Growth is impossible without faster digital checking account opening
Improving the digital account opening experience is required for any bank or credit union wanting to support a strong customer acquisition strategy. Unfortunately, while improvements have been made over the past year, speed and simplicity still falls short of neobank and big tech competitors.
More than ever, the ability to provide transactional and engagement functionality across digital channels is a critical component to success in banking. Traditional financial institutions must do more than just enabling digital banking support. They need to provide greatly enhanced speed and simplicity of acquisition and onboarding customers in both online and mobile channels. Failure to meet consumer expectations will result in significant app abandonment rates, negatively impacting financial institutions’ customer acquisition and relationship expansion efforts.
The largest banks and alternative financial services providers, including both fintech and big tech organizations, are already delivering on consumer expectations by reducing the time and effort required to open and use checking accounts immediately. In addition, they have integrated human communication to assist with any challenges a customer may have, close to eliminating new account application abandonment rates exceed 50% at many traditional banks and credit unions, according to Cornerstone Advisors.
The impact of digital account opening is clear. Cornerstone Advisors found that during the first half of 2020, digital banks grew by 67%, with the percentage of new deposit accounts opened with digital banks growing threefold from 6% in 2017 to 18% in Q2 2020. While some of these new accounts may be secondary relationships, over 20 million households consider a digital bank to be their primary financial institution.
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