and services to best suit that customer’s financial goals. This interaction via online communications or in-branch between banker and customer creates a deeper, interpersonal relationship that resonates with all customer demographics. But it’s particularly important among younger millennials, as many are learning about bank products and financial wellness for the first time.
As a banker, it’s easy to understand the digital channel ROI, based on operational efficiencies and customer experience improvements.
For years, bankers have been told that the branch is obsolete and that the future of banking is a digital one. However, that notion doesn’t square with the reality of consumer preference. Results from a consumer survey conducted by Accenture found 87% of millennials expect to continue using the branch in the future.
To counter the narrative that digital investments are the sole method of engaging with millennials, investing in branch technology that works in tandem with mobile offerings to create a seamless experience is likely the path to success. Banks should look no further than the quick serve restaurant/coffee shop industry for an example of this. Many popular brands utilize mobile platforms that allow customers to pre-order and pay through a mobile device and retrieve their order in the brick and mortar establishment, improving customer experience. The adoption of digital technology is a hallmark of the younger generations, and iconic brands that have failed to adopt these technologies are finding that they no longer have a chance to survive in today’s marketplace.
The retail experience in banks must change—and that begins with account opening.
The 21st century customer is a digital-native, mobile-first consumer. It is the environment in which they are most comfortable. Industry data tells us that today, account opening via mobile and online channels represent 28% of new savings accounts and 39% of new investment accounts opened online. And those numbers are steadily increasing. As more and more consumers’ initial contact with an institution take place digitally, expecting these customers to be satisfied with 20th century banking experiences simply will not suffice. For banks looking to fully embrace the shift to omnichannel, those that leverage the digital entryway of mobile account opening are positioned to benefit most.
David Eads is the CEO and founder of Atlanta-based Gro Solutions, which provides digital growth solutions for financial institutions. Twitter.