Competition in the financial sector is fierce—especially as big banks and online-only banks continue vying for customers. When it comes to digital account acquisition and onboarding, financial institutions must ensure they provide consumers with a streamlined, frictionless account opening experience they’ve come to expect from every product, service and business they encounter daily.

For banks, that amounts to a digital, core-integrated account acquisition solution. Utilizing this type of solution boosts your bank’s revenue while providing a superior customer experience.

What Is Digital Account Opening?

Digital account opening is the process of creating a new account for a customer online instead of in person. Depending on the institution, digital accounts can include checking, savings, credit card or other types of accounts. Since it streamlines onboarding for new accounts, including business accounts, digital account opening can also lead to an introductory of treasury management services your financial institution offers, deepening the relationship with those business clients.

Although branches still serve a function, banks continue to prioritize digital offerings to meet customers’ expectations. Digital account opening, for both consumers and businesses, has been a primary focus for years. Particularly relevant in today’s interest environment, banks continue to invest here to streamline access to new deposits and acquire new business faster. In CSI’s 2024 Banking Priorities Executive Report, 41% of bankers report that digital account opening is their top technology investment.

A digital account opening solution improves the customer experience by allowing banks to leverage data analytics for a holistic customer view. This includes reports on abandonment to allow review and optimization of specific steps. By embracing an effective solution, you can also promote your institution as forward-thinking and widen your digital footprint.

With digital account opening, it’s easier to reach customers outside of your community and instill confidence in your digital banking capabilities. Further, digital account opening safely automates backend processes for improved efficiency.

Supporting Revenue Growth and the Customer Experience

Financial institutions increasingly seek to enhance relationships with existing customers through cross-sales. So, an account acquisition solution must feature both an enrollment site for new accounts as well as integration with a bank’s digital solutions to allow current customers an efficient way to add more products and services. And it must be available any time, via desktop, tablet and mobile device.

And although growing deposits is a huge priority for financial institutions, they must strive to do so in the most cost-efficient manner possible, while still providing that superior, personalized customer experience. Online acquisition tools allow customers to add accounts—sometimes multiple accounts or products in one session—while reducing banks’ costs associated with physical buildings and the employees to staff them.

Digital Account-Opening Systems in Action

Benefits for Consumers

Let’s use this example: a new customer successfully opens a checking account. They’ve used the bank’s secure, online account-opening solution—thereby supplying their personal information and scanning their driver’s license for quick ID verification. They are approved for the account and receive instructions for funding the account. Once the customer is onboarded, the bank can send personalized offers—via the new customer’s channel of choice—for additional solutions or add-ons to products they’ve already selected. This helps meet the customer’s individual needs and provides the best possible experience.

Benefits for Banks

This digital-first process doesn’t only benefit customers. The bank’s benefits are three-fold as it:

• Educates the customer on its products and services
• Significantly boosts adoption rates
• Reduces the workload on more expensive channels

Your 7-Step Guide to Effective Digital Account Opening

Sometimes, even the most seemingly innovative acquisition tools can fall short of customer expectations. To avoid that, here’s a list of online account opening best practices, from start to finish:

1. Customer Knowledge and Support: Deliver clear and concise knowledge of the products and services you’re offering and provide guidance about the application process. Customers also should have the ability to ask questions directly from the application tool. Some account opening platforms even offer the capability to chat or video call with a banker to answer questions. Offering co-browsing—which allows a customer and bank employee to view the same screen—is another way to provide hands-on assistance during the process. Further, your solution should support an omnichannel experience that enables customers to start a digital application and seamlessly complete it at a branch if needed—all without missing a beat.

2. Data Capture: Require customers to enter their personal information only once. Your core-integrated account opening solution should then capture that data for automated input on future applications. For existing customers, auto-filling information using customer information files (CIFs) further streamlines the process. In fact, a recent PYMNTS report found that 42% of U.S. consumers say they are more likely to open accounts with financial institutions that make it easy to automatically share their banking details during the opening process. Saving applications in the process and allowing customers to resume later provides additional convenience.

3. Identity Verification: Automatically deploy a watchlist check and identity verification using the customer-provided information. And ensure out-of-wallet questions are updated, secure and effective. CSI’s 2024 Banking Priorities survey revealed that 52% of bankers are prioritizing customer identity verification and recognizing its dual role in streamlining digital account opening while strengthening security and risk management. There’s always a tradeoff between friction and security, but these methods make that trade more palatable. Both ID uploads and biometric authentication also accelerate onboarding and reassure customers. Some solutions even provide a live three-point selfie as a component of verification, prompting users to use their device camera to take photos of themselves to confirm their identity and avoid the potential of a deep fake.

4. Approval/Follow Up: Provide timely approval of account application, generally within one to two business days. And always follow up in cases of rejection or customer abandonment. Additionally, if an account was denied, automatic adverse actions provide a quick response about the reasons for denial and ensure compliance timelines are met.

5. Disclosures and Regulatory Compliance: Ensure regulatory compliance by providing clear disclosures in various formats, including HTML or PDFs.

6. Account Funding: Enable choice for your customers by providing multiple options to fund the account—including ACH transfers, debit cards and mobile check deposits—while still maintaining security. The same PYMNTS report found that 42% of consumers want institutions to offer automatic data transfer upon account opening. By partnering with a third party like PLAID, your institution can enable verification and instant funding of new accounts.

7. Account Fulfillment: Offer instant account access and, ideally, electronic follow-up rather than paper-based communications.

So, will competition from the digital retail giants force financial institutions to shift their business models? Perhaps, but maybe that’s not such a negative thing. Allowing customers to choose how, when and where they bank surely will only strengthen and nurture those lasting relationships.

Learn More About Digital Account Opening… Digitally

Banks win and lose customers through digital channels. By offering a superior digital experience that transitions directly to your digital banking platform, your bank can transform prospects into engaged customers.

Don’t allow the account opening experience to become stale. It’s not a point in time exercise—optimizing the account opening experience requires regular monitoring to implement continuous improvements.

Check out our 2024 Banking Priorities Executive Report for additional insight into bankers’ perspectives and challenges.

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