Implementing a digital bank account opening solution at your financial institution is no longer just a nice option to offer your customers but a necessity if you want your institution to thrive. Studies show that institutions that made digital onboarding available to their customers experienced market growth of 16%. In contrast, institutions that did not offer robust digital options saw their revenue growth decreased by 9% year over year.
Digital bank account opening solutions make opening an account quick and easy. That way, customers are more likely to engage with your financial institution, and you can experience lower application abandonment rates overall. To make the account opening process simple for your customers, it’s up to you to build a secure, user-friendly system that fully integrates with your institution’s existing technology. Here are four challenges you may face when implementing new digital bank account opening technology and how IgniteConnex can help you overcome them.
1. Meeting Security and Privacy Standards
Customers trust you to protect their money from hackers and potential fraud. This means your institution needs to verify that the person opening a new account is who they say they are and validate that the same person is accessing the account each time a new transaction occurs.
During the in-person onboarding process, you would have the customer present documentation proving their identity and then provide them with a PIN or other input key so they can access their account. Unfortunately, traditional account opening methods that require customers to travel to the bank or financial institution can slow down your application process. Offering digital bank account opening solutions can increase account opening metrics for your business.
IgniteConnex is a digital bank account opening solution that can make the identity verification process quick and simple for your customers. We integrate with a number of authentication databases that reliably verify and validate applicants’ identities in just moments, so you can quickly open accounts without fear of fraud.
2. Lengthy Application Processes
Building a digital onboarding system is more than just uploading the forms from your in-person application process into an app; the overall process can be streamlined to take less than 10 minutes and ideally less than 5. Any longer than that and around 40% of applicants will abandon the process.
Long forms that ask customers for a lot of information or an identity verification system that requires them to upload documents and then wait for manual approval can slow down the onboarding process and drive customers away.
IgniteConnex provides a streamlined account opening solution that collects only the information you absolutely need from your customers to ensure a quick and secure process. Using IgniteConnex technology, you can set your customers up with a new account in only a few minutes, giving you a competitive advantage and posing your institution for more sophisticated growth.
3. Customers Can’t Continue the Application
Sometimes, circumstances might prevent customers from finishing their account application in one session, or the customer might have a question that requires an in-person visit or phone call to your branch location. When an application has already been initiated on their mobile device, it is incredibly frustrating to arrive at your in-person location for help and find that they have to start a whole new application.
What is omnichannel account opening and why is it crucial?
Omnichannel account opening is when a customer starts the account application process in one channel, like over the phone or online, and then finishes through another medium, such as in person. This decreases application abandonment by allowing customers to ask questions or seek guidance and then return to the application where they left off instead of starting over again.
IgniteConnex integrates with your legacy systems so that customers can access their application without having to start the application from the beginning again. This addresses the customer need and can act as a feature to increase account openings over time.
4. A Digital Onboarding Interface That Is Difficult to Navigate
The appeal of digital bank account opening for your customers is that it should be quicker and easier than in-person or legacy systems. However, if your application system is challenging to navigate or confusing for your customers, you lose that advantage. Remember that you want your customers to set up their new account in around five minutes, so you don’t have time for them to be confused about what the application is asking for or have to stop and look up answers.
Typing large amounts of information on a smartphone keyboard is tedious, so enabling automatic data entry and short answers whenever possible can make account opening via mobile a more pleasant experience.
IgniteConnex is a scalable digital bank account opening solution designed by bankers for bankers. Our technology prioritizes high-speed and low friction with an excellent user experience to make opening a new account painless for your customers and help your institution bring in more revenue.
- Implementing a digital bank account opening process is essential but poses challenges for your institution.
- Typical identity verification processes that ensure security is time-consuming and more likely to lead to abandoned applications.
- The ability to revisit in-progress applications can increase account open rates over time.
- IgniteConnex combines security for your institution with a quick, easy user experience for your customers so you can see real financial growth.
Choosing The Best Digital Bank Account Opening Solution
IgniteConnex provides the most secure, user-friendly digital bank account opening technologies designed by bankers for bankers. We can help kickstart financial institutions’ digital transformation by enhancing the account opening experience and approval process for new customers. Access a cost-effective digital onboarding solution that can offer your financial institution enhanced security, a good return on investment, and scalable growth. Schedule a Demo to learn more!
