Back in 2013, Aite Group released a report that concluded banks needed to migrate from in-person paper-based onboarding to Web and mobile platforms or risk being left behind, particularly by clients with the potential for high net worth in the future.
The Financial Brand shared that even in 2017, reports revealed that “digital account processes are still falling short of customer expectations… The result is abandoned account opening shopping carts, dissatisfied customers and lost sales.”
Now in 2020, with COVID-19 forcing even the staunchest in-person customers to do things from home, the value of online banking has increased even further. But what can banks do when faced with poor online account opening conversion rates even when ‘do it from home’ has become the norm?
We’ve identified three things banks can do to optimize online account opening conversion rates:
- Test and optimize the application process for user experience (UX)
- Make sure potential customers know they can apply online
- Target existing customers with recent transactions
Test and Optimize for UX
It’s not always easy to get your team into the mindset to test. It takes time to identify what to test, and how to test, and then wait for the testing to run its course before evaluating the results. But the User Experience (UX) Audit is a critical component to increasing account opening conversion rates. Generally speaking, poor UX is the quickest way to lose a potential online customer.
Before you can get usable results, you need enough traffic to test the UX, so check your traffic volumes. As Karolina Matuszewska and Marek Juszczyński note for Piwik PRO, banks are limited in who can access data gathered online, so Google Analytics and other cloud-based software isn’t sufficient. Consider using compliant on-premises analytics and self-hosting deployment so you have full and secure access to your data. Always ensure your data gathering is fully compliant with privacy laws.
Another challenge to testing for UX involves the regulated environment of online banking. It may take additional time to get approval for testing different metrics and pieces of your technical systems. But without data you won’t be able to determine why your account opening conversion rates are low, and what to fix to improve them.
Testing should reveal where customers who began the online account opening abandoned the process. As a starting point consider identifying the following abandonment metrics:
- Your abandonment rate at each key step in the process
- Fields or steps that users frequently have to re-enter or correct field data
- Which fields are ignored or skipped
- How many steps you have in total and how many steps you have per stage or screen in the process. Can you simplify and reduce distractions?
- How long it takes to complete a form field (or the entire form)
- Can the process easily be completed on a mobile device?
- Are instructions clear and concise and do they set expectations for what is needed to complete the process before the use begins?
Addressing abandonment requires two tactics: Re-targeting customers who abandoned the process, and fixing areas where the metrics identify problems. Collect and store each applicant’s name, email, and phone number on the first screen, and set up a follow-up process. If the application is abandoned you can direct re-targeting and email reminders and offers towards these potential new accounts. (Although if opening conversion rates are substantially missing the mark, it may be a good idea to fix the underlying problems first. Re-targeting customers won’t work if they run into the same problem that caused them to abandon the application in the first place.)
People are increasingly relying on their smartphones to conduct all of their banking, and more than half of online account openings are now conducted with smartphones. Evaluate the mobile account opening experience separate from the tablet/desktop experience.
Does your mobile account opening UX hold up? Eliminate keystroke requirements by providing more drop-down input fields and remove unnecessary images and instructions. (These can remain on the tablet and desktop versions of the application to provide access to more detailed instructions without impacting the UX.)
Because many mobile applicants are switching channels during the process, make sure the application is designed with a “save and resume” function, this is a frequent but fatal miss. If applicants need to re-fill in forms again after switching between apps on their phone, or once they are back at their desk, you’re far more likely to lose them as customers.
This graph from jumio.com shared by Piwik PRO shows why millennials abandon mobile banking. Right at the top is processes that are too long. And millennials are not going to head to a branch to complete an account opening. They’re going to look for a different bank that provides a better mobile UX.
But it’s not just millennial’s needs that are served by a great mobile banking experience. The Aging Analytics Agency quotes Bank of America Merrill Lynch, “The global spending power of those aging 60 and over will reach $15 trillion annually by 2020.” And people over 60 are increasingly choosing to use smartphones in their daily lives.
Forbes reported at the beginning of 2020, Baby Boomers “will have new and different banking needs that the industry will have to design and redesign products and services for” and “banking is increasingly a segmentation game” where different generations have different needs. Again, data comes into play. The more you learn about the individuals behind your account opening conversions and abandonments, the more you can make changes to the UX that will directly meet their needs.
When you do make changes, do them one at a time, and then test the impact. The time it takes to evaluate each change is well worth the data that shows what works to improve conversion rates and what has minimal/no impact.
As with all online commerce, the fewer clicks a customer needs to make to complete a transaction, the better. Look for places where you can eliminate unnecessary steps. Are you requesting things like a previous address or employer’s name and contact details that aren’t necessary for an application? Simply removing these fields can make it easier for a customer to proceed through the application.
This graph from Signicat in The Financial Brand report shows the direct correlation between abandoned applications and the time spent to complete an application:
Improving your UX doesn’t just improve conversions. It can lead to many other benefits. Gartner’s research found that “Ninety-six percent of customers with a high-effort service interaction become more disloyal compared to just 9% who have a low-effort experience”. A low effort experience improves Net Promoter Score, repurchase rates, reduces costs, and improves employee retention rates.
Even when a customer successfully completes an online account opening, their experience will color their future transactions with your bank. Improving your UX and creating low-effort interactions will provide long-term payoffs.
Make Sure Potential Customers Know They Can Apply Online
Do potential customers know they can apply online? Especially during times when people are looking for ways to conduct their financial business without going into a bank, communicating that you offer online account openings is a pretty important part of achieving higher conversion rates.
As this chart from The Economist shows, there are people of all ages who would rather go without their wallet than their phone! Does your bank have a campaign to let them know they can easily open a bank account with their phone?
When FICO surveyed 2,000 US adults in 2018, they determined that while more younger people than older people were willing to open an account online, most of them would be deterred if they began an online application and then had to complete it through another channel (ie. telephone verification or bringing documents to a bank in person). Of the respondents, “10% would give up on the application completely and another 12% would give up… and try again with a competitor”.
Potential customers who know they can complete an entire application online are more likely to begin and complete an account opening. This information, along with customer quotes about the ease and convenience of the application process are good incentives to use in marketing.
Target Existing Customers
One of the best sources for opening new accounts is existing customers. After all, they’re already familiar with your bank, and most will have some loyalty to you. Take a look at this chart provided by CenterState Correspondent Division that shows conversion rates for banking products separated by new and existing customers:
Are you offering customers who use online banking the opportunity to open additional bank accounts, and highlighting the benefits of different accounts? If not, you’re missing an important opportunity to better meet your customer’s banking needs and consolidate their banking with a single access point.
CSO Chris Nichols with CenterState Bank shares some important insights about conversions with current customers. One area with good returns involves ‘Last Action’ marketing. This is where you identify customers with recent activity (things like increased deposits or paying off loans) and use this as the marketing trigger. “Last Action marketing is predicated on the fact that a customer is more likely to convert if they are recently familiar with the bank and product and they are satisfied with the service they are getting.”
Last Action marketing also helps customers to remain engaged with the bank and avoid what Nichols calls the “no engagement zone”. The longer the time between transactions for a customer, the lower the conversion rates. This graph shows the dramatic drop in conversions when too much time has passed between transactions.
Before you market online account opening options, find out why your current conversion rate is low, and test each change to determine which ones improve conversions. Then, when you need to maximize your marketing investments for online account openings, start with existing customers who have conducted transactions within the last seven months, before focusing on marketing to new customers.
If you’d like to discuss solutions that fit with your specific needs, please contact Dave Quigley directly at firstname.lastname@example.org.