ID Analytics, LLC, a leader in consumer risk management, sponsored a study with Javelin to explore the fundamental shift to digital account opening, and the challenges facing financial institutions as they seek to fulfil consumer expectations.
The whitepaper, “Making Digital Account Opening Simpler, Safer and Seamless,” found that digital account opening is a critical tool for financial institutions seeking to attract profitable customers, deepen relationships with existing customers, and secure a position as their customers’ primary financial institution.
Javelin’s whitepaper surveyed more than 3,100 consumers, whose experience with account openings spanned financial products, including checking, savings, credit cards, auto loans, CD, mortgages, retirement, brokerage and educational accounts.
Building a Better Customer Experience
The study shows a tremendous spike in new account openings initiated on mobile devices, which jumped 60 percent from 2013 to 2014. Additionally, of U.S. consumers seeking to open new accounts this year, 70 percent of checking account applicants and 80 percent of credit card applicants reported they prefer to submit their applications online or with a mobile device.
The Javelin study identified three key customer segments, Moneyhawks®, Emergents and Traditionalists, and found that the most profitable customers prefer to do business with financial institutions online, but expect a quick, safe and seamless experience.
“Delivering solutions through mobile and digital channels is necessary in today’s banking world,” said Scott Carter, CEO, ID Analytics. “By simplifying the application and enrollment process, while verifying the consumer’s identity to manage against fraud risk, banks can increase conversion rates and deliver a seamless customer experience.”
Protecting Customers and ROI: Combating Fraud
While offering a smooth digital account opening experience is critical, fraud risk is an important concern for businesses. The total cost of fraud with new bank account openings reached $2 billion in 2014. Additionally, data breach notifications in the U.S. more than tripled in 2014, affecting nearly 62 million consumers, up from 24 million the previous year. According to the study, Javelin notes it anticipates there will be a spike in new account fraud.