Is customer verification the Achilles heel to online account opening?

Just how good is your bank when it comes to digital account opening?

Is it not just one example of an area where many banks are patently not yet fully embracing the opportunities offered by digital?

RBI joined forces with Jumio, the online and mobile credentials management to benchmark high street banks in their approach to digital account opening.

Interviews with 8 of the largest UK retail banks, covering more than 80% market share later the result is a white paper ‘Is customer verification the Achilles heel in online account opening’.

The research covers areas such as: Is digital account opening working at the moment? What is holding it back? Is it down to the consumer or to the bank? What other outside influences are there in the process? And, finally; what can today’s digital bankers do to lower their abandonment rates?

The common theme to all the banks interviewed is that despite the shared desire of banks and customers to move to online banking and money management, old-fashioned customer verification procedures mean that almost half (48.75%) of those who attempt to open a bank account online do not complete the process.

The banks interviewed cited a high percentage of non-matches to credit reference agency verification databases and instances where customers are required to visit a branch to have their ID document verified, turning what could be an easy intuitive digital experience into a chore.

There is quite a range in the results between the strongest performing banks and those at the other end of the scale.

Some banks are leaping ahead of their peers when it comes to embracing digital. However, the fact that in this day and age, potential customers may have to leave the comfort of their homes merely to show their ID in a bank branch is unthinkable. Yet, this remains the case in the ‘age of convenience’

Banks are only now starting to use their online account opening processes as a differentiator. Very few traditional banks are seeking to differentiate themselves via their digital offering.

In the same way that traditional retailers had to tear up the rulebook and re-engineer their business processes from the ground up, banks need to adopt this mentality, rather than transfer “behind the counter” thinking to their digital offering.

With the increasing pressure on banks to make a profit and keep their customers, making the account opening process as simple and as engaging as possible is crucial.

Looking at the vast numbers of consumers abandoning the process, there is ample opportunity for a bank to improve its online originations process and march ahead of their competitors. This would not only make the bank a part of the digital revolution, but add a competitive edge due to its ease. The choice between opening a bank account online in fifteen minutes or opening one within a couple of days by going into a branch is hardly a choice at all.

I commend the report to all who are interested in optimising digital banking; the full report can be downloaded at: https://pages.jumio.com/Jumio-A-Retail-Banker-industry-report.html