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Derek Garriock

Banking Moving Forward

Derek Garriock - Experian

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Branch vs Digital - The account opening battleground

09 March 2015  |  5054 views  |  4

Recent research on account opening from McKinsey looked at the sales conversion rates for branch versus digital and found what looks like a huge gulf in success. The research suggested that in-branch sales converted at a rate of 85% whilst digital channels averaged a 15% conversion rate. At first glance these figures suggest that branch is king whilst digital channels have a lot of catching up to do, but the real answer is not quite as simple as that.


In a branch, clearly any bank or financial services organisation has the advantage of people coming in through the door allowing for direct interaction and engagement on a one-to-one level with individuals. In turn, because people in the branch can get personal attention, feeling more valued and understood than they might otherwise online, appointments often convert to sales.  In fact, the 15% listed as a failed sale is often down to applications declined by the bank for identity and fraud reasons. 

It is important to note that this 85% success rate is based on customers entering the branch – usually as a result of an out-bound sales call. 

The problem arises when you consider that banks rarely contact customers at critical points in their lives when they might have a genuine need for a meeting with a bank adviser. These events could stretch from anything to retirement, bereavement, stolen identity or even something as simple as a lost wallet. Instead of using insight or data to identify these critical moments, branches rely on contact frequency and customer availability to answer calls as key drivers for sales.

To improve branch sales and ensure a high conversaion rate for the initial outbound calls, using data to better identify when customers need help, support and guidance during these ‘critical life-changing points’ could actually see branch sales increasing because people are being contacted in a more timely and relevant manner.

Branches typically still account for at least 60% of all new product sales (for banks with networks) and whilst the mix will change, it is likely to remain the prominent sales channel for some years to come, providing greater emphasis is put on better understanding customer needs.


Online,, banks face different customer challenges altogether. It is essential to provide online customers with a simple and engaging digital journey that helps them get to the end of the application before they get bored or distracted and log-off.  The consequences of not doing this are unopened bank accounts and more effort and resources being directed to recover the sales opportunity. This usually requires outbound calling, posting of documents or even asking a customer to visit a branch to complete the transaction. For most customers who opt to apply for something online, quite often because they might not have time to visit a branch, this additional effort will be too much and they are likely to not progress with the application. It might also lead to the customer feeling like the bank does not value or understand their personal needs with wanting to complete an application online.  

The big issue with the digital account opening process is that for many organisations, the benefits of new thinking and analysis will invariably be constrained by legacy systems. The potential problems are numerous with issues arising from any part of the account opening process.

Online journeys typically lose 35% of users because they cannot identify the customer, a further 35% give up at some point in the journey because it’s just too difficult, with approximately 15% failing the process and 15% making it through to open an account.

The question for banks in 2015 is how much they are willing to invest in streamlining the sales process both in branch and online rather than which to focus on the most. This last year saw a number of customer focussed challengers emerge, unbound by dated legacy systems and eager to get their share of the market. While they have yet to make a serious dent, the threat of challengers will only increase and established organisations must revive their account opening processes to keep a steady pipeline of new business.  Key to this will always be demonstrating that a customer is valued and understood. 


TagsMobile & onlineRetail banking

Comments: (4)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 09 March, 2015, 10:38

Kudos for a balanced post. 

"It is important to note that this 85% success rate ... an out-bound sales call." ---> Whenever I needed to open an account or remit some money or withdraw cash beyond ATM limits or whatever, I've just walked into a branch (assuming I would / could not carry out the said action via remote channels). Maybe it's only me but my branch visits were never driven by any outbound sales call by the bank. 

"The big issue with the digital account opening process ... constrained by legacy systems." ---> Banks in India have no legacy systems and yet insist on F2F before they can complete account opening. Regulation, not legacy, is the culprit.

"The question for banks ... streamlining the sales process both in branch and online rather than which to focus on the most." ---> Totally agree. After all, branches and digital channels are both owned by banks - it's not as though branches are outcasts! A couple of years ago, a midsized Indian bank carried out Conversion Rate Optimization to boost conversion on its online account opening portal and invested in training for sales staff to do the same at its branches. Thanks in part to these efforts and in part to the acquisition of another midsized bank, this bank has now become a Top 3 private sector bank in India!

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A Finextra member
A Finextra member 10 March, 2015, 15:55

I've made the argument that banks should provide their customers - or at least their better customers - with mobile phones and plans to remain omni-present in their lives.  When you know where people are, what they are consuming, what they are searching for (like Apple, Google, Amazon) you have a better chance of being in the right place at the right time. 

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Aditya Gupta
Aditya Gupta - IT Services - Delhi NCR 11 March, 2015, 06:37

Does the sales/branch team get incentives for accounts opened online? If not then Banks should not be surprised at under performance of the online channel.

But I would still recommend IT investment towards online origination to Banks. Let the online application be shared between consumer, direct selling agents, branch and back office bank staff. A few additional fields may be provided based on context using screen level validations (eg: agents may enter a code, employees may input their employee ID etc)

This will be a step to create a unified business process for account opening irrespective of channel (branch/agent/Backoffice/consumer) with downstream opportunities for optimization. 

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Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 11 March, 2015, 12:34

And the same customers who were hard up enough to accept a free mobile phone plus plan from their bank as a price for handing over their entire lives to their bank would then have enough money to buy whatever their banks offered them at the right place at the right time? Interesting idea.

Despite going online almost two decades ago, only a handful of retailers have managed to navigate past their internal silos and political dynamics to restructure their pay structures in such a way that their store staff get comped for online sales, that too only for store pickup orders. Wonder when this practice will take root in the banking industry where the silos are notorious for being very strong! 

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Leading strategy and solution design for Banking, primarily focused on developing capability to enhance customer experience across our core divisions, supporting the major global banks, wealth, life &...

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