5 Critical Digital Banking Innovations You Don’t Want to Ignore
70% of potential checking account applicants say they would prefer to submit a digital application over a physical one if given the choice. The good news is that while most banks offer online account opening, only 17% of the largest banks in the US, UK, and Australia offer a true mobile new account opening process.
This resulting gap means that banks have some serious work to do. Over 60% of consumer applications for auto loans, mortgages, and credit cards are now completed on smartphones or tablets. This trend will only increase as consumers come to expect their banks to support account openings on mobile devices, too. And the payoff for financial institutions that embrace digital banking innovation is huge: more revenue, improved onboarding, and better engagement for new customers.
Top Digital Banking Innovations
Here are some of the top trends related to digital banking innovation that you’ll want to understand and keep a close eye on. Ignoring them may result in falling behind competitors that embrace them.
- Digital disruptors will steal market share. Accenture believes that 35% of banks’ market share in North America could shift to new digital players by 2020. Digital banks such as Moven, Simple, GoBank, and BankMobile are already offering simple, straight-forward mobile-only account opening experiences. Traditional banks will combat this trend by offering a new distribution approach that combines a simpler, yet more comprehensive, branch offering with integrated digital services. Some larger banks may also acquire new technology startups to eliminate competition and gain access to cutting-edge technology.
- Increased focus on digital selling. The Internet has made it easy for consumers to use multiple channels to research financial products. Unfortunately, banks haven’t kept pace and are using outdated methods to market and sell to customers. Banks will need to better understand consumers’ needs including how the sales cycle has changed with the advent of digital banking innovations.
- If you’re not using mobile-first design, then don’t bother. Amazon and other savvy digital retailers understand how to create an outstanding mobile experience and their influence on your customers shouldn’t be underestimated. Consumers expect you to also offer a great mobile experience – otherwise, they’ll take their business elsewhere. The key is to realize that your customers don’t want to merely use mobile versions of your online banking applications. Those types of application aren’t optimized for a mobile experience and require too much tedious scrolling and typing. They want purpose-built forms that are designed specifically for mobile. Not sure what that would look like? Go back to #1 and check out the digital disrupters who do it so well.
- Customers want to be entertained. In a world where everything’s at their fingertips, consumers expect their digital experiences to be fast, interesting, and entertaining. This requires you to shed the banking industry’s traditionally stoic, serious reputation and think outside the box. How do you require less from your consumers so they can complete an online checking account application quickly while viewing it as an enjoyable experience? Can you even go so far as to make it fun? Digital banking innovation offers unique opportunities to do this, but be open to bringing in outside experts who have broad experience to help jump-start ideas.
- Banks will be making bigger investments in digital banking innovations. To make any of this happen, the investment will be required. The threats from financial industry entrants such as Google, Apple, Facebook and hundreds of other firms are causing banks to sit up and take notice. Many banks are already planning to increase their investment in these digital technologies before consumers move on to competitors that already have.
Don’t be the dinosaur that waits to embrace these digital banking innovations. Grab the bull by the horns and get started. Your customers are counting on you.