Historically, the traditional bank and credit union have struggled to stay ahead of the fintech world's advances in consumer digital accessibility. It is more important today than ever before to offer a mobile "front door" for account opening that will meet and exceed the needs of today's consumer; otherwise, the risk of losing high-value account holders may be too great.
Why you? Why now?
In the ever-changing financial services landscape, there are some major drivers contributing to the move towards a comprehensive, integrated and easy-to-use account opening process.
The competition is as fierce as ever
Financial institutions like USAA and Navy Federal Credit Union were some of the first to offer mobile account opening. These larger financial institutions understand that what used to stand out to account holders may no longer foot the bill. Specifically, for smaller and mid-sized financial institutions, a digitally competitive presence can help to mitigate the impact these large institutions have had on the rest of the industry.
A digital world
Smartphone adoption has grown rapidly in the United States. Today, 68% of adults in the United States own smartphones. This is up from 35% in 2011, according to statistics published in "8 Conversations Shaping Technology", on March 10, 2016 by the Pew Research Center.
Sticky consumer base
By providing a seamless and accessible digital channel, the banking industry is able to develop and maintain a sticky consumer base with products that draw in consumers. Checking accounts are central to an account holder’s relationship with their primary financial institution. Once consumers come through that mobile front door, these additional products will secure their stay and grow a financial institution’s consumer base.
Cross-sell for portfolio growth
An added benefit is that once new consumers have joined your institution through the account opening process, the potential for cross-sell and relationship growth through credit offers is a good strategy to make a lasting impact on your financial institution's portfolio.
Inevitability there will be challenges for any financial services institution when looking to begin or expand their digital account opening footprint. Specific key items should be considered when evaluating a mobile solution that will provide and enhance the account opening process.
Taking a mobile first approach will help create a platform that remains simple to consumers while easy to maintain for the financial institution. So what is in a mobile-first design?
Flexible technology that will allow the administrators to change fields, instruction text, application flow and incorporate new regulations easily without interference from the vendor.
Mobile capture capabilities are key to allow for camera upload. Items such as identity verification and other specific conditions should be easily satisfied from a consumer's camera.
Digital document signing ceremonies can allow for straight through processing and help to avoid a large number of abandoned applications.
Mobile funding options that provide a direct integration and secure method for account funding will allow the consumer to easily fund their new accounts within the application process.
Compliance and regulations
As we all know, "get to know your customer" integrations with compliance and authentication checks are an important step in the account opening process. Technology with the right integrations, or an open application programming interface, allows financial institutions to meet requirements of the Bank Secrecy Act (Anti-Money Laundering) and USA PATRIOT Act (Know Your Customer).
In today's world, consumers expect simplicity and ease. In order to avoid abandoned applications, yu must reduce data entry by using modern technology. Optical character recognition (OCR) is making its mark in the financial services industry and can greatly reduce data entry and in turn decrease the abandonment rate.
According to a white paper published by the FDIC, "Assessing the Economic Inclusion Potential of Mobile Financial Services", consumers that want or need to use mobile banking as their primary banking method could benefit from this technology as mobile banking offerings evolve and incorporate even more features and functionalities.
Source: FDIC, 2014, “Assessing the Economic Inclusion Potential of Mobile Financial Services”
The key challenges presented when incorporating a mobile account opening process as addressed in this blog can be mitigated by delivering technology to support enhanced consumerism. In this new digital world, winning and retaining account holders hinges on creating value for them that enhances the convenience and quality of their everyday lives beyond mere transactions. By providing an easy to use mobile account opening process you can remove the friction and open the front door for a lastingrelationship.