As customers increasingly interact with companies and each other digitally, retail banking providers are struggling to determine how to acquire more customers through online and mobile channels.
In fact, 40% of customers now say they would prefer to purchase new banking products in digital channels, but retail banking executives report that less than 10% of digital applications are successfully completed.
In a recent meeting CEB convened executives from leading retail banking institutions, along with digital technology and service providers, to discuss the challenges of acquiring customers outside the branch. The discussion threw up five important lessons for retail bankers.
Do not try to mirror the branch: Before overhauling any “digital acquisition strategy,” executives should take a step back and consider who they are designing it for, and what these customers need to open an account without staff assistance.
As an example, customers opening a new account from their mobile phone may be doing so away from home. Banking providers must consider how this affects the authentication and documentation processes.
Reassure customers by managing expectations for the process: Customers know that they can complete the account opening process with one branch visit – but the digital process is much less clear. Will they have the right paperwork for identification? Do they need to print documents? How long will the process take?
Laying out these expectations up front, especially regarding the amount of time, effort, and information required, will reassure customers that they understand what is needed to open accounts from their computer or mobile device.
Build customer confidence by making help readily available: Customers will likely have a number of questions during their buying process – anything from whether they are getting the right account to meet their needs to how they can activate different features of the account.
Having help readily available in a digital format, whether it be a chat button or a follow-up call, will build a customer’s confidence during the purchase process.
Start small to build the business case: Because many customers still open accounts in the branch, it can be challenging to build the business case for investments in digital acquisition technology – whether it be paperless processing or a new mobile app.
Many institutions are seeing success by starting with one product and then using those lessons learned with that to expand capabilities to the larger network, rather than trying to make the case for large-scale change.
Communicate the ancillary benefits for a compelling business case: When making the case for investments, executives should not forget the ancillary benefits of many of these technologies.
Paperless processing, for example, not only creates internal efficiencies, but also has a large impact on the customer experience. Investments in “e-Signature” technology can reduce staff and customer effort, improve data collection and fraud detection, and reduce processing time.