The banking industry is rapidly changing, and it is easier than ever to get left behind as your competition quickly adapts to new digital trends. The way customers have chosen to deposit their money has shifted over the past several years. Customers aim to open fewer bank accounts with the goal of leaving money untouched to accrue interest. More and more customers are opening low-maintenance checking accounts used for transaction purposes and changing the demand for deposit pricing and sales based on interest rates.
As the federal funds rate has increased in recent months, banks and lenders are keeping an eye on their deposit strategies for the new year to maximize their deposits strategy.
How is your bank incentivizing deposits?
Deposits are a vital revenue stream for your bank, and transactional accounts offer little incentive for your customers to leave their money with your financial institution instead of spending it elsewhere.
A successful bank management strategy should entice customers to deposit more than they withdraw, which remains highly dependent on your deposit pricing and sales strategies in times of fluctuating rates.
What Do Treasury Yields Have to Do with It?
Let’s go back to the basics! Treasury yields are directly related to the interest rate banks may charge on loans, where banks can pay and accrue interest. Customers can either open interest-bearing accounts or non-interest-bearing accounts. Interest-bearing accounts may require a minimum deposit or charge penalties if too many withdrawals are made.
Non-interest-bearing accounts usually come with fewer restrictions, but customers also don’t earn anything back. Customers with non-interest-bearing accounts may also face fees or penalties for overdrawing their accounts, using an ATM, or purchasing cheques.
As you know, the money deposited in banks doesn’t just sit in a vault untouched. Although banks are required to keep enough cash on hand for fulfilling withdrawals, they also make investments with the money customers have deposited. One such investment is loaning money to other customers through mortgages, student loans, business loans, and more. Customers then repay the loan with interest—meaning the bank gets paid more than it gave out.
While banks usually set a fixed, low rate on the interest your account can earn, oftentimes economic factors will switch their strategy. The treasury yield curve inversion this year has led to some uncertainty around deposit and sale strategies in 2023.
With the federal funds rate set at its highest since the 1980s—meaning the interest you can charge on loans is even higher, consumers are disincentivized toward long-term investments. New deposit pricing and sales strategies can help adjust to the current economic climate and help customers choose to leave their money with your institution.
Deposit Pricing and Bank Profits
Banks make a profit by charging more interest on loans than they offer in interest on savings accounts. However, to have enough capital to issue loans, banks need their customers to deposit more than they withdraw. The fewer deposits banks have on hand, the fewer loans they can give out.
Deposit pricing is setting the rate for interest earned on savings accounts. The interest rate must be high enough to encourage customers not to withdraw their money but low enough that there is a decent margin between it and the interest you charge on loans. Set deposit pricing too low, and customers will have no reason not to make regular withdrawals, and you’ll be able to issue fewer loans. Set it too high, and you cut into the profit you make off each loan.
The Future of Banking: Digital Account Opening Solutions
How does digital account opening help?
Digital account opening encourages more deposits into your bank. Customers can open additional saving and interest-bearing accounts, make their initial deposit, and see any other offers they may qualify for as part of your deposit pricing and sales strategy.
Once you set your deposit pricing, your next goal is to get customers—new and old—to take advantage of it. Digital account opening solutions make it easy for customers to open a new account and make a deposit in just a few minutes. Your digital onboarding program can also allow customers to purchase cheques or other services as they set up an account, bringing another source of revenue into your financial institution.
- Fewer customers are leaving their deposits in the bank to accrue interest.
- Banks profit by charging interest on loans.
- Banks can only fund loans if they have enough deposits on hand.
- Encouraging customers to keep their money in the bank instead of withdrawing it is a delicate balancing act of setting appealing rates on interest-bearing accounts without affecting the profit margins from loan interest.
- Digital account opening technology like IgniteConnex encourages customers to set up new accounts and can effectively offer savings plans and other products right to customers when they’re most engaged.
Designed by Bankers for Banks
With IgniteConnex’s banker-designed digital account opening solution, you can encourage customers to set up new accounts and effectively offer savings plans and other products right to customers when they’re most engaged. To learn more about IgniteConnex and raise your deposit over withdrawal rates, schedule a demo with one of our representatives today.
