Digital Account Opening in Retail Banking: Competing On First Impression

Digital Account Opening in Retail Banking: Competing on First Impression

Overview

Digital account opening is cementing its position as a must-have capability for banks of all sizes in the US, pushed forward in large part by the Covid-19 pandemic. Now, as more institutions jump onboard, it’s time think about how it can be elevated for the long haul. In this report, we explore where the industry stands overall on digital account opening for retail, (we will cover business and commercial in a subsequent report), who the key players are shaping the landscape, and the ways in which this capability can be taken to the next level to drive completion rates for qualified applicants, lower fraud, increase cross-selling opportunities, and deliver a best-in-class first impression.

Key Highlights

  • Covid-19 put a spotlight on the need for digital account opening capabilities across financial institutions. Because customers were largely at home, and branches were in many cases closed, digital account opening turned into the de facto way to open a bank account.
  • Overall, banking institutions in the US made tremendous progress in implementing digital account opening capabilities in the face of the pandemic. In fact, a majority of respondents to CCG Catalyst’s 2021 US Banking Study, which surveyed 109 C-level bank executives this past winter, said they offer some form of the service to their retail clients by this point.
  • Now, the challenge is going to be thinking beyond simply “getting a solution in place” and building on these initial efforts to enhance the experience for customers and create differentiation within the process itself. This means making improvements in key areas like data capture, funding, and disclosures to optimize the experience and reduce friction.
  • As banks begin to plan their next moves, it’s important to understand the key forces shaping the digital account opening landscape and setting the pace. These include fintech competitors and leading incumbents, enabling technology vendors focused on improving areas like identity decisioning, and digital account opening solution providers.
  • Such players are changing the game when it comes to key metrics like “time to open” and abandonment rates, helping to set new standards for the industry. Going forward, these pacesetters are beginning to turn their attention to new frontiers like multiproduct and multichannel capabilities.
  • Digital account opening is not a static feature; it’s an evolving capability that will continue to advance over time — and quickly. To stay ahead, institutions will need to be thinking toward new frontiers and staying focused on differentiation.

The Bottom Line

Digital account opening is making the shift from nice-to-have to ubiquity. As a result, the competitive landscape is moving from offering this capability to how you offer this capability. While it is fair to say that not everyone needs to be at the forefront of innovation, this is a particularly fast-moving area, which makes even keeping up a bit tricky. Maintaining a close eye on key trends spreading throughout the industry will be critical to maintaining a good position.

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