Onboarding wars: Retail banks aim to refine account opening processes

The number of clicks required to open a bank account in the U.S. using only digital means is as low as 24, but rises significantly from there. And each push of a button becomes increasingly important as account applicants place more value on apps that provide better user experience. The importance of sophisticated digital account onboarding grew during the pandemic and shows no indication of going away. With branches closed or imposing restricted hours, customers opened more accounts online and became more comfortable conducting many of their basic banking activities that way. And although many of these restrictions have eased, it so far appears that transactions are not coming back to pre-pandemic levels. It is clear that banks have gotten better at the onboarding process, which is now increasingly table stakes in the industry. Financial institutions are targeting a streamlined, narrow account- opening funnel in the hope of building a healthy, long- term customer relationship. Principal to encouraging the applicant to complete the journey is a smooth transition between each step, with few unnecessary intrusions, transparency about the process, and specifics about what is involved from start to completion. Progress meters, clear estimated journey timeframes and lists of requirements are essential for both the bank the applicant.
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Straight to the point: Players such as M&T Bank and TD Bank outline onboarding resource requirements with clarity. Source: Digital Banking Hub

Best practices

In terms of account opening process features, a number of simple yet highly effective best practices have emerged of late. Providing customers with the ability to save an application midway through – particularly if the process is especially time-consuming – can be useful if the customer gets interrupted or distracted during the onboarding process. The ability to resume the process should be equally as user-friendly. Providing a review page on which the applicant can edit personal information prior to submitting their request can help ensure details are correct.

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US Bank provides applicants with a full review screen allowing them to check information before submission. Source: Digital Banking Hub

Many banks assume that because an applicant has downloaded an app or navigated the website, they will be capable of completing the onboarding process independently. Nevertheless, best-in-class providers currently offer a helping hand throughout the process, through anchored headers, tool tips or live chat services.

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Neo-bank Discover provides in-app live chat and tooltips to facilitate the onboarding journey. Source: Digital Banking Hub

Identity verification has become an issue that laggards struggle with, while forward-looking banks use sophisticated technologies to enrich the all-important user experience. Identification image capture – typically scanning the applicant’s driver’s license – is a user-friendly tool that helps automatically fill in an applicant’s details. Some leading players tie this with selfie verification, allowing the bank to match the customer against the ID photo.

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Revolut verifies through selfie. Source: Digital Banking Hub

Over the past few years, customer-centric banks have looked to embed new customers into their accounts and other services as quickly as possible, streamlining the account onboarding process and simultaneously allowing the applicant to assess other functionalities while encouraging them to begin using their account. Card customization during the application process has become a creative and impactful way of engaging the customer with the brand -such as Revolut offering a range of debit card design options. Those at the forefront of the market allow users to fund their newly opened account through a variety of means – such as virtual cards – to allow for instant account access.

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Bank of America offers a virtual card that can be used as the customer waits for their physical debit card. Source: Digital Banking Hub

Relevant and specific cross selling can help to initiate digital sales effectively, even within the account confirmation or welcome email that explain the functionalities and benefits of the new relationship. Emails and welcome screens that are uncluttered, crisp and intuitive and offer step-by-step guides can help shape the next stages of the user’s journey and have become of particular use for non-digital natives. Here, banks have identified that a personal touch can go a long way in helping to embed the relationship.

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Aspiration offers upgrades on confirmation of account opening Source: Digital Banking Hub

Getting better

As the customer base becomes increasingly digital, standards are being set higher. Of the 20 largest U.S. banks by assets, 90% provide instant application decisions and 60% instantly verify IDs.

But the majority of banks are increasingly looking to innovate solutions and engagement points. As a result, they are testing ever-creative ways of bettering the onboarding process. That’s in addition to an already highly competitive retail banking environment that has been forced to rethink of the way people engage with their financial institutions, as well as their spending patterns.

There will be plenty of opportunities for digital-savvy banks. In the battle to enthuse customers to engage past the magic 60-day mark, significant attention must be afforded to delivering best-in-class practices during those first handful of clicks. 

Michael McCaw
Digital Content Editor
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