As digital banking takes precedence over traditional brick-and-mortar services, it is important for financial institutions to prepare for the wave of digital natives entering the market known as GenZ. GenZ consumers have grown up in an entirely digital world and expect digital banking to be secure, fast, and convenient. To meet this need, financial institutions must modernize their digital transaction capabilities and offer a personal user experience that prioritizes convenience and security. Offering digital features such as digital account opening, secure digital payment options, instant account access, and 24/7 customer service, among others, can help financial institutions stay competitive with new generations.
What Instant Gratification Means for Financial Institutions
GenZ has grown up accustomed to not needing to wait to complete transactions. They have experienced an era where access to digital purchases and products is painless, instant, and happens at the click of a button. That means they will be less than thrilled to need to head to a branch or even have to download an app to open a bank account. Businesses are encouraged to focus on four experience components to attract and retain Gen Z consumers. Experiences should be instant, intuitive, convenient, and mobile. Something as simple as downloading an app is trust that needs to be earned prior to taking that sort of real estate in their devices.
The GenZ generation’s comfort with technology and need for instant gratification has caused many traditional financial models to become antiquated. To successfully cater to GenZ, financial institutions must adopt digital banking solutions that meet their demands. Current digital banking options should include digital onboarding, immediate feedback, comprehensive chat support options, a mobile-friendly app, and digital customer identification processes to ensure that they can receive financial services quickly and securely. By leveraging digital banking solutions, financial institutions can easily accommodate these digital natives’ needs for immediate access to their finances.
What Are GenZs Looking for in a Financial Institution?
GenZ users tend to look toward trusted brands to help them start their financial journey. These types of users generally prefer to bank with one institution and prefer digital or mobile interactions to in-person ones. GenZ users usually have fintech accounts, sometimes even as their primary bank. Offering a great digital account opening option is highly attractive to GenZ users, especially if it offers a seamless experience. Digital banking that keeps users from having to take extra steps to join the institution, upload documents, or manage accounts is a great way to attract new customers of this demographic.
Why is digital onboarding important to GenZ?
Within the next ten years, GenZ and Millennials, known as digital natives, are expected to account for over 58% of the workforce – this means they are on the way to becoming the primary customer base of financial institutions. Digital onboarding provides comprehensive digital authentication methods that enable prospective customers to set up digital accounts without delay and easily track their assets with one click of a button. This enables GenZs to access the financial services they need no matter where they are located, providing them with a level of convenience not found in traditional banking experiences.
GenZ users are digital natives and therefore look for primarily digital banking solutions to meet their financial needs. They value ease of use, good customer service, and transparency. Financial institutions need to prioritize digital banking options that appeal to this particular demographic. These users look for real-time feedback on their money management progress and digital communication that is modern and fuss-free. Digital account opening, mobile access, and technology solutions that create an efficient and positive banking experience are very important to GenZ users. They also tend to prize community-building initiatives supported by the bank more so than traditional banking products and services. Financial institutions must recognize these attributes in order to truly engage the GenZ customer base and meet their financial needs.
- GenZ consumers have grown up in an entirely digital world and expect digital banking to be secure, fast, and convenient.
- Offering digital features such as digital account opening, secure digital payment options, instant account access, and 24/7 customer service, among others, can help financial institutions stay competitive with GenZ.
- GenZ users tend to look toward trusted brands to help them start their financial journey.
- Current digital banking options should include digital onboarding, immediate feedback, and digital customer identification processes to ensure that they are able to receive financial services quickly and securely.
- Digital onboarding provides comprehensive digital authentication methods that enable prospective customers to set up digital accounts without delay and easily track their assets with one click of a button.
Digital Bank Account Opening Solutions
IgniteConnex is a digital banking solution that’s both secure and user-friendly. Our intuitive solutions are designed by bankers with decades of experience, making them well-suited for institutions that want to digitalize their account opening process and appeal to digitally savvy users. By streamlining the new customer onboarding process, we can help financial institutions jumpstart their digital transformation journey and enhance the core customer experiences. Schedule a Demo to learn more!
