“If you are shopping on the net, why would you take that information and waste time going to a physical branch to open the account?” says Derek Corcoran, chief experience officer of Avoka, a company that helps banks make online applications easier.
For many people, this is a no-brainer, but it’s reasonable to feel a bit of trepidation. Is opening a bank account online safe? What if I have questions along the way? What if I don’t have all the documents I need right at that moment, will I have to start the whole process over again?
The reality is that banks have struggled to answer these questions themselves.
The struggle is real
Banks have gotten pretty good at offering digital banking products that customers like. In fact, a recent Bankrate survey found that 29 percent of respondents thought their finance-related apps were better than the universe of other apps they use.
But finance apps have mostly been for existing customers, with fewer options for people looking to establish new relationships. A 2017 study by Avoka found that only 43 percent of all personal banking products can be applied for digitally (The survey looked at banks in North America, Europe and Australia).
Online banking has been around since the 1990s and mobile banking is about a decade old, so what gives?
A major component is legacy technology. Banks are not set up to appeal to these users right now. Also, authentication is a major challenge. Know your customer laws and regulations set the bar really high—banks have to make sure you are who you say you are.
Should I cut my bank some slack?
No, you shouldn’t. If well-made, easy to use digital tools are important to you, your bank should wow you on first blush. If it doesn’t, maybe it’s not the bank for you.
“When you look at the account opening experience, you should see it as a harbinger of what it is like to work with the bank,” says David Eads, CEO of Gro Solutions, which also helps banks improve digital sales.
Technology has reached the point where the heavy-lifting of validating your identity should largely happen behind the scenes. This type of security ranges from cross-referencing the information you enter against databases to making sure that the IP address on your computer isn’t in Russia.
Banks have the ability to make the account opening process really simple. They often brag about their achievements in clicks or pages, namely how they’ve reduced the number of clicks or pages you need to wade through to open your account.
“Consumers want their account opening to be easy and secure, and it should never feel like either is being compromised,” says Katie Jenkins, head of customer experience for HSBC in the U.S. “There are multiple tools we can use to validate the user’s identity behind the scenes that shouldn’t get in the way of it being a slick and safe journey for the consumer.”
Digital banking refers to banking both online and on mobile devices. The burgeoning voice banking realm—Alexa, what’s my balance?—is often lumped in digital, too.
If the ability to apply for a new checking account or a CD digitally remains difficult, the industry really has a long way to go in mobile. Avoka’s 2017 State of Digital Sales in Banking survey found that in North America, only 24 percent of bank account and loan products could be opened on mobile devices.
However, in many ways, authentication tools are much more dynamic on mobile. They largely depend on camera technology. You can snap a photo of your driver’s license and have an app automatically fill out basic information. Some banks, like BBVA in Spain, are using the camera to authenticate users via selfie and video chat.
Mobile is increasingly viewed as the heart of the banking relationship today since it plays such an essential role in our lives. Banks have a vested interest in rising to this challenge quickly.
“How we shop, how we meet people—mobile is now at the heart of how we do things,” Jenkins says.
Who you gonna call?
One of the challenges of opening a digital account is that many customers feel like they’re on their own. Imagine that you are set to open a new savings account, but you realize you don’t have a document or maybe you don’t quite understand one of the questions being asked in the application. What do you do?
This is another area where banks are furiously working to improve. One side of the equation is making it very easy to have a question answered quickly. Several banks feature live chat with either humans or bots, who message with users as they navigate the application process.
Pulling back for a moment, consider the banking buzzword omnichannel. Customers don’t think of a bank’s mobile app, website, call center and branches as separate things. But from a technology perspective, they often are.
Omnichannel means banks provide simple, unified solutions for customers: When you hit a snag trying to open a checking account via mobile, you can click a button to talk to someone in a call center who can see your application in front of them. But let’s say you have to run to an appointment, so you save your progress and revisit it on your desktop later. You visit a branch the next day to fund the account and the banking app tells the branch you’ve arrived and that you’ve recently opened a new checking account. With omnichannel, the idea is that all the separate parts of a bank operation work in unison.
Indeed, Aite research found that 36 percent of accounts opened in branches started on digital channels. That number represents only the people who followed up and went to a branch. The number of people who abandoned the application entirely is likely much, much higher.
“Abandonment rates are really quite high,” says David Albertazzi, an analyst at research firm Aite. “Banks need to find ways to reduce friction, and they can do that by being better at providing interactive digital assistance and providing well-thought-out technology, rather than just paper forms they put online.”
Things you can do
Banks have plenty of room to improve the digital experience, but there are things you should do, too.
Have the documents you think you’ll need handy, including your driver’s license. Make sure your computer or device is up to date and you’re not using public wifi. While the process should be secure on the bank’s side, you don’t want it to be compromised on your side.
Check that you’re on the bank’s website. If you’re responding to an email promotion, check to see if it is a phishing attempt. When in doubt, visit the bank’s website directly.
If the bank needs additional documents, only communicate through a secure channel. Banks will often set one up for you if they need additional items.