Banks have the potential for a bright future with millennials, and the opportunity lies in learning to speak their language and to win their business.
At Bank of America alone, for example, 16 million customers aged 25 to 41 hold nearly $200 billion in savings — all from a generation frequently dinged for its heavy student loan debts and lack of savings. Millennials’ growing wealth makes it easy to see why the goliath bank is increasingly investing in its digital capabilities — 40% of Bank of America’s sales are from the millennial generation, and mobile banking use has climbed 10%.
Bank of America’s success among millennials should be a lesson to all financial institutions in meeting customers where they are. For millennials, this means providing digital-first options when they are ready to decide who to trust with their growing assets. If banks choose to ignore these demands, they also are turning away customers with collective billions in assets to their name.
Successful digital-first relationships start with a seamless digital onboarding process. And if banks think their current digital onboarding is enough to capture the business of this historically impulsive generation, they need to reconsider. Recent Lightico research showed 40% of millennial consumers dropped out of the onboarding process at major banks — Bank of America included — because of inefficiencies.
A seamless onboarding process is a strong indicator to millennials, and the even more digitally savvy Gen Z that follows them, that your organization can provide the branchless banking approach that fits their lifestyles. Millennials are accustomed to instant, intuitive, mobile end-to-end digital experiences with every service in their lives, from hailing a ride to insuring their cars, and they expect the same from financial institutions. A branchless approach, where they can accomplish all financial transactions and banking tasks from their devices, is a surefire strategy for success.
A 40% abandonment rate is far too wide a gap for banks to accept when seeking new business. To improve their onboarding success rate, and attract lifetime millennial customers in the process, banks should focus on the following key strategies.
- Enable effortless, end-to-end mobile onboarding. Customers should be able to open a new account on any mobile device, without the hassle of downloading a new app. This means enabling an onboarding process that provides a secure portal through a method like text message and eliminates the need to print, sign and upload documents. Forcing users to download an app and “figure it out” makes a bad first impression, especially considering how sparingly consumers choose to download new apps.
- Simplify the identification process. All new customer onboarding requires some level of identity verification and authentication, especially in the face of Anti-Money Laundering and Know Your Customer regulations. However, banks should adopt technology that makes this process as painless as possible. Aim to eliminate in-person verification requirements and cumbersome “scan and email” processes by integrating solutions that allow new customers to upload a photo of their IDs and ‘selfie’ style face matching for instant, secure verification. Many banks already incorporate optical character recognition (OCR) solutions to allow customers to deposit checks, and the same technology can be applied for all document and ID verification in the onboarding process.
- Make “paperwork” smarter with eForms. Customers want to use their most trusted device during the digital onboarding, so all required forms should be smart and responsive. For example, a customer on an iPhone might not be able to easily download and complete a PDF. Instead, forms should auto-fill information based on a customer’s previous inputs, and adapt in real-time to prompt the user for only the necessary information. Has the customer indicated they won’t need paper checks as part of their new account? Then they shouldn’t be prompted to fill out an order form. Finally, all of these forms should include secure, legally-binding digital signature and policy agreement methods to sign the documents and give consent to necessary terms and conditions. By making onboarding documents responsive and customized, delays in the process are avoided and completion rates rise.
- Provide real-time customer service collaboration. Making the onboarding process completely digital shouldn’t mean eliminating the human element of customer service. Banks must ensure all customer service representatives have detailed access to the customer’s onboarding journey from the very start of the interaction to provide a hyper-personalized experience. When a rep answers the phone, they should know exactly what phase of onboarding the customer is at, and be ready with a speedy solution. Anything less could cause the customer to abandon the process — even if they are in the final stages.
Banks can’t afford to miss out on the growing wealth of millennials — or ignore the digital demands of Gen Z that follows them. While improving digital onboarding requires investment in new technology, in many cases it is available from a single solution provider.
By adopting modern onboarding processes, banks can reduce the amount of drop offs, and turn the process into an experience that’s closer to the Netflix and Amazon-style interactions that today’s customers have come to expect.
Tagged under Technology, Financial Trends, Retail Banking, Tech Management, Mobile, Online, Branch Technology/ATMs, Cards, Customers, Profitability, People, Performance, Feature3, Fintech, Feature, Financial Research,
- Securing Lifelong Customers in a Disruptive Banking Market: Lessons Learned from Other Industries
- US “cashless society” Some Way Off, Survey Finds
- Wells Fargo Chief Unveils Major Restructure
- Fake and Bake: How Synthetic Identities are Created and Cultivated for a Life of Crime
- Real Estate Confidence Climbs for Third Consecutive Month