Opening a new bank account with no human contact

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31 August 2015
Daniel W. Latimore
It’s no secret that banks are increasingly interested in using digital channels to sell to customers. With that in mind, I tried to open accounts at 26 U.S. banks using only the digital channel, typically online, but sometimes via my smartphone. I evaluated the processes solely from the consumer’s perspective. A checking account applicant doesn’t care how hard it is to change processes, doesn’t know how difficult it can be to deal with compliance, or understand why banks have to collect so much information when he is the one giving them money. The methodology is unapologetically customer-centric. Customer experience has become increasingly important to banks at the same time that fewer transactions are occurring at the branch. Several Celent banking clients have been asking about the account opening experience, and the confluence of events made it a good time to undertake this research. We describe seven key steps in the account opening process, describe them in some detail, and lay out best practices for each. The quality of the experience varied widely; some banks we thought would be excellent were not, and vice versa. Leaders have moved beyond taking paper forms and putting them online, but there is still an immense amount of room for improvement. Some prominent names still required wet signatures, or made applicants spend a lot of time before telling them that they couldn’t be served because they didn’t live in the right ZIP code. Others tried to implement technology that didn’t quite work (like capturing name, address, and the like by taking a picture of a driver’s license). And the neobanks’ processes on an iPhone were shockingly clunky. The best, however, made the process seamless, simple, and as painless as possible with quick entry, easy KYC methodology, and a wide range of choices appealingly presented. As new competitors — from neobanks to prepaid cards — raise the customer experience bar, banks need to put their best foot forward when courting new customers, more of who are opening their accounts online rather than at the branch. Customer-centricity (trite as the term is) must be the principle guiding banks as they refine their account opening processes. Banks face a host of constraints as they bring those processes online. Customers, however, don’t care. Too often banks seem to be designing their process to meet their own needs first, with customer experience being an afterthought. Opening an account shouldn’t be a privilege that banks are deigning to bestow upon their customers; rather, it should be a welcoming and inviting introduction to the bank that sets the tone for the ongoing relationship. Banks refining their online account opening are beginning to look to the next stage: mobile account opening. Driven by technological capabilities offered by the phone, principally the camera but also the authentication capabilities of the device (and phone number) itself, third party vendors are beginning to make interesting cases for investing in remote account opening capabilities. Banks should consider four key ideas about their account opening process:
  1. Design the process from the applicant’s perspective, not the bank’s.
  2. Consider the capabilities offered by the new medium rather than simply transferring a paper- and branch-based process online.
  3. Avoid self-censorship: question why certain processes are used (e.g., wet signatures) and refine them when they don’t make sense.
  4. Develop a strategy to implement the next phase of account opening: mobile.
As we’ve all been told, you only have once chance to make a first impression. Make the most of it. If you’d like to learn more and are a Celent client, please look at the recently published report: A Misanthrope’s Journey: Assessing the US Online Account Opening Experience. And if you’ve got comments or questions, please let me know.


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