The majority of consumers, about 81%, say they want more self-service options, but most businesses believe only 60% of customers would be interested. This 21% gap in understanding consumers’ needs means businesses are not focusing enough on increasing self-service options to meet demand. It’s no surprise that customers have come to expect digital-first customer self-service from their financial institutions. And fortunately, many financial institutions are rising to the challenge of the self-service revolution and taking steps to develop modern digital strategies that provide customers with streamlined service delivery, easily accessible products, and efficient digital banking platforms.
Depending on your institution’s offerings and goals, this could look like anything from automated customer service chatbots, digital onboarding solutions, or even complete digital banking platforms for both business and personal accounts. As with any digital strategy, success will depend on regular innovation, evolution, and customization to meet changing customer needs.
What is the self-service revolution?
The self-service revolution has been an ongoing digital transformation effort over the last decade, as customers increasingly have moved from face-to-face and telephone-based customer service interactions toward digital-first customer self-service models.
Top 3 Areas for Financial Institutions to Offer Better Self-Service Options
Better Chat Support Options
Chat is quickly becoming the preferred digital channel for customers of financial institutions across the globe. Despite this, only a shocking 31% of businesses offer chat as a primary digital-first customer self-service option. While this may provide short-term cost savings, there could be long-term implications of not meeting customers’ digital needs and preferences. Offering digital options like chat support is essential to meet the changing customer needs and digital expectations of financial institution customers.
An emerging channel for digital customer self-service is accessing self-service options or chat support through social media. Sadly, many are not yet offering service on this digital touchpoint due to the lack of internal resources or the fact that their digital presence is not optimized for customer support. Companies find themselves stumped by needing to provide excellent digital customer service while unable to ensure that the level of service they are providing is up to standard. It remains a challenge for many, but those who do make an effort to stay up-to-date on digital technology can certainly be rewarded down the road.
Improved Digital Account Opening Solutions
Banks and other financial institutions should prioritize digital-first customer self-service options to ensure quality and efficient service. One avenue to consider is offering digital account opening, such as digital identification and digital document scanning. This will assist customers with instant access to services without waiting in long lines or having their queries answered slowly over the phone.
Digital-first customer self-service offers numerous advantages for customers, from quick, efficient transaction processing to round-the-clock availability and enhanced security for online financial services. Banks and financial institutions that implement digital customer self-service can then focus on addressing other customer needs that can’t be addressed without a representative quickly and efficiently.
Full-Service Mobile Applications
It is increasingly important for financial institutions to provide digital-first customer self-service options via mobile. Apps offer financial services providers an ideal way to meet customers exactly where they are in their daily lives – on their phones. This digital convenience increases customer satisfaction, inspires trust and loyalty in the brand, and ultimately drives revenue.
With a full-service app, customers are granted access to a vast range of services, including the ability to open an account and even manage deposits, investments, and loans. Providing an interface that makes managing your finances easier for customers is beneficial not only for them but also for the financial institution. Having digital tools that promote convenience and reliability provides a more satisfying customer experience which will ultimately lead to positive outcomes in business growth.
- A 21% gap in understanding consumer needs means businesses are not focusing enough on increasing self-service options to meet demand.
- Customers have moved from face-to-face and telephone-based customer service interactions towards digital-first customer self-service models.
- The top 3 areas for financial institutions to offer better self-service options are customer chat support, digital onboarding solutions, and full-service mobile applications.
- An emerging channel for digital customer self-service is accessing self-service options through social media.
- With a full-service app, customers are granted access to a huge range of services, including the ability to open an account and even manage deposits, investments, and loans.
- Digital-first customer self-service offers numerous advantages for customers, from quick, efficient transaction processing to round-the-clock availability and enhanced security for online financial services.
Digital Account Opening Solution
By implementing a digital account opening solution like IgniteConnex, banks, credit unions, and other financial service providers can increase their self-service options and onboard new customers much faster. We can help your digital transformation by enhancing the account opening experience and digital onboarding process for new customers. Access a cost-effective solution that can offer your financial institution enhanced security, a good return on investment, and scalable growth. Schedule a Demo to learn more!
