Customer acquisition and retention are essential to the success of any business, including banks and credit unions. Unfortunately, getting new customers to sign up for accounts poses several challenges. On the one hand, fewer and fewer customers are willing to go to a bank or credit union in person to set up their accounts. On the other hand, most financial institutions have yet to implement effective digital account onboarding solutions. Customers may start an application online, but less than half may finish them. Research shows that as many as two-thirds of online forms end up being abandoned.
Why aren’t customers completing the account opening process, and what can you do about it? Most institutions’ current technologies aren’t meeting customers’ expectations for a fully digital experience, but more efficient solutions are available.
Banking Goes Digital
For the past decade, mobile and digital-centric ways of doing business have been steadily outcompeting more analog methods such as mail, telephone, or face-to-face. The lockdown measures and social distancing mandates imposed by the COVID-19 pandemic only accelerated these trends in early 2020. Customers increasingly want to be able to perform their tasks and errands from the comfort of their own homes, including their banking.
In 2020, more than half of customer-bank transactions were conducted over mobile apps or websites. Even as lockdowns have eased and most institutions have reopened for in-person business, many customers have found they prefer remote and digital solutions. Many are willing to trade their former loyalties for new companies that offer more comprehensive, efficient digital solutions. When surveyed, almost three-quarters of millennials said they would switch to a different bank if it offered a better mobile experience than their current financial institution.
Traditionally, if a customer wanted to open a bank account, they would have to go into their local branch location, fill out paperwork, and provide the bank with documentation proving their identity. Now, customers want to be able to open their accounts digitally. Still, banks struggle to find digital account opening solutions that offer the necessary security measures while providing customers the seamless experience they are after.
Why Customers Abandon Applications
In a Lightico study, 40% of millennials who had started a bank account application abandoned it before completion. When these individuals were asked why they gave up on the process, they described the experience as too time-consuming. Either there were too many steps to verify their identity, or the form had too many questions that made it difficult to fill out on a mobile device.
One of the big draws of digital solutions to consumers is that they are quicker and more efficient than traditional solutions. If your bank’s digital application takes just as much time and effort as a paper application, customers are more likely to leave without finishing. Hybrid solutions are not a suitable alternative to a fully digital experience, yet some banks still require customers to come into a branch to complete the application process they’ve started online. Inefficient, cumbersome digital account onboarding processes lead to higher abandonment rates and cause customer acquisition metrics to stagnate.
How does digital account onboarding increase application completion
Digital account onboarding, done right, makes applying for a bank account more convenient for your customers. Applications that can be completed in just a few minutes from the comfort of home and are mobile-friendly are less likely to be left unfinished.
The Digital Onboarding Solutions You Need
Your digital onboarding solution must meet customer expectations for speed, simplicity, and intuitive design. Ten minutes is far too long for today’s digitally focused customers to spend trying to fill out an application for your institution; at a maximum, you can expect to hold their attention for about 5 minutes.
An effective onboarding process should take three to five minutes to complete. Here are the primary things to consider when creating your online onboarding process:
- Focus on reducing friction for your customers.
- Limit the number of keystrokes it takes to fill out each question field.
- Make it quick and easy for customers to upload any supporting documents.
- Incorporate biometric verification where you can.
- Design a user-friendly application for use on mobile devices. And, remember that mobile-responsive designs need to be more streamlined than their browser-based counterparts.
IgniteConnex is a cost-effective and time-saving digital account onboarding system for banks, credit unions, and other financial institutions. Our advanced software minimizes friction to maximize speed without compromising security. If your bank is seeing digital applications get abandoned at an undesirable rate, we can equip you with the technology you need to achieve your customer acquisition goals and grow your business.
- Customers prefer digital solutions in all areas of life, including banking.
- Many digital account onboarding solutions banks use are not optimized for customer experience.
- A lengthy and time-consuming application process can cause almost half of customers to abandon their applications.
- IgniteConnex offers high-speed, low-friction, secure account opening solutions for digital banking.
Ready to see your application completion rates skyrocket? Schedule a discovery call with IgniteConnex today.
Join us on social media to stay up to date on banking technology, executive insights and industry news.