Like the red balloon in “It,” frictionless onboarding of customers is an attractant to bankers. Easy and quick account opening is a must have for banking, but like an evil clown in a sewer, if you are not careful, you are in for a world of hurt. Stephen King’s “It” was in the back of our mind when we sent some of our best bankers (We didn’t tell them about the “Loser’s Club” moniker) out into the wilds to test online account opening at some top banks. In this article, we highlight our journey and discuss what we learn to keep bankers safe.
Lesson One – Your Fear Makes Your Enemies Stronger
The dancing clown in the movie It scares people by feeding off their worst fears. Whatever you hate, the clown would manifest itself around that fear. It was only once the kids of the Losers Club confronted those fears did Pennywise lose its power.
In the same fashion, banking technology takes on the fear of the person analyzing it. Some are fearful of security, others of the customer experience, of non-adoption and still others, fear that they don’t have the expertise to pull it off. Step one, as we learned in this journey, is to get those fears out into the daylight and confront them with facts. We can tell that almost all fears of digital account opening can be overcome when compared to the traditional process. Bankers should be more scared of keeping the status quo.
Lesson Two – Don’t Get Suckered In
Pennywise, the clown in It, would use all sorts of tricks to lure kids in – a toy boat, a favorite dessert, a brother – whatever it took to grab attention. Similarly, vendors or developers will lure you in with a variety of promises. It is critical that banks question these promises and take steps to design the right process upfront.
In particular, the whole process of online or mobile account opening is to make it faster and easier than traditional account opening. If traditional account opening is faster than your online application, you have done something wrong. It took us one hour to open an account at a national bank, and we had to answer 30 questions. Comparatively, Bank of America emerged as the gold standard and was the simplest, fastest and easiest that took five questions and ten minutes to open an account. If your bank is going down the path of automated account opening, use the below benchmarks to reverse engineer your process.
Lesson Three – Don’t Put Yourself In A Bad Situation
The kids of It, like most horror movies, put themselves in situations that they should objectively know are dangerous. The most dangerous situation in digital account opening is the verification process. Banks that are fearful of security tend to go overboard and ask too many questions. Worse yet, some banks make you go into a branch to verify yourself, thus defeating the whole purpose. Talk about scary. Understand how each verification layer works and design it to your comfortable, but not beyond.
Successful banks either verify through their phone or security questions using publicly available data such as last addresses lived, social security number and driver’s license. If you are using a third-party application, most will have this process wired and can advise your bank on the proper level. In general, after three good verification questions, the odds of your bank uncovering fraud is less than the odds of you creating a horrible customer experience.
Lesson Four – Everyone is Afraid of Something
Just like every kid in the Losers Club had their respective fear to feed Pennywise, every customer has their own set of fears about opening accounts online. Security, privacy, and ease of use are always the top three, so bankers need to make sure they hit these head on to be successful and provide adequate education, training, and support. This point goes double for employees as employees need to be trained, retrained over time and re-supported to continue to have the tools to work successfully with customers.
Also, there are a set of fears that are less commonly spoken about in banking circles and customer focus groups. The fear of funding is one such impediment. As Moven found out, lots of customers are willing to open an account, but actively using an account is a different matter. Banks need to make it as easy as possible to allow for the funding of the account be it a wire, ACH, debit card, existing account and even a credit card.
Banks also need to give thought to putting together a campaign and educational support to keep customers using the account after it is funded. An email confirmed right after the successful account setup is good as is a reminder to use ten, 30, and 60 days after. While many banks are successful at introducing an online account opening, the trick is to create a habit of usage. For banks to create a habit, our research shows that you need the customer to use the account six times. To that usage, banks most likely need a campaign and follow-up of twelve to twenty customer touches.
Lesson Five – Stick Together
If there is one lesson to be learned from Pennywise is that individually, we are vulnerable and prone to fear. As we learned from the movie, when the group sticks together and is united, they are strong. If you already have an online or mobile account application process that takes less than 20 minutes to get through, we would love to hear from you. Conversely, if you are going through the process now and would like to share ideas, reach out so we can stick together.
Submitted by Chris Nichols on October 04, 2017