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Online Account Opening Best Practice Metrics for Banks

Temenos – Company

Many banks have stated goals of driving revenue and customer acquisition over digital or online channels, but few have taken a scientific approach to measure the process that adds up to a competitive digital offering.  Because they are starting with an existing banking process flow and undertaking a huge and often unrealistic task of an entire back-office overhaul, the executives and team members never step back and look at quantifiable metrics that indicate a bank’s success in converting prospects to customers, driving revenue, and staying ahead of the competition. In this online account opening best practices guide, we’ll walk through the strategies that banks can implement in order to drive more digital sales by improving multichannel account opening.

Analysis of the shift to online account opening should include a look at three areas:

  1. Measuring an outstanding, memorable user experience
  2. Maximizing the value of acquired customers
  3. Responding to market opportunities

My post describes key metrics that can be used to evaluate success in each of these interconnected areas.

I.  Measuring the Success of the User Experience

Marketing works hard, or at least spends a lot of money, making prospects aware of the banking products and enticing them to “buy”, or apply online.  Whether they are new prospects or existing customers targeted for a cross-sell, there are established marketing systems to measure prospect response rates, email opens, and click-through.   But every time a prospect clicks to “Apply” for a deposit, loan or card account and then does not “Submit” a valid application that meets bank approval, the marketing investment is wasted.   The key is to watch the rate of completed applications.   Forrester studies place completion around 30% for deposit, and 10% for loan applications.

Is your bank successful in creating a user experience that draws more prospects to convert into customers as opposed to abandoning? Three metrics to track will help answer the question: “Do your prospects like the experience of buying your product?”

METRIC 1: % COMPLETIONS.  This is the desired opposite of abandonment.

% completions = Number of submitted applications / Number of started applications

No bank gets more than 60% completions, and it is rare to see greater than 50%. In the split between desktop and mobile devices, mobile typically has an even lower rate of completion. The expected completion rate for desktop PCs is higher. Ideally, you should be able to track the results individually for PC, tablet and phone devices.    Use the guidelines below to give you an idea of how you are doing.

> 50%ExcellentGoodOutstanding
30% – 50%Room for improvementShould be higherBetter than most
< 30%Wasted opportunityProblematicIn need of improvement

Prospects abandon a started application for many reasons, but most situations point back to a customer experience that is too complex, has too many steps, takes too long, or requires information not readily available. What makes a simple or frictionless experience is a separate topic, but before you can embark on improving it, you must be in a position to measure the success at each step of the way.

The importance of the completion percentage becomes apparent over time, as the number of lost potential customers grows. Measuring and minimizing the gap of abandoned customers is the first important step in measuring the success of your customer experience.

Completion Gap

online account opening best practices

METRIC 2: RESUME % RATE.  Customer success in completing an interrupted application.

% Resume Rate = Successful resumptions / Incomplete applications

Driving down into more detail on Completion Rates leads to an important metric on the bank’s ability to serve digital customers:  the rates for successful save and resume applications.   Frequently, a bank multichannel account opening application is not resolved in one session but is split across multiple sessions or devices.  Reasons vary from the need to gather more information, interruptions in a long application, or necessity of involving a branch or call center in the process.  The longer the application, the more likely it is dropped before completion. So the question becomes “how successful are we in resuming the application later?”

Obviously, the first question is whether the bank has the ability to Save and Resume later, either automatically saving or with some action by the prospect.   Assuming this best practice capability is in place, this measures the critical ability to salvage and convert a prospect who showed a direct intent to become a customer.  Given the range of reasons to interrupt a digital sale, a successful digital banking customer acquisition program will have the ability to maximize these completions.

Save and Resume

Chart 2

The chart shows the impact of the Save and Resume statistic, beginning with no ability to resume saved or interrupted applications, and a complete loss of all of these near-customer acquisitions.   Following the introduction and tracking of a resume function, the number of salvaged prospects begins to rise to a significant proportion of the interrupted applications. These are a pure upside – saved digital customers who otherwise would not be converted.

METRIC 3: TIME TO COMPLETE.  How long and hard do your prospects have to work to become a customer?

Time to Complete (TTC) = average time for a successful digital application submission.

This is a simple metric but a telling one.  With each additional minute and extra field to complete the account opening, the number of completed applications falls significantly.  Most banks attempt to gather a complete set of data, some of it not absolutely necessary at the time of initial account application.  Knowing how long your prospects actually must spend answering questions, and continually working to reduce this number, goes a long way to improving digital customer acquisition success.

Time to Complete

Chart 3

There are no hard and fast rules on time to complete, as it widely varies with the type of financial product.   Deposits are significantly shorter processes than loans, and the larger the loan commitment, the longer the process.   But in general, watching this statistic for a specific product, and continually working to shorten it, will result in higher completion and a minimizing of the Completion Gap discussed in the first section.

II.  Maximize Value of Digital Customer Acquisitions

The metrics in the first section focus on the goal of completing applications and acquiring customers.  The next important question is understanding the value of those customers in economic terms.  Simply, what are the first year and lifetime revenue expected from an acquired customer?   And once you have the ability to measure this, are you able to influence and increase the value of each acquisition?

The most basic metric to utilize is the number of products that a customer utilizes through their lifecycle.  Opening a small deposit account and never progressing beyond the single account is a money loser.  On the other hand, moving from a deposit account to credit card, line of credit, auto loans or investments is a high-value long term relationship.


Average Number of products per Customer at account opening and after one year

Measuring the profitability of a single customer may be difficult, but a reasonable proxy is measuring the number of products initially enrolled and the number in use after a full year.   Very important is growth during that period.  While a loss leader deposit account may be acceptable to start, at some point, the number of financial products in use needs to rise.

Cross-selling at the time of initial sale or upsell is a key capability.  If the initial application allows the customer to choose from a menu of multiple services, all within the same multichannel account opening exercise, the chances of cross-selling are much higher.

Active Accounts Over Customer Life Cycle

Chart 4

III.  Responding to Market Opportunities

Meeting long term customer acquisition goals for a bank requires identifying and capturing market opportunities while staying ahead of the competition.  Beyond the individual experience of a customer is the question of how quickly and effectively can a bank respond to market changes.  In a world of specialized products for highly segmented target audiences, being able to launch a new bank customer acquisition program faster than the competition means getting the largest part of the market share.


Launch Time Months = Date of Market Launch – Date of Project Approved

The measure here reflects the organizational agility required to launch and deliver a new customer offer across all sales channels.  Most important today are the digital channels because that is where customers first engage with the new offering and where the fastest moving prospects direct their buying activity.

Revenue Gap Can Never Be Filled

Chart 5

Think of this as opportunity cost.  For every month of delay, a portion of the customer base chooses an alternative product and become inaccessible.  As time goes on, the lost revenue from these missing customers accumulates and creates a revenue gap that grows over time, never to be filled.   Every month of delay translates into permanently lost revenue.

For the best organizations, Launch Time is 3 months or less.  Depending on the urgency of the organization, and the willingness to avoid unnecessary internal complexity, this is reasonable in our experience.

< 3 MonthsAgile, customer-centric
3 – 9 MonthsMotivated but with room for improvement
9+ MonthsProcess-centric, not customer focused; inadequate for digital market

Of course, these estimates are generalized based on the scope and complexity of the project, but in our experience, the key is to limit the scope and complexity.

If the business unit or marketing department identifies a great target segment to offer a loan refinance, real estate offer, or affinity credit card, why does it typically take years for the product to become reality?  The answer often lies in the desire to achieve two objectives simultaneously – launch a program to acquire more customers (Drive Revenue) and streamline the back office process (Cut Costs).

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Temenos – Company