Institutions in the finance sector are under pressure to create seamless, efficient and user-friendly account opening experiences as they contend with a more competitive digital marketplace. This streamlining is not just about improving customer satisfaction; it is also critical for driving growth as it provides an avenue through which banks can attract new customers while deepening relationships with existing ones.
The Importance of a Smooth Account Opening Process
For many, opening an account marks the first substantial interaction they will have with a financial institution. If the account opening process is simple and intuitive, they will move the process quickly and be satisfied having accomplished their goal. If the user interface is convoluted or slow-moving, they may abandon the process. This leads to lost revenue and creates negative brand equity.
Considering that we have seen a rise in digital-only banks and other such financial institutions, traditional players need to make online banking their number one priority, while leveraging advantages created by their brick-and-mortar locations, otherwise they risk being left behind.
Challenges Associated with Conventional Account Opening Procedures
There are several points of friction in most traditional account opening processes that slow down the process of registering new users:
Cumbersome Forms: Asking customers to fill out repetitive forms leads to frustration and applications dropping off halfway through the application process.
Manual Verification: The requirement for physical document submission followed by manual verification or in-person visits significantly prolongs approvals, creating a significant barrier for those who are used to living in a digital-first economy.
Lack Of Transparency: Banks often fail to update applicants on a real-time basis regarding application status, leading to dissatisfaction and even to applicants opening up accounts with rival firms in the interim.
Approaches To Simplifying Account Opening
Below are some strategies that can be employed to streamline account opening:
Digital First: Every bank’s account opening strategy should be digital-first. Applicants should have the ability to complete every step of the application online, from anywhere, at any time, on any device. Banks can achieve this by eliminating in-branch requirements and lowering entry barriers for convenience-loving tech-savvy customers.
Introduce Dynamic Forms: Solve for redundancies by using dynamic forms that auto populate repeat information. Pre-populating some fields with data from existing customer records or third-party sources can further streamline the process. Consider auditing all forms to evaluate whether information being captured is necessary and useful to your banking operations.
Automated Document Verification: Use optical character recognition (OCR) and artificial intelligence (AI) technologies for automatic document verification. Such tools can help authenticate IDs and proof of address, doing away with unnecessary delays in opening accounts.
Integration with Core Banking Systems: Ensure that front-end systems are seamlessly integrated with core banking systems so that customers have a smooth experience when opening accounts. This ensures continuous flow of information without manual interventions and ensures the uninterrupted flow of data.
Continuous Improvement through Data Analytics: Banks should track their account open success rates using data analytics. Analysis tools can identify points where customers drop off or experience delays, enabling banks to make informed decisions aimed at refining and improving the account opening process.
The Role of Technology in Driving Growth
Simplifying account opening procedures can help credit unions and banks widen their deposit base by making it easier for potential clients to do business with them. Furthermore, automating processes reduces manual labor while decreasing costs which can be redirected into other areas that foster growth.
Besides making cross-selling easier; streamlining processes involved during opening accounts also enhances upselling different financial products. Once an individual or organization becomes an account holder, lenders can offer additional products and services, including credit cards, loans, and investment products based on their profiles and behaviors.
Positioning Oneself for Future Success
Customer expectations are set not by the banking industry, but by experiences in the greater digital economy. What users learn to expect from interactions with Amazon and other online marketplaces that are optimized for one click purchases and instant gratification can lead to frustration—when they do not have similar experiences with their bank—or satisfaction, when their needs are met. Banks should look larger than their industry when implementing best practices. Those that do can expect an increase in completed applications, resulting in greater revenues and more opportunities to improve customer loyalty and retention.