Technology has given us the ability to access information and services almost instantly. When Netflix started, you had to go online, select the movie you wanted to watch, and then wait for the DVD to come to your house. Now you can open the app, choose from hundreds of movies and TV show options, and start watching instantly. Can’t find what you’re looking for on Netflix? You can probably locate it on one of the dozens of other available streaming platforms and access it on your device just as quickly. This brings us to what boosts all financial institution’s margins – a user experience that is simple enough to maintain the attention of easily distracted consumers.
The ability to get what we want instantly has turned into an expectation in all areas of our lives as consumers. Opening an account using traditional banking methods is anything but instant. If your financial institution cannot offer an onboarding process that meets customer demands for instant gratification, they’ll be looking for another financial institution that can. You can boost your financial institution’s margins by offering customers a quicker, easier onboarding process through digital account opening technology.
Instant Gratification: Technology and Patience
Thanks to the internet, you can now have almost the entire wealth of human knowledge at your fingertips in seconds. Unfortunately, seconds may still be too long for some users. According to a study by UMass Amherst, most viewers will abandon an online video if it takes more than 2 seconds to load.
Ironically, our instant access to so much information has also eroded our patience for actually absorbing information. The Nielsen Norman Group found that most users leave a webpage after having only visited long enough to read about 20% of the text displayed on that page.
The nature of the internet is that if users cannot get what they’re looking for fast enough from one website, they will quickly abandon it and find a site with a better response time. This pattern has gone beyond webpage loading times and started to impact almost every aspect of life, including banking.
Customers are always looking for the fastest, most efficient, most convenient way to manage their money. If their current institution doesn’t offer what they’re looking for, they are not hesitant to switch to a bank or credit union with better, faster online options.
Online Account Opening vs. Traditional Account Opening
One of the ways to offer your customers a faster experience than other banks is by enabling them to open an account completely online. In-person account opening is something that people just don’t have time for anymore. First, they have to schedule a time to go into their local branch’s location during normal business hours. Then, they have to gather up their relevant identifying documents and bring them to the meeting. Once there, they will be asked to read and sign stacks of paperwork. The process is anything but instant.
Online account opening can boost your financial institution’s margins because it allows your customers to open an account on their schedule from any location that is convenient to them. Improving your customer’s experience doesn’t end with just offering a digital onboarding process—you need to remove as much friction from that process. If you ask them to fill out lengthy forms on their phone or provide pictures of documentation they don’t have in reach, they are more likely to abandon their application.
An excellent digital account opening solution that effectively boosts your financial institution’s margins should not just be your in-person application converted into a digital form. You need to streamline the whole process so that customers can have an open account with money in it at your institution within a matter of minutes.
Customer Satisfaction and Your Profit Margin
Speed is one of the top-three factors in ensuring customer satisfaction when it comes to online banking. Consistently satisfied customers become loyal, long-term customers, and they are more likely to recommend your institution to others.
How can a financial institution profit through instant gratification?
Today’s customers don’t want to wait for anything; they want satisfaction right now. By offering a digital onboarding process that supports instant account opening, you can entice more customers to do their banking with you.
A low-friction, user-friendly online account opening system satisfies your customers’ need for instant gratification in banking services, helps you acquire new customers, and brings more revenue, increasing your financial institution’s margins. When you generate more revenue, as long as your expenses stay the same, you increase your profit margin, and your institution experiences financial growth.
- Thanks to the internet, most customers expect instant gratification and will not accept less.
- Online account opening is far more immediate and convenient than in-person account opening.
- Online account opening needs to be as low-friction and user-friendly as possible to satisfy the need for instant gratification.
- An efficient digital onboarding process improves the completion rate of applications and brings more customers and revenue into your financial institution.
- Access to secure, user-friendly digital bank account opening technologies makes digital onboarding easy for you and your customers, so you can increase your financial institution’s margins.
The Best Digital Bank Account Opening Solution
IgniteConnex provides a secure, user-friendly digital bank account opening technology that makes digital onboarding easy for both you and your customers. We offer intuitive, secure solutions designed by bankers for banks. We can help kickstart financial institutions’ digital transformation by enhancing the account opening experience and approval process for new customers. Access a cost-effective digital onboarding solution that can offer your financial institution enhanced security, a good return on investment, and scalable growth. Schedule a Demo to learn more!
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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