While digital bank account opening options have increased due to COVID-19, online and mobile processes remain cumbersome.
Almost overnight, the migration from physical stores to computers and mobile devices increased exponentially in every industry as people decided they can do almost any activity safely from their home or their mobile device. In an effort to simplify daily lives that have become increasingly challenging, consumers wanted to complete virtually any task quickly and on the channel of their choice.
The shift to digital has not just been for Millennials either. The COVID-19 crisis has empowered consumers of all ages to become more digitally adept. For financial institutions not able to provide an end-to-end digital experience, portfolio growth has suffered. Alternatively, the largest financial organizations are gaining market share and getting the highest customer satisfaction ratings.
With the onset of the pandemic, consumers were no longer able to visit a branch to open a new account. While the the majority of financial institutions stated consumers could open new checking accounts digitally, the reality was that people who wanted to complete the process still needed to visit a branch. In other words, those financial institutions that were “faking digital” had the dilemma of not being able to open new accounts.
The good news is that while there are still many organizations that cannot support digital account opening, the incidence is far less than in the past. According to research by the Digital Banking Report, the percentage of institutions that offer online/website and mobile new checking account opening has reached 82% and 38%, respectively, compared to 76% and 34% in 2019 and 66% and 18% in 2017.
Interestingly, the percentage of banks with over $50 billion in assets offering online/website new account opening is actually lower than the industry average (75% vs. industry average of 82%) while the offering of mobile account opening significantly eclipses the industry average (50% vs. 38% industry average). This indicates an emphasis on the mobile channel as opposed to online capabilities.
‘Faking Digital’ Decreasing
In the Digital Banking Report research, 72% of the institutions surveyed indicated that the entire online/website account opening can be done without coming into the branch. This compares with 61% in 2019 and only 48% in 2017. While historical evidence shows that many institutions do not follow through with their “plan to do next year,” we believe the impact of COVID-19 will result in another significant increase in end-to-end online/website account opening over the next 12 months.
Not surprisingly, the number of financial institutions that provide end-to-end checking account opening with a mobile device in 2020 (40%) is far lower than those who could provide an online/website account opening opening. Despite this rather anemic number, there is a modest improvement over the percentage of organizations that could provide end-to-end mobile opening in 2019 (35%) and far better than in 2017 (24%).
It is still surprising, however, that over 25% of institutions indicated that they either had no plans to offer end-to-end mobile account opening or had plans three years out. Given the importance of mobile devices in a consumer’s life, this appears to be a missed opportunity.
As we have emphasized continuously, if you allow consumers to initiate the process online or on a mobile device, but still require a branch visit for signatures, documentation, ID verification or funding, the process does not have the customer experience as a priority. More importantly, as more…
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