Online Account Opening: Tips on asking the right questions to ensure success. By Mark Guillette Consultant FIS Consulting Services

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1 Online Account Opening: Tips on asking the right questions to ensure success By Mark Guillette Consultant FIS Consulting Services

2 Online Account Opening: Tips on asking the right questions to ensure success By Mark Guillette, Consultant, FIS Consulting Services Overview First impressions count the most and community banks and credit unions can put their reputation and revenue streams on the line when offering online account opening products. In today s digital frenzy, institutions cannot afford to ignore the online channel to gather new accounts. However, the key to success is asking the right questions at each stage in the new account opening process. This helps the organization understand the failure points and barriers in the process and the reasons for applicant drop offs. The importance of the online channel for opening accounts was highlighted in recent research from Aite that indicated almost a third of baby boomers opened a checking account online in the last two years. 1 The Online Account Opening Process as Stages in a Funnel The basic process financial institutions follow to generate accounts online operates like a funnel. Each step in the process is a potential failure point to overcome. Keeping prospects in the process (of the funnel) allows for more funded accounts at the end of the day. The distinct stages of the funnel activities become more specific with the result being a funded new account opened online. The five actions comprising the funnel process are depicted in the following diagram: 1 U.S. Trends in Checking Account Opening, Aite Group, October

3 Generate Traffic Generating website activity fills the critical initial phase of the new online account funnel. The questions that community institutions must answer in this initial stage involve driving individuals online to a website. Consider the answers to the following questions: How are customers, members and prospects finding your website? How and where is your website marketed? Does your bank offer online account opening through your ebanking product to existing customers? If so, is that process streamlined, given the customer s existing banking relationship? Are you using Google ad words? Are you listing your site on the Bankrate websites? Do you plan to offer highly competitive rates on these new accounts? Is your website, and specifically the page(s) on which your online application resides, optimized for the leading Internet search engines? How do you plan to integrate the marketing of online account opening with your institution s more traditional channels, such as direct mail, television ads and billboards? Increasing activity at the top of the funnel drives more customers to your institution s website jump-starts an increasing volume of new account applications. Initiate the Application Once a customer or prospect is on your website, your team must make the ability to open an account online visible and how to begin the application easy to find. Questions to consider include: Have you interviewed or surveyed your online traffic and asked how easy (or difficult it was) to click on the open an account online option on your website? Can you gauge how easily prospects can begin the application process? Do you use site analytics to determine the websites from which your online applicants came? If a prospect has a question regarding the process, can they easily call or chat with a live person to get an immediate answer? The opening application must be clearly visible on the page within your institution s website. Web surfers have little patience for online products that are badly placed, poorly designed or inadequately explained. When presenting products online, institutions should promote features and benefits in as few words as possible. Submit the Application Ensuring that the online application is completed is critical to account opening success. High abandon rates have doomed earlier online account initiatives. 3

4 At the end of this stage, the applicant has entered sufficient information for your institution to either approve or reject the application. And applicants should have reviewed and accepted the electronic online disclosures. At this point in the funnel process, institutions must ask themselves: How user-friendly and easy-to-complete is the online application? Is our institution gathering unnecessary information in the application process? Has our institution streamlined all our processes involved with opening an account online? If a prospect has a question regarding the process, can they easily call or chat with a live person to get an immediate answer? Is the submit button particularly obvious on the application page? Approve the Application During your organization s approval process for accounts opened online, executives must consider: How stringent is our ID validation and QualiFile screening process? Is our institution kicking too many good customers out of the process? Does our institution support processes to follow up on applications that result in a review status in QualiFile? What plans does our institution have for following up on partially completed or pending applications? In many online account opening systems, an application in review requires further time or information to process. While many accounts can be opened immediately, some require more investigation, and it s important to engage these prospects quickly so as not to lose their interest and forward momentum. Fund the Account If an account does not receive funding, the opening process is for naught. Executives should measure success in terms of how many accounts are opened online and funded. Institutions must understand how the accounts are being funded. Community institutions should also ask: Has our institution streamlined all our processes involved with opening an account online? What types of funding options does our institution offer? How many accounts are funded with a check, ACH, a transfer from an internal account or a credit or debit card? How many applications are started, finished and funded as new accounts? 4

5 Are we conducting follow up on accounts that have not been funded? What are the main bottlenecks in our processes to gaining funded accounts? What does our customer facing staff tell us about our online processes? The Importance of Customer/member Follow-up Whether the new account has been immediately funded or not, organization staff should follow up with new customers to ensure they become profitable customers beginning to build personal relationships wherever possible. In a recent JD Powers survey, the results of a personal phone call follow-up in the onboarding process are dramatic. Customer satisfaction increases to 8.47 on a 10-point scale with phone contact, compared to a score of 7.32 without any customer follow up. 2 Summary Done correctly, online account opening can efficiently generate new revenue and raise service levels for customers and members. By asking the right questions for each stage of the funnel process, financial institutions can optimize the use of this low-cost acquisition channel and maximize its revenue potential. 2 U.S. Retail Banking Satisfaction Study, JD Power, May

6 How to contact: For more information on strategies for the planning, implementation and optimization of your online account-opening products, contact FIS Consulting Services at or visit Published by: Financial Managers Society 1 North LaSalle Street, Suite 3100 Chicago, IL info@fmsinc.org /WhitePapers (member login required) For over 65 years, the Financial Managers Society s network of members has provided technical education to financial professionals from community financial institutions through conferences, seminars, webinars and publications. For details on FMS membership benefits or how to become a member, please visit /JOIN or call 800-ASK-4FMS ( ). 6

Online Account Opening Asking the right questions to ensure success

Online Account Opening Asking the right questions to ensure success Asking the right questions to ensure success Mark Guillette FIS Consulting Services 800.822.6758 Introduction First impressions count the most and financial institutions can put their reputation and revenue