Why Online Account Opening is a Game-Changer – and How to Accelerate Time-to-Market

Online account opening is quickly becoming table stakes for banks and credit unions. With increasing consumer demand, it’s estimated that more than 13 million new bank accounts will be opened via digital channels in 2022.(1) Yet, many financial institutions are not prepared to meet the need – and falling behind could have a costly impact on customer retention and acquisition.

Nearly 25% of consumers would prefer to open a new deposit account via online or mobile, but their current banking provider doesn’t offer that option.(2) If traditional financial institutions don’t catch up quickly, challengers like digital banks (and non-banks) will continue to gain traction. By 2024, it’s expected there will be up to 47.5 million U.S. digital-only bank consumers with at least one account.(3)

“The largest banks and neobanks are best positioned to capture this influx of new business, based on the strength of their mobile account opening features.”(4)

Success relies on a fast, end-to-end digital experience

Enabling consumers to open a deposit account or request a loan account in just a few taps on a smartphone is now a business-critical way to attract and upsell customers. However, relatively few financial institutions provide a true end-to-end digital experience. While increasingly rare, some financial institutions can initiate account opening online or on mobile, but still require a branch to provide ID verification, signatures, and funding. That is not the experience today’s consumers want.

Another major challenge is that online account opening is often too complicated and takes too long. Up to 70% of people who try to open an account online abandon the process because it’s not simple enough.(5) And statistically, those people will not try again or visit the branch; they’ll turn to a large bank, digital bank, or Big Tech provider that makes it fast and easy to meet their needs.

When legacy core systems make it difficult (or impossible) to innovate, how can banks and credit unions modernize with online account opening to stay competitive?

Many financial institutions are driving transformation with fintech partnerships. Collaborating with technology specialists enables organizations to deliver best-of-breed digital banking and account opening more quickly and cost-efficiently.

“To meet consumer expectations in a digital world, organizations need to build digital capabilities from the foundation as opposed to simply digitizing current outdated processes.”(6)

Choosing the right online account opening solution

In an aggressively competitive industry, technology partnerships are more important than ever. Financial institutions are under constant pressure to make account opening faster, easier, and fewer steps. And while the digital user experience must get simpler, identity verification and Know Your Customer (KYC) capabilities must be highly sophisticated. That’s where partnering with a fintech that specializes in digital account opening can deliver significant value.

Primary things to look for in a solution are speed and simplicity. Apple® set a new standard when they launched the Apple Card, where people can apply, get approved, and start spending all in just a couple minutes on their phone. Even among banks that offer digital account opening, only 20% make it possible to open an account online in 5 minutes or less.(7) But that’s the bar to achieve.

“Speed, agility, accuracy are necessary to have a successful online account opening partner.”(8)

Leading digital platforms make it quick and intuitive to handle a wide range of banking needs, using clean, human-centered design. Particularly for digital account opening, growing revenue and reducing abandonment relies on enabling people to securely open a new deposit or loan account online or mobile in just a few minutes.

From a tech standpoint, organizations will also want the following capabilities:

• Instant decisioning – Deliver immediate approvals for qualified applicants, and onboard them quickly, powered by built-in integrations with the most reliable third-party vendors.
• Robust security and KYC – Make it easy for applicants to confirm identity by uploading their photo ID, and confidently validate against ChexSystems, OFAC and other compliance services.
• Customizable interface – Own the brand experience with the ability to tailor the look, feel, and questions asked in the account application process.
• Seamless consistency – Reinforce ease and simplicity by ensuring the account opening experience is the same for both online and mobile app.

Empowering the organization beyond technology

Some industry analysts note that momentum toward online account opening is often stalled out by the culture of the branch. But adding digital capabilities isn’t about taking work away from employees. It’s about adding more value for customers. Instead of a 20-minute branch process, they can open an account digitally in 3-5 minutes. That frees up employees to focus on engaging customers to explore other products and services that best fit their needs.

Consider the impact across hundreds or thousands of customers. As a senior executive of Suffolk Federal Credit Union put it, “That’s an astounding amount of time that you can add value, and start to bring in more cross-sell, retention and acquisition efforts.”(9)

Speeding time-to-market with Bankjoy

Online account opening is a sophisticated capability, but it’s not out of reach for community and regional banks and credit unions. Partnering with us makes it possible. Our innovative digital banking platform has helped dozens of financial institutions rapidly roll out compelling digital experiences that attract more customers and win brand loyalty.

Ready to get on the fast track?  Contact us to request a demo.

Sources:

1,4      US Account Opening Benchmark 2022, Insider Intelligence, July 2022

2         PwC’s 2021 Digital Banking Consumer Survey, PWC, 2021

3         Digital Account Opening in 2022: Top trends & banks prioritizing the digital experience, Insider Intelligence, Feb 2022

5,8,9   Step into 2022 Today with Digital Account Opening, Newgen, 2021

6,7      Digital Account Opening: Hot Trend, But Kinks Hinder Speed, The Financial Brand, Aug 2020