Financial Services Online Account Opening is a pivotal capability for banks and financial services firms. In 1994, Bill Gates famously said, “Banking is essential, banks are not.” In the developing world, mobile banking trends must be inclusive in providing mobile payment and banking options. Banks have become more proficient in understanding the consumer journey, taking a strategic approach to integrating technology. Online capabilities offer customers who are not in the area an opportunity to make use of those bank services, subject to licensing and other issues. Since the mid-2000s, forward-thinking banking and financial institutions have embraced this model, making it feasible for a wide array of customers to transact.

What is Financial Services Online Account Opening?

Consider this – your institution is engaging new ways to cater to customer needs through the capture of data, qualifying the customer, verifying their identity, being able to fund their accounts through transfers or check deposits, and the creation of new accounts in one place, at one time.

A study by the Federal Reserve showed that 67% of millennials now use mobile banking, compared to 18 percent of consumers age 60 or over.

Through the online account opening platform, banking institutions are also able to provide personalized sign-on features, save and resume, cross-selling, document uploads, and electronic signature options without ever having to visit a branch. In 2014, nearly half of all checking account applicants submitted their application online or through a mobile phone. In 2015, 70% of consumers who planned to apply for checking accounts preferred to do so through a mobile channel.

How important is customer experience?

A study by the Federal Reserve showed that 67% of millennials now use mobile banking, compared to 18 percent of consumers age 60 or over. In the world of online accounts, customer experience should be the number one priority of the overall plan. The survey findings illustrate online account opening process should be:

  • Streamlined
  • Easy to use
  • Option-oriented
  • Secure
  • Accessible

Banks and financial institutions must ensure the customer is engaged enough to finish their transactions without abandonment. Banks and financial services firms must make sure that the focus is not just on data collection, but in compliance with regulations while at the same time meeting customer needs. These are the top reasons why customers do not complete transactions:

  • Fear
  • Frustration
  • Confusion
  • Other distractions
  • Inability to verify identity
  • Failure to check funding

While these are all valid reasons, they are also detrimental. The process needs to be innovative, fast and technology integrated to work well.

How has this impacted the banking, financial services, and insurance industry?

Online account opening has propelled banking institutions to rethink their models, catering to a younger, technological and savvy banking and financial services customer. According to recent data, online account openers are between 25 and 35 years of age. This demographic is also wealthier, more education and more likely to have children.

What are the benefits of online account openings?

There are some advantages to banking institutions:

    • Larger footprintBanking institutions can compete with virtual banks. The footprint provides an opportunity to have branches all over the world without the additional expense. This increases the likelihood of new customers who are searching for the best interest rates and customer conveniences.
    • ConvenienceAccount Opening meant sitting in a branch and waiting for an hour. Now online the account opening forms allow 24-hour access and from anywhere in the world. This lessens wait times and provides flexibility for the on-the-go customer.

Banking institutions must make a concerted effort to make the user experience on mobile devices just as easy as opening an account with a computer.

  • Overall savingsWithout the added expense of physical locations, banking institutions can funnel those savings into making the customer experience useful.
  • Easier tech updatesCustomers can get the latest app updates with the click of a button, which gives them new information in real-time. This also increases safety, and aids in risk management. Disclosures are given automatically, without added expense.
  • ComplianceCustomers can get agreements and other information immediately, which enhances the auditing and compliance efforts of the institution. They are also able to opt-in and electronically sign the agreement without worrying about the hassle of going into a bank.

Winning in Financial Services Account Opening Technology

With the addition of online account openings, consumers are using their smart devices or computers to handle these transactions. This may be a challenge for banks to consistently upgrade their systems to handle the massive influx of customers that prefer mobile banking. From July to December 2013, 18.4% of consumers opened accounts on their mobile phones, while only 5.6% of customers used a tablet. Banking institutions must make a concerted effort to make the user experience on mobile devices just as easy as opening an account with a computer.

Today’s website must be optimized for each user. Minimalistic and responsive design that will give customers what they need is critical. There must be a call to action on every page that will motivate consumers to apply, focusing on specific offers when cross-selling.

Why is this such a challenge?

These problems occur because of consistent changes not only in the technology used but also in the smart devices that are used to open accounts. Banking institutions must embrace photo data capture, which has been successful for some establishments for depositing checks and other items, document photo upload, which should be automatic, touch signature, and location tracking to ensure customers receive adequate protection against fraud.

How can this be done?

When banking institutions take the time to implement new technologies that work, customers will react. Paying attention to workflow, user experience, and digitally optimized products that embrace the data-driven experience is essential. Shared services and around-the-clock customer support by phone that understands customer needs is vital to this integration being successful. Integrating online account opening is crucial, as mobile devices around the world will demand speed, convenience, and a steady increase in the years to come.

Please consider Finantrix Financial Services Account Opening Transformation Toolkit if your bank is considering transforming the online account opening capabilities.