The term “customer experience” is everywhere these days, but it’s more than a buzzword; it represents the difference between an organization’s growth and success or falling behind. Nowhere is this more true than in the banking industry.
The customer experience is the primary determinant of banking relationship retention and growth.
Because most banking relationships start with the account opening process, it is often a bank’s first (and sometimes only) opportunity to make a positive and lasting impression. Therefore, it’s essential that banks get this right.
Consumers have grown accustomed to instant access to anything whenever and wherever they choose. Whether ordering dinner, buying a car or signing your kid up for soccer, customer expectations have evolved to expect everything to be accessible at our fingertips in mere minutes. Why should opening a bank account be any different?
Account opening and customer retention
Research shows that the easier the account opening process is for a customer, the more likely the customer is to expand their relationship with the bank, resulting in greater customer retention. Furthermore, customers with multiple accounts are the most profitable ones.
Less Friction, Greater Pull Through
Banks that offer a frictionless account opening experience that minimizes customer effort see significantly lower abandonment rates. Whether the customer opens an account from their living room, office, over the phone, or in a branch, the experience needs to be consistent and painless. With an effective omnichannel strategy for account opening, banks can put their best foot forward with a fantastic customer experience in any channel and establish loyalty from the get-go.
Creating a frictionless customer experience is not only about having the right technical capabilities in place, but also having an efficient process. Understanding the customer journey and eliminating friction points along the way can streamline the overall account opening process. With an end-to-end assessment of the account opening process, banks can eliminate unnecessary steps, improve workflow and identify opportunities for automation. This will save time for customers and bankers alike, creating capacity for bankers to get to know customers more deeply and identify opportunities to support their needs with additional products and services.
Deepening the Customer Relationship
A customer who has only one “product” (e.g., an account or loan) represents the highest risk for retention. As the banking relationship expands, however, customer retention increases. The account opening experience is often the first time a customer interacts with a bank. Those that capitalize on this moment with the customer not only increase new account acquisition rates but also the number of products and services a customer has with the bank, translating into greater retention and profitability.
During account opening, the bank also has an opportunity to offer a suite of products that may be suited to the customer, in addition to the need that prompted the account opening. In presenting additional relationship options for the customer, keep these points in mind:
Read how we helped a large regional bank introduce efficiencies in the accounting opening process to optimize the customer experience.
Helping a Regional Bank Improve the Customer Experience in Account Opening
Safety First
One of the most critical (and complex) elements of the account opening process is customer verification and validation. While it is imperative for the safety and soundness of the bank to maintain robust controls for customer verification and due diligence, the abandonment rate during account opening increases significantly for banks that have an inefficient customer verification process.
The key to enabling efficient Know Your Customer (KYC), customer due diligence (CDD), and fraud and anti-money laundering (AML) controls is effective integration. Banks can protect themselves and optimize the customer experience by using intelligent automation (e.g., API infrastructure, workflow automation and digitization) and integrating their account opening with third-party providers to automate ID checks, address validation and risk assessments in real time.
Account opening is an essential capability for any bank, but not all account opening experiences are the same. To ensure your bank is maximizing acquisition and retention, focus on creating a consistent, simple process across every channel and leveraging real-time internal and external data while ensuring effective KYC and AML controls. Because the saying is true, “you never get a second chance to make a first impression.”
About the Author
Meredith Rousseau is a principal in the Banking and Financial Services practice, providing real-world experience that balances operational expertise and tactical acumen with intentional automation and technology enablement. Prior to joining SolomonEdwards, Meredith served as a senior executive for a top 10 bank and, most recently, as SVP of Payment and Deposit Operations. She is dedicated to helping propel the digital transformation of the financial industry in a practical and sound manner.
To learn more, connect with Meredith at mrousseau@solomonedwards.com.
