How good is your bank’s online account opening process?
Many banks don’t know where to begin looking for the answer to that question and struggle to make impactful investments to improve their digital growth. Assessing the robustness of the bank’s online account opening strategy and reporting capabilities is a crucial first step toward improving and strengthening the experience. To get a pulse on the institution’s ability to effectively open accounts digitally, we suggest starting with a simple checklist of questions.
These key indicators can provide better transparency into the health of the online account opening process, clarity around where the bank is excelling, and insight into the areas that need development.
Signs of healthy digital account opening:
1. Visitor-to-Applicant Conversion
The ratio of visits to applications started measures the bank’s ability to make a good first impression with customers. If your bank experiences a high volume of traffic but a low rate of applications, something is making your institution unappealing.
Your focus should shift to conversion. Look at the account opening site through the eyes of a potential new customer to identify areas that are confusing or distract from starting an application. Counting the number of clicks it takes to start an online application is a quick way to evaluate your marketing site’s ability to convert visitors.
2. Application Start-to-Completion
On average, 51% of all online applications for deposit accounts are abandoned before completion. It’s key to have a frictionless digital account opening process and ensure that the mobile option is as equally accessible and intuitive as its web counterpart.
If your institution is seeing high abandonment rates, something is happening to turn enthusiasm into discouragement. Identifying pain points will reveal necessary user flow improvements that can make the overall experience faster and more satisfying, which should translate into a greater percentage of completed applications.
3. Resume Rate on Abandoned Applications
The probability that a customer will restart an online application they’ve abandoned drastically decreases as more time passes. You can assess potential customers’ excitement about opening accounts by measuring how many resume where they left off, and the amount of time they take between sessions.
Providing a quick and intuitive experience that eliminates the friction that causes applicants to leave an application means less effort trying to get them to come back. Consider implementing automated reminders similar to the approach e-commerce brands take with abandoned shopping carts in cases where applications are left unfinished.
4. Total Time to Completion
The more time a person has to take to open an account, the more likely they’ll give up. This is something many banks still struggle with: 80% of banks say it takes longer than five minutes to open an account online, and nearly 30% take longer than 10 minutes. At these lengths, the potential for abandonment is very high.
A simple way to see how customers experience your digital application process is to measure the amount of time it takes, including multi-session openings, to open an account, and then working to reduce that time by streamlining the process.
5. Percent of Funded Accounts
A key predictive factor for how active a new customer will be when opening their new account is whether they choose to initially fund their account or not. It’s imperative that financial institutions offer initial funding options that are stress-free and take minimal steps.
For example, requiring that customers verify accounts through trial deposits to link external accounts is a time-consuming process involving multiple steps that are likely to deter people from funding their accounts. Offering fast and secure methods of funding, like instant account authentication, improves the funding experience and the likelihood that new users will stay active.
6. Percent of Auto-Opened Accounts
Manual intervention from a customer service rep to verify and open accounts is time-consuming and expensive. Even with some automation, an overzealous flagging process can create bottlenecks that forces applicants wait longer and bogs down back-office teams with manual review.
Financial institutions should look at the amount of manual review their accounts need, how much time is spent on flagged applications, and the number of bad actor accounts actually being filtered out. Ideally, new online accounts should be automatically opened on the core without any manual intervention-something that banks can accomplish using powerful non-document based verification methods.
7. Fraud Rate Over Time
A high percentage of opened accounts displaying alarming behavior means there may be a weakness in your account opening process that fraudsters are exploiting. To assess your bank’s ability to catch fraud, measure how many approved accounts turn out to be fraudulent and how long it takes for those accounts to start behaving badly.
The most important thing for financial institutions to do is to make sure they can detect fraudulent activity early. Using multiple verification processes is a great way to filter out fraudulent account applications at the outset and avoid headaches and losses later.