The Business Case for Digital Account Opening
Written by Jeanne Moore
When it comes to upgrading or installing new technologies and solutions, the question your business always has to ask is whether the amount of time and money put into the new project will cost more than the new revenue generated. If the result is money lost, then it was a wasted venture.
Money made in relation to the money spent on new technologies, projects, or labor is called the return on investment, or ROI. A large return on investment can mean exponential growth for your company, while a negative ROI can spell disaster. If questions about the potential ROI are what is stopping your financial institution from making the transition to digital account opening solutions, it’s time to put your worries aside. Studies and evidence from banking companies across the country have consistently shown that the potential return on investment from digital account opening technologies is well worth the time and money invested into the transition process.
What is the ROI of investing in digital account opening solutions?
Investing in digital account opening technology helps you attract more customers, keeps current customers highly satisfied and engaged, and saves your financial institution money that is usually wasted performing manual tasks.
Attract new customers who might otherwise not bank with you
Evidence points to a growing number of customers who prefer mobile banking over traditional banking. 89% of those surveyed by Insider Intelligence’s Mobile Banking Competitive Edge Study (2018) said they used mobile banking, up six points from the previous year. That included 97% of millennials and 91% of Gen Z, the majority of the future customer base in the next decades. The study also indicated that 64% of mobile users said they would research a bank’s mobile offerings before they opened an account and more than half said they would change banks if their current institution’s mobile experience didn’t stack up.
Offering a robust and user-friendly mobile experience can help your institution stand out in a crowded market. If you can build a reputation for offering an enhanced, digital-first banking experience, former loyal customers of other banks or interested applicants who have never heard of you before may be persuaded to open accounts. More accounts mean more deposits and more revenue for your institution.
Keep new customers engaged
Research has shown that a user whose account was automatically approved is five times more valuable to your institution than a user who was manually approved. Your customer’s enthusiasm for banking with you will never be higher than the moment they decide to open an account. The faster you can get them from that moment to depositing money, the more sustained that engagement becomes. If they are placed through a manual review queue and not approved until a day later, they are no longer as excited and are likely to deposit a smaller amount of money.
Digital-first application processes, especially ones effectively designed to minimize friction, can have a new account opened within minutes of the customer deciding to start an application.
Save money on manual review processes
If you have a real person reviewing and approving applications, you have to pay them a salary to do so and pay for the resources that enable them to do that job. Manual review processes take longer than automatic ones, and as the saying goes: in business, time is money.
Digital account opening technologies rely on artificial intelligence and machine learning to vet and approve applicants automatically without the need for human interference. Computers and algorithms are far less likely to make mistakes than human beings, and in the financial industry, mistakes can end up costing your institution big.
The benefits of digital solutions
While you need to invest money in order to implement a digital account opening technology into your current system, you will end up saving much more in the long run. How much money will you save? If financial institutions automate as little as 7% of all their operations, they could save between $4 billion to $12 billion.
- Potential return on investment is a key factor in most business decisions
- Implementing digital-first banking solutions offers a large ROI for financial institutions.
- Digital account opening technologies rely on artificial intelligence and machine learning to vet and approve applicants automatically without the need for human interference.
- Offering a robust and user-friendly mobile experience can help your institution stand out in a crowded market.
- Offering a seamless digital account opening project attracts new customers, keeps customers engaged, and saves you money on internal operations.
Unsure where to start when it comes to your bank’s digital transformation?
Start where your customers start—the account opening process. This is the best way to make a great digital first impression with customers and earn their engagement and loyalty from day one. IgniteConnex was designed by bankers for bankers to make your financial institution’s account opening processes as straightforward and user-friendly as possible. Our digital account opening solutions leverage your institution’s legacy systems to ensure a speedy, efficient implementation process.
With IgniteConnex, you can offer your customers a secure, low-friction application process. To learn more, Schedule a Demo with our team today